Engineer swapped cash for provincial contracts

The president of a Montreal-area engineering firm says he paid a member of a provincial government contract selection committee in exchange for winning bids.

Michel Lalonde says his firm also illegally reimbursed employees for political donations

Génius president Michel Lalonde admits to the Charbonneau inquiry he rewarded a transport ministry contract selection committee member after his firm won contracts. 1:48

The president of a Montreal-area engineering firm says he paid a member of a provincial government selection committee in exchange for winning bids.

Michel Lalonde, the president of Génius Conseil — formerly known as Groupe Séguin — has been testifying before the province's corruption commission for several days.

Lalonde said his engineering firm gave gifts to Transport Québec contract selection committee member Claude Millaire, including a cell phone for which the firm paid the bill over the course of several years.

He said he also handed over $25,000 cash to Millaire at a restaurant in Laval.  He said Millaire was the only member of the selection committee that his firm paid.

According to Lalonde, Millaire alerted him in November 2007 that he was on a committee to evaluate the bids for a project on Highway 13 in Lachine.

Lalonde said Séguin had formed a consortium with another firm to submit a bid on the project.

Lalonde said he met Millaire for a meal the following month.  He said Millaire told him that he had just left the selection committee meeting, and his bid had won the $3 million contract.

He said Millaire told him, "I'd like it if you would take this into account."

Two months later, Lalonde says he gave Millaire $25,000 in cash.  According to the engineer, Millaire responded, "I'm happy you appreciate my effort."

Lalonde said the relationship dissolved in 2010, partly because of investigations that were underway.  He said he asked Millaire to take care of the cell phone bill himself.

'Legal' contributions

Lalonde said his company did contribute to three of the province's political parties legally to "grow his business."  Those donations weren't guarantees to obtain contracts, he said, but rather donations made to make the firm more visible.

The engineer said his associates and their spouses made donations to the Quebec Liberals, the Parti Québécois and the former Action démocratique du Québec for more than 10 years.

He said the company would reimburse those donations through bonuses or cash payments.

In every case, the donations were made through ticket purchase for political fundraising events.

Commission prosecutor Denis Gallant went through a list from the Director General of Elections Quebec, showing donations made since 1998.

All of those donations, made on the record, were within the limits of the legislation at the time.

Lalonde said if he was at his contribution limit for the year, he would look for other people to buy tickets on his behalf.

Lalonde, associates of his firm and sometimes municipal officials invited by the engineer would attend the events.

A representative from the Directeur General des Elections de Quebec addressed the commission during Lalonde's cross examination and said that while the donations were described as legal, in that they fell within the legal contribution limit, the moment they were reimbursed by the firm, they became illegal.

Province vs. municipalities

The engineer said dealing with provincial politicians differed from dealing in the municipal sphere.

While municipal politicians demanded donations before his firm would be eligible for contracts, at the provincial level, Lalonde said, the more contracts his company was awarded, the more requests for donations would pour in.

Lalonde said even though the individuals who made those donations were reimbursed by his firm, they would incidentally benefit by getting an income tax credit for political donations.

In total, Lalonde said, he, his wife and son contributed $50,000 to the PQ and the Liberals between 1992 and 2009.

Lalonde said the bulk of his donations would favour the party in power, though he often made smaller donations to the opposition as well.

Collusion allegations

Since he took the witness stand last week, Lalonde has detailed for the commission how engineering firms and municipal party insiders manipulated the tendering process to guarantee firms would win bids for lucrative infrastructure jobs.

The firms, according to Lalonde, would in turn kickback three per cent of the value of the contract to Union Montréal, the governing party at Montreal City Hall at the time.

The result was not only bid-rigging, but the inflation of the price of the work, he testified.

On Monday, Lalonde also testified that he made illegal political donations to elected officials or mayors in several Montreal boroughs.

He said those contributions were a requirement if his firm wanted to be considered for public contracts.

During cross examination Tuesday, commission chair France Charbonneau asked Lalonde directly if he knew what he was doing was illegal.

"I knew it was illegal," he told the commission.

"And you were smart enough not to display it, if I understand. You tried to keep it discreet?" Charbonneau asked.

"I did it in a way that was extremely discreet," Lalonde responded.

Several of the elected officials named by Lalonde have come forward to deny his testimony that they accepted cash — either saying that Lalonde approached them with the cash, or that they accepted the donation legally under municipal party fundraising rules.