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Agents of the Royal Gendarmerie of Canada carry boxes of documents from the home of Jacques Corriveau, Wednesday July 4, 2007, in Saint-Bruno-de-Montarvile, Que

Francois Roy/CP

A former Liberal bagman has testified that party officials devised a fake-invoice scheme to pay him $40,000 shortly after he pleaded guilty to four counts of influence peddling in 1998.

Pierre Corbeil confirmed receiving the money during his testimony at the trial of Jacques Corriveau, a former Liberal organizer, on charges of fraud, forgery and laundering proceeds of crime in connection with his role in the federal sponsorship program between 1997 and 2003.

Speaking publicly on this matter for the first time, the 76-year-old Mr. Corbeil testified that the $40,000 payment from a printing firm was issued after a discussion with Benoît Corbeil, the former director-general of the Liberal Party of Canada's Quebec wing.

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Related: Federal Liberals paid $165,000 to silence bagman, trial told

Related: Jacques Corriveau, ghost from Liberals' sponsorship scandal, heads to trial

Read more: Meet the first Liberal charged with fraud in the sponsorship scandal

The two Corbeils have no direct family relationship, but they worked together in Liberal circles in the 1990s.

"Benoît Corbeil called me and told me to invoice this amount to the company and that I would be paid," Pierre Corbeil said in response to questions from the Crown prosecutor, Jacques Dagenais. "I received a cheque and I deposited it."

Pierre Corbeil pleaded guilty to the four charges against him in April, 1998, acknowledging that when he was a fundraiser for the Liberal Party he demanded money from several Quebec companies to ensure that they received job grants. Mr. Corbeil had obtained a list of companies to target for political contributions from the office of a Liberal minister, but his guilty plea meant no one ever testified in court about the illegal fundraising scheme.

The trial has heard that the $40,000 payment to Pierre Corbeil came from federal funds paid out under the sponsorship program, which was a national-unity initiative that gave contracts to advertising companies and other businesses to place Government of Canada logos at sporting and cultural events in Quebec after the 1995 referendum on sovereignty.

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The first witness at the Corriveau trial, businessman Luc Lemay, received $40-million between 1997 and 2003 through the sponsorship program. The trial heard that Mr. Lemay gave commissions of 17.5-per cent to Mr. Corriveau – totalling $7-million – on sponsorships he received for trade shows and publications.

Mr. Lemay testified last month that he provided $125,000 in cash and $40,000 through a fake printing job to Pierre Corbeil at the behest of Mr. Corriveau in 1997 and 1998.

The goal of the payments was to ensure that Mr. Corbeil did not implicate other Liberal officials in an illegal fundraising scheme, Mr. Lemay said, explaining the request for funds came after the RCMP charged Mr. Corbeil with influence peddling in 1997.

"Mr. Corriveau told me: 'It's essential for this guy to plead guilty. If he does not plead guilty, it will greatly affect the Liberal Party,'" Mr. Lemay testified at the start of the trial. "He asked me for $100,000 for him."

Mr. Lemay – who referred in his testimony to hand-written notes from Mr. Corriveau that were entered as evidence – said the request for cash eventually grew to $125,000.

Mr. Lemay said Mr. Corbeil later requested an additional $40,000, which was provided through the fake-invoice scheme. Using one of his suppliers, Mr. Lemay paid the amount to Mr. Corbeil's company in east-end Montreal under the guise of a large printing job.

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Over all, Mr. Lemay said more than $700,000 of his commissions to Mr. Corriveau were paid to the Liberal organizer directly or in the form of benefits for the Liberal Party of Canada and various Liberal officials. For example, Mr. Lemay testified that he put Liberal organizers on his payroll, bought office supplies for Liberal headquarters in Montreal, and paid invoices for about $350,000 in election expenses.

During his testimony, Mr. Corbeil did not confirm that he received any cash amounts after he was charged with influence peddling, refusing to answer a question from the Crown about any additional payments. Mr. Corbeil added that he completed 100 hours of community service after his guilty plea, and has since obtained a pardon.

Mr. Corriveau's trial in front of a jury was on a break this week, but is scheduled to resume on Monday. The Globe and Mail has obtained audio recordings of Mr. Lemay and Mr. Corbeil's testimony, and documents tabled as evidence.

It is not known whether Mr. Corriveau, 83, will testify in his own defence at the trial.

With a report from Les Perreaux

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