Gatineau contractors colluded to rig bids, witness says
Corruption inquiry's 82nd witness says lowest-bid rules a recipe for collusion
After a 10-week break, the public hearings for Quebec’s corruption inquiry resumed Tuesday morning with more testimony about bid-rigging — this time involving companies outside Montreal.
Construction companies in Gatineau participated in an elaborate price-fixing scheme to maintain profit margins, according to the testimony of engineer Marc-André Gélinas, the 82nd witness to appear since the inquiry's hearings began last fall.
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Gélinas, the Outaouais executive director of the engineering firm AECOM, said collusion was the unintended consequence of Quebec’s Bill 106.
The law came into force in 2002, requiring municipalities to take the lowest bid submitted on infrastructure projects.
He called that law a "false economy," saying it forces everyone bidding on a contract to cut costs.
"You might save a little in terms of engineering costs," Gélinas testified, but as a result, there is less experienced engineering oversight on construction projects.
He said municipal officials often asked him why recent paving projects require work so soon after the completion of a job.
Gélinas said that's because engineering firms are not paid to do a good job — they're paid to do a cheap job.
Code disguised bid-rigging
Earlier, Gélinas testified how companies worked together to rig bids after Bill 106 was passed.
"We knew it was illegal," he said, describing how they avoided discussions of bid-rigging over the telephone. Instead, they came up with a verbal code to thwart anyone who might be listening in.
He testified that he created a spread sheet in which days of the month and times of day corresponded to bid amounts, and then gave it to other colluding firms.
Gélinas said the collusion scheme in his region wasn't the same as those described by previous witnesses in the Montreal area, which involved organized crime and kickbacks to political parties.
He said that in Gatineau only the engineering firms knew what was going on. However, after a U.S. firm bought his company and brought in a tough code of conduct, it was no longer "business as usual."
Then, in 2009, he saw a story in a Gatineau newspaper, describing how 14 people had been arrested in connection with a collusion scheme.
"There were criminal charges," he exclaimed in his testimony.
"You did this for years!" commission counsel Denis Gallant replied. "You made up the code! What did you think? It was like speeding on the highway?"
"Honestly, yes," Gélinas replied. "I failed to grasp the gravity of the game I was in."
Gélinas said that once he did, he stopped colluding and started co-operating with corruption investigators.
Accurso to fight order to testify
Several people, some facing criminal charges, have launched battles in court to try to avoid being called as witnesses before the commission.
Tony Accurso, the embattled former construction magnate, is one of those people and is scheduled to appear in Quebec Superior Court Friday to fight an order to appear issued by the commission earlier this year.
He has maintained that his testimony at the inquiry would make it impossible for him to have a fair trial in his impending fraud cases.
Unions to come under inquiry's lens
The commission's chief lawyer, Sonia Lebel, said studies in the U.S. have shown how organized crime uses unions to infiltrate the lucrative construction business.
She said that during this fall's session the inquiry will delve into how involved the Mob and criminal biker gangs are in Quebec's powerful union movement.
It will look into the ways organized crime allegedly accessed the assets of the Quebec Federation of Labour's Solidarity Fund.
The inquiry is also expected to dig deeper into lucrative construction contracts issued by Transport Quebec and examine how much of taxpayers’ money was involved.