Corruption suspects gave $2 million to federal parties: CP report

An analysis by The Canadian Press involving all 102 individuals charged after sweeps by Quebec's anti-corruption police squad shows that nearly half — 45 of them — made registered legal contributions to federal parties from 1993 to 2011.

MONTREAL – Dozens of suspects accused of corruption at Quebec’s municipal and provincial levels have also been involved in national politics, giving more than $2 million in donations to federal parties, an investigation by The Canadian Press has revealed.

An analysis by The Canadian Press involving all 102 individuals charged after sweeps by Quebec’s anti-corruption police squad shows that nearly half — 45 of them — made registered legal contributions to federal parties from 1993 to 2011.

The actual extent of their connections to federal politics, however, may never be known.

An ongoing public inquiry in Quebec has heard explosive allegations about illegal political financing, bid-rigging, collusion and Mafia ties in the province’s construction industry, but it does not have a mandate to explore whether such activities have occurred in the federal realm.

At the inquiry, industry players have described using political donations to gain influence at the provincial level and help unlock public funding for projects that had frequently been rigged at the municipal level.

Which begs the question: Has this occurred elsewhere in Canadian politics?

There have been only glancing and peripheral references to federal politics at the inquiry, which resumed this week after a summer break.

But Elections Canada’s records do offer information on many of the 102 individuals charged following investigations by the province’s anti-corruption squad — a list of people that includes industry executives, engineers, city officials, municipal politicians and lawyers.

The Canadian Press examined their donation history as well as the federal contributions of all 13 companies charged by the same Quebec corruption-fighting unit, which was created in February 2011.

Records show that more than three-quarters of those companies — or 10 firms — gave federal political donations between 1993 and 2006. Corporate donations in Canadian politics were restricted in 2003 and banned entirely in 2006.

The analysis also counted donations to federal parties made by construction and engineering companies where some of the 102 individuals held powerful positions, such as owner or senior executive. The Elections Canada online database only goes as far back as 1993.

Altogether, the contributions from the individuals and the companies, which were amassed over two decades in more than 900 donations, totalled nearly $2.2 million.

A decade ago, Liberal cabinet minister Sheila Copps argued in favour of an outright ban on corporate political donations, saying it was necessary to keep companies from influencing government policy decisions.

Copps, who was Jean Chretien’s heritage minister at the time, said corporate pressure hindered the government’s efforts to implement key policies of the Kyoto environmental accord.

She suggested in an interview that construction industry players also curry favour with politicians in pursuit of their corporate interests.

“Engineering firms attach to political parties because they want infrastructure contracts — it’s not rocket science,” said Copps, who noted that the allegations heard at the Quebec inquiry aren’t restricted to that province.

“If you went in and did a Charbonneau (commission) in any part of the country, you’d probably find people that have had vacations … and been greased by somebody for a contract.”

She said there’s nothing wrong with getting involved in politics, and promoting your cause. But she added that there should be sufficient, ongoing public oversight to ensure people aren’t taking illegal cuts of publicly funded contracts or receiving extravagant, under-the-table gifts.

When Copps was in cabinet, the Chretien Liberals placed limits on corporate donations in 2003. They were banned altogether by the Harper Tories in 2006, while individual donations were also capped at $1,100 annually.

The Canadian Press analysis revealed a precipitous plunge in donations in three stages: contributions from those now charged fell after the 2003 reform; fell again after the 2006 reform; and stayed low until they disappeared almost entirely after 2009, when the corruption scandals erupted in Quebec.

The Liberals, who held power from 1993 until 2006, received the most donations. Varying smaller amounts went to the old Progressive Conservatives, the Bloc Quebecois, the post-2003 Conservative party and its precursor parties, the Canadian Reform Conservative Alliance and the Reform party.

Connections between Quebec scandals and the federal domain have been officially off-limits at the public inquiry, but they have still come up since proceedings began last year, usually in brief instances.

This week, a witness testified about an alleged collusion scheme in the Quebec City area where eight big construction companies conspired to drive up prices while Ottawa went on a historic multibillion-dollar infrastructure spending blitz after 2007.

Another allegation came from the lips of the then-vice-president of Dessau Inc., one of the largest engineering-construction firms in Canada.

Rosaire Sauriol explained during testimony how he used fake-billing schemes to pump $2 million from the company into the coffers of provincial and municipal parties.

