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Premier Jean Charest responds in the Quebec leglislature on Nov. 16, 2010.

Premier Jean Charest's government is being hit by new allegations of corruption as it prepares to face a no-confidence vote Wednesday and a tighter-than-expected battle for next week's by-election in the Liberal stronghold of Kamouraska-Témiscouata.

David Grégoire, who ran and lost as the Liberal candidate in the riding of Masson in the 2008 provincial election, said he accepted illegal cash contributions, fuelling allegations of corrupt party financing practices.

Mr. Grégoire said that Luc Tremblay, director-general for the Town of Mascouche, just north of Montreal, gave him an envelope containing $3,000 in cash. Mr. Grégoire said that a few days later, a local construction entrepreneur, Luigi Salvatore, handed him a wad of cash to help finance his election campaign. Both donations were never officially reported and were in clear violation of the province's election law.

Mr. Tremblay, Mr. Salvatore, as well as the Quebec Liberal Party, denied the allegations.

"I accepted the money and I know that was a mistake," Mr. Grégoire said in a telephone interview. "I had no chance of getting elected. … But if I had, I would have probably been asked to return the favour."

Mr. Grégoire, 26, explained that he went public with the information in an interview with Radio-Canada after learning that the mayor of Mascouche, Richard Marcotte, stepped down after allegations of conflict of interest involving a local construction entrepreneur. Shortly afterward, the mayor of the neighbouring city of Laval, Gilles Vaillancourt, was accused of attempting to make similar illegal cash donations to two provincial candidates in separate by-elections in 1993 and 2002.

The damaging revelations by Mr. Grégoire sparked an immediate police investigation by Opération Marteau, the province's special anti-corruption squad, as well as by Marcel Blanchet, the province's Chief Electoral Officer. Mr. Grégoire spent five hours this week being interrogated by police.

"I took the political gamble that by admitting my fault, people would applaud my gesture and it would encourage others to come forward," Mr. Grégoire explained during the telephone interview. "I suspect other more important candidates faced similar situations, regardless of the political party," Mr. Grégoire said. He joined the chorus of those calling for a full public inquiry as did the Quebec Liberal Party's former president, Robert Benoît, who urged his party to conduct an internal investigation into alleged illicit financing practices.

Mr. Grégoire's troubling revelations come on the heals of new allegations of bid rigging on government contracts by 30 Montreal-area construction companies and nine engineering firms. The Montreal daily Le Devoir reported that the two groups were being investigated by Opération Marteau, who suspect Mafia ties with the construction entrepreneurs.

In the wake of repeated scandals, the Parti Québécois tabled a no-confidence motion to bring down the government. With its slim majority, the Liberals should easily withstand the threat. However, Mr. Charest wasn't taking any chances. The Liberals hold 65 of the 125 seats in the National Assembly and he postponed his departure for an official visit to France until after Wednesday's vote.

Nonetheless, the allegations of corruption, collusion, irregular party fundraising practices and influence peddling, which will be part of Wednesday's no-confidence debate have been roiling the voters of Kamouraska-Temiscouata. The Liberals have represented the riding - located just east of Quebec City - for the past 25 years, but according to the latest survey by the polling firm Crop, are neck and neck with the PQ.

There is a great deal more at stake here than just an election to replace the late Claude Béchard, who died of cancer last September. Defeat for PQ Leader Pauline Marois could be devastating for party morale, but a loss by the Liberals could represent an even more serious setback for Mr. Charest and his ability to remain as party leader.

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