An executive from a Quebec engineering firm has testified many of the province's top engineering companies, including the troubled giant SNC-Lavalin, colluded to pay political kickbacks and to win fixed construction contracts.
Michel Lalonde, the president of Genius Conseil, told Quebec's construction inquiry Thursday that a list of top companies were complicit in the scheme to secure road and sewer design and construction surveillance contracts by sending bribes and kickbacks to the political party headed by the city's mayor.
Many of Quebec's major engineering firms have long been named in stories putting them at the forefront of Quebec's growing political financing and construction scandal, but Mr. Lalonde is the first sworn engineering insider to name names at the inquiry. He said his own firm, along with CIMA, Dessau, Tecsult and Roche, along with two publicly traded companies, SNC-Lavalin and Genivar, were all regulars who contributed cash to secure their market share. "I played a role as spokesman," Mr. Lalonde said, adding that he would co-ordinate between executives to decide who would bid on which contract. "We had to talk if we wanted to be sure we could split up the contracts, and assure that we understood the political donation obligations we had."
The companies were expected to donate $100,000 or $200,000 to Union Montréal, the political party of long-time mayor Gérald Tremblay, before the 2005 election, he said. For the next five years, they were expected to give three per cent from every contract, he added.
Inquiry co-chair Renaud Lachance suggested that when Mr. Lalonde said "spokesman" what he really meant was "collusion co-ordinator."
While the inquiry ended the week's testimony with this bombshell, an earlier one continued to fizzle under closer scrutiny. Martin Dumont, the former Union Montréal organizer whose testimony finished off Mr. Tremblay's career, admitted he forgot to mention his most incendiary allegation when first questioned by police.
Mr. Dumont, who said Mr. Tremblay was at a meeting where the use of illicit party funds was discussed, admitted Thursday that the meeting escaped his memory in his first police interview Sept. 12. Mr. Dumont's credibility has been under close examination since he returned to the inquiry this week to sort out several errors and contradictions in his testimony last fall.
Mr. Dumont did tell investigators on Oct. 17 that Mr. Tremblay listened, and then fled the room, as a party executive described how he was keeping a second set of books to evade election spending rules in a 2004 by-election.
Mr. Dumont said his memory was refreshed by his own research during the intervening month. The memory lapse was met with skepticism by the head of the corruption commission, France Charbonneau. "Am I to understand you didn't say this the first time because you thought this incident was normal?" Ms. Charbonneau said. "The fact the mayor was there… is normal, to you?"
"Yes, it was normal," Mr. Dumont answered. "What took me aback was not the presence of the mayor, it was the existence of a second set of books."
The lawyer for Union Montréal, Michel Dorval, went a step further, accusing Mr. Dumont of fluffing up his testimony to "set off a bomb" at the inquiry. Mr. Dumont denied the accusation.
The corruption inquiry has heard staggering accounts, corroborated now by several witnesses, of vast amounts of taxpayer cash circulating in bribes and kickbacks from construction companies and engineering firms to Union Montréal and party and city officials.
Mr. Tremblay was criticized for years for allowing the system to grow under his watch, but calls for his resignation fell on deaf years until last fall when Mr. Dumont described his presence at a meeting where under-the-table cash financing was discussed. The testimony directly implicating Mr. Tremblay has thus far not been corroborated, and Mr. Dumont was called back to the inquiry to explain a number of corrections and inconsistencies in his original testimony last year.
While some of Mr. Dumont's specific allegations are now in doubt, his broader point about the system of backdoor financing has been steadily bolstered by other witnesses.
The commission released testimony given under publication ban earlier this week which illustrated what construction companies and engineering firms were buying with the cash.
Sûreté du Québec investigator Isabelle Toupin described how city and Union Montréal officials pushed a $300-million real estate development toward Construction F. Catania and gave the firm a $14-million loan at 0.5 per cent interest, without authorization. The inquiry has heard the company was part of a ring of bid-fixing firms that bribed officials, made illegal political donations and kicked money to the mob.
The official agent for Union Montréal, Marc Deschamps, was the accountant for construction company executive Paolo Catania as the deal was being hammered out, she said. Martial Fillion, the head of Montreal's housing and real estate development branch, reduced the interest rate on a $14-million loan from 2 per cent to 0.5 per cent without informing anyone, she said.
Mr. Catania and several officials from the party and the city are facing criminal charges related to the deal.