During his March appearance at the inquiry, Sauriol was asked whether he used the same strategy to channel money to federal parties and he replied: “Yes.”

Such illegal donations would not have appeared in the Elections Canada database pored through by The Canadian Press.

No further details about federal contributions emerged from Sauriol’s testimony.

Records from Elections Canada show he personally gave two donations to the Bloc for a total of $304. Between 1993 and 2006, his family’s company, Dessau, and its subsidiaries contributed a total of $246,368 to federal parties, primarily to the Liberals, and to a lesser extent the Progressive Conservatives and the Bloc.

There have been other examples of the probe sniffing along the periphery of Quebec provincial politics.

While questioning witnesses, Charbonneau commission lawyers have twice raised the name of Conservative Sen. Leo Housakos. He has not been accused of any wrongdoing and they did not explain why they were asking about him.

A commission lawyer suddenly started questioning the head of the BPR engineering company about Housakos’ previous work at the firm and his appointment to the Senate.

Sources have told The Canadian Press that the senator helped organize a lucrative 2009 Conservative fundraiser — featuring a speech by Prime Minister Stephen Harper — that was attended by numerous engineering-industry employees.

Housakos admitted to soliciting a donation from his former BPR boss at the time, but he said he did not have any formal role in the Montreal event. The federal ethics officer, meanwhile, cleared Housakos in 2009 of any conflict of interest related to his time at BPR.

Housakos has since expressed frustration at what he describes as a smear-by-association campaign and a “witch-hunt” atmosphere around the inquiry.

Housakos has also threatened to sue different media, including The Canadian Press, over their news reports about the inquiry testimony.

The list of construction-industry players at that fundraiser included Sauriol and former SNC-Lavalin boss Pierre Duhaime, who is now facing fraud charges.

Federal agencies, meanwhile, are watching the inquiry from the sidelines.

The Competition Bureau of Canada says it has met with Charbonneau Commission officials to explain its mandate, which includes investigations into bid-rigging.

The bureau has also been involved in raids and seizures by Quebec’s anti-corruption police unit, known by the acronym UPAC, which was created by the Charest Liberals.

“Going forward, the bureau will co-operate with the Charbonneau Commission as requested in the limits of the law,” spokesman Phil Norris said in an email.

A spokeswoman for Election Canada would not say whether it was looking into any allegations that have emerged at the inquiry, noting that it never confirms or denies whether complaints have been received and investigations are underway.

She did say the agency is following the inquiry’s deliberations.

The elections watchdog, meanwhile, announced last week that it laid seven charges against the official agent for defeated Liberal candidate Jean-Claude Gobe in the Laval, Que., riding of Alfred-Pellan in the 2006 election.

Among the charges, Elections Canada alleges that the official agent, Jacques Chouinard, failed to open a separate bank account in a Canadian financial institution solely for Gobe’s campaign.

Gobe is now running for mayor of Laval in the November municipal election, seeking to replace two recent predecessors who successively resigned in scandal.

The Charbonneau inquiry has heard how construction-industry players used political donations and other gifts to win favour with provincial politicians in hope of unlocking public contracts.

Gilles Cloutier, a retired engineering executive and political organizer, testified that the industry systematically bankrolled municipal election bids illegally; then, once its allies took office, companies cashed in on rigged infrastructure contracts.

He said he then used political donations to make connections at the provincial level, and would lobby his contacts at that level of government to fund municipal projects he’d lined up.

Cloutier described how he used events with celebrities, including Montreal Canadiens legend Jean Beliveau, to bring together his municipal allies and influential provincial contacts.

Some of Cloutier’s testimony has been disputed by people he implicated.

He said the vast majority of money collected by political parties in Quebec is illegal. He estimated that less than 10 per cent of funds collected at the municipal level, and 20 per cent at the provincial level, actually came from legal eligible donors.

In Quebec, Cloutier said it was easy to find people willing to pose as donors because not only were they reimbursed, they received a tax break.

“The director general of elections didn’t check and it was easy to find strawmen because of the tax credit,” he told the inquiry in April. “Everyone called me because it was essentially a $300 gift.”

Cloutier mentioned during his testimony that he worked on federal election campaigns. Commission lawyers did not probe him for details about his role in national politics.