A private engineering consultant dropped a bombshell on Quebec's corruption inquiry this afternoon, testifying Montreal public works contracts were routinely inflated by 25 to 30 per cent, his firm then turning over a portion to municipal political parties.
The president and CEO of the Montreal-based structural engineering firm Génius Conseil, Michel Lalonde, described how contractors with whom he was on friendly terms were "accommodated" through inflated project estimates or by approving cost overruns.
However, he insisted the cash his firm collected through this process was never pocketed, but always turned over to municipal political parties — either by getting associates who were residents of Montreal to write cheques for fundraising tickets, or simply by handing over cash to the parties.
Political financing 'dates back to Duplessis,' Lalonde says
Lalonde said far from being a new phenomenon, "the financing of political parties went on in the days of Duplessis," and his firm, formerly known as the Séguin Group, made political contributions to the parties of every mayor elected since it began doing business with the City of Montreal — dating back to Jean Drapeau's tenure in the '60s, Jean Doré two decades later and, in the '90s, Pierre Bourque.
In 2001, Lalonde's firm backed Bourque's losing party, Vision Montréal, and he testified it took a good year or two before the engineering group was able to establish a working relationship with Gérald Tremblay's winning Union Montréal party.
Lalonde said eventually, he got a call from Union Montréal party's fundraiser, Bernard Trépanier, to make a $2,000 contribution to an event for former executive committee chairman Frank Zampino.
He said he knew Trépanier slightly from his days as a federal Conservative Party fundraiser in the '90s, but their working relationship soon became more intense in the fall of 2004, with the approach of the 2005 municipal election campaign.
"I met Mr. Trépanier, and he said, 'Listen. Everything seems to be going well, we have to position ourselves for the next election ... We have to start talking about financing," Lalonde testified. "He said, 'Listen, Michel ... you're one of the firms that's well-positioned to get contracts. Then he asked me …for $100,000."
Lalonde said bigger firms than his were asked to contribute $200,000.
Trépanier comes up with '3%' solution
Lalonde said Trépanier was looking for a long-term fix for raising enough money for his party's political needs, and Lalonde testified Trépanier told him from that point on, he'd be expected to turn over three per cent of the value of all contracts his firm won to Union Montréal.
He said he paid Trépanier the $100,000 in cash over a period of months, in five or six instalments, meeting him "discreetly" in his office at the party's political headquarters on Saint-Jacques Street.
"He'd close the door, and often, as you've heard, the blinds would be drawn," Lalonde said. "I'd give him the money. That's it."
Earlier, the inquiry heard from former Union Montréal organizer Martin Dumont that Trépanier — known as "Mister Three Per Cent" — once had his office vault so stuffed with cash that he wasn't able to shut it without help.
Asked how it was he never questioned being asked for so much cash to finance the party — amounts far in excess of the $1,000 annual individual contribution that was legal at the time — Lalonde explained it was just the way the system worked.
"If they want to invest more than what they're allowed in order to win an election, you understand, they want to win, they'll take whatever means necessary to win," Lalonde said. "The only way to do it is with cash."