Collusion driven by Union Montréal fundraiser, inquiry hears

A former vice-president at one of the biggest engineering firms in Montreal says he brought stacks of cash to the offices of the former mayor's party in exchange for a "piece of the pie" in the realm of lucrative public contracts.

Engineer François Perreault resigned from Genivar over political donations

Engineer François Perreault details bid-rigging, collusion in testimony to Charbonneau inquiry. 2:01

A former vice-president of one of Montreal's largest engineering firms says he brought stacks of cash to the offices of the former mayor’s party in exchange for a "piece of the pie" — to get his firm its share of lucrative public contracts.

François Perreault was a vice-president at Genivar, which won contracts for large-scale infrastructure projects such as the construction of Montreal’s festival district.  

Last week, he tendered his resignation, in part, he said, to distance the publicly traded company from the testimony he was about to give before Quebec's corruption inquiry.

In February, Genivar released a statement saying an internal investigation had found it engaged in "inappropriate conduct" in the financing of political parties.

It also said an unnamed employee was on leave until the internal review was completed.

Perreault told the commission that he had been on leave for the past month.

He told the commission about a system of collusion that he participated in to ensure that the company had a foothold in the Montreal market.

His story confirmed that of engineer Michel Lalonde, the self-described "spokesman" for the firms, who acted as the intermediary between them and the governing Union Montréal party.

Perreault said he agreed to pay $200,000 to support the party’s 2005 electoral campaign in exchange for an entrance ticket to a rigged bidding system on public projects.

He identified the organizer of that scheme as Union Montréal's chief fundraiser, Bernard Trépanier.

Perreault said he brought lump sums of cash, ranging from $20,000 to $50,000, to Trépanier at the Union Montréal offices, even after Trépanier left the party suddenly in 2006.

He said he’d arrive at the office, where the blinds were closed, and he'd hand Trépanier the money.

"He put in his safe. I remember he had a safe beside him," Perreault said.

He didn't get a receipt, Perreault confirmed when asked by the commission prosecutor.

Another witness, former Union Montréal organizer Martin Dumont, told the commission last fall that he recalled that safe being so stuffed with cash, it wouldn’t close properly.

Breakfast at $1,000 a plate

Perreault said soliciting engineering firms for political donations started in the early 2000s.

At first, he said, he was asked to attend political fundraisers such as cocktail parties. Later, he was asked to invite people to a $1,000-a-plate breakfast with the mayor.

It was fellow engineer Lalonde who initially approached him about the collusion scheme, he said.

At the time, there was a flood of public projects coming to the market, and city hall was freeing up funds for that type of work, he said.

Lalonde told him that, "There’s enough work for everyone, but there will be rules to follow," Perreault told the commission.

Those rules included making payments to Union Montréal, forming consortiums with other approved firms for big projects and working together to rig the bids that went to the selection committee.

Process easily rigged

It wasn’t a problem at the time to rig the process, he said, because the city had to accept the lowest bid in accordance with provincial law.

To ensure that everyone got their turn, Perreault said, Trépanier orchestrated a system whereby the firms would share the work and take turns winning the big projects.

The firms were told with whom they were partnering, he said. Lalonde provided direction on how much they should bid. Sometimes, he said, they simply had to put in a false high bid they had no intention of winning.

Perreault said Trépanier consulted with someone higher up than him when it came to deciding which firms would partner up to win a bid.

He identified the former head of Montreal's executive committee, Frank Zampino, who is now awaiting trial on fraud, conspiracy and breach of trust charges, as the person directing Trépanier.

Zampino resigned from the city in 2008, citing his desire to launch a career in the private sector. Zampino was arrested last spring, following a 2½ year investigation into allegations that he fixed the bidding process to favour Construction Frank Catania & Associates Inc. for the Faubourg Contrecoeur housing development project. 

Perreault said he only met Zampino once and, while the meeting was cordial, it was clear that Trépanier was the one who was in charge of the logistics of the collusion scheme.

Trépanier was also arrested by corruption investigators last spring and charged with fraud, conspiracy, breach of trust and fraud against the government.

Political donations

Perreault said when it came to making donations to Union Montréal, the firms involved were divided into two groups. The larger firms like SNC-Lavalin, Desseau, Roche and Genivar were expected to pay $200,000. The smaller and medium firms were responsible for a lesser payment.

Perreault said the collusion scheme ground to a halt in 2009, when increased heat from the province’s corruption investigators and increased media attention made it too risky to continue.

"A lot of people in the firms started to get nervous, and it didn’t make sense anymore. . . There was fear, yes."