Montreal politician demanded $100K, political organizer says
Gilles Cloutier says it was easy to find individuals to front illegal corporate donations
A veteran political organizer who has admitted to being the orchestrator of dozens of so-called turnkey elections in Quebec says that a high-ranking Montreal politician demanded thousands of dollars in cash from his firm to help finance the 2001 election campaign.
Gilles Cloutier's bombshell testimony before Quebec's corruption commission touched on everything from cooked books to straw man fundraising, but it primarily focused on elections he was brought in to engineer outside of the city of Montreal.
However, just before wrapping his first day of testimony, Cloutier told the commission that Frank Zampino — the mayor of St-Leonard and the eventual head of the City of Montreal's executive committee — told him that his firm needed to come up with $100,000 to help with the election if they wanted a piece of the contracts in Montreal.
And, Cloutier said, it all started when then-candidate and eventual mayor of Montreal, Gerald Tremblay, approached him to ask for help.
At that time, Cloutier was working as business development director for the engineering firm Roche. However, his role was more targeted at winning elections to, in turn, win contracts than it was about engineering.
In 2001, when Cloutier was approached by Tremblay, Montreal was dominated by one engineering firm, he said. Roche was interested in breaking into the market.
Cloutier said Tremblay came to him in May 2001 and asked for assistance for the upcoming election, though it wasn't clear if he was asking for organizational or financial help, he told the commission.
However, Tremblay said his number 2, Frank Zampino, would be in touch.
Cash for contracts
Cloutier talked with Zampino in his office a short time later and that's where the request for $100,000 was made, he told the commission. Zampino said five other big engineering firms were being asked to make the same contribution.
Zampino repeated that demand in front of another colleague a week later, Cloutier said.
Cloutier's testimony mirrors that of other engineering firm executives who told the commission they were asked to make large cash contributions to the election campaign in exchange for entrance into a contract-splitting arrangement.
Zampino, who testified before the commission last week,denied any knowledge of a collusion scheme at city hall.
However, Cloutier was emphatic that Zampino was the one who made the demand. He said his firm couldn't come up with the cash in a short amount of time, but Cloutier agreed to pay $25,000 from his own account.
He said he handed over the money in a meeting room near Zampino's office to another man, whose name he did not know but whose picture he had identified.
'He should have known'
Cloutier was pressed about Tremblay's role and if he was aware of the organizer's reputation for exchanging election victory for engineering contracts.
He said he knew Tremblay already and the mayoral candidate was aware that he worked for the engineering firm and was a political organizer.
"He should have known," Cloutier said about his own involvement in turnkey elections. "I never talked about doing it, but for sure there were a lot of people who knew. He should have known."
Tremblay, whose testimony before the commission wrapped up yesterday, insisted that he was kept in the dark on the illegal goings on because he would have put an end to it. He told the commission Monday that he was just as shocked as everyone about some of the revelations coming out in testimony.
Winning an election 101
Cloutier said that his precise system of ensuring election victory was the price paid by his employer to ensure the firms clinched municipal contracts in smaller municipalities outside of Montreal.
Cloutier said that the candidates didn't always know the details of the so-called turnkey elections he managed. He said the mayoral candidates always knew that he was an employee of a firm that expected results in return.
"I absolutely had to deliver a victory," he told the commission. "We lost a few, but nearly all of them, we won."
Several witnesses before the commission have touched on the topic of turnkey elections, or one in which a company offers up services in exchange for political favours following the election.
Cloutier is the first to detail step-by-step how those victories were ensured.
To win the election, Cloutier said he had to have control over four elements – the quality of candidates, financing, organization and communication. He graded each category out of a score of 25 and said if he could get each up to a 20, he could ensure victory.
He described an extensive system of research, during which he'd talk to as many people in the area as possible, and obtain documents like elector lists as soon as possible to get down to the business of winning over votes.
He also described two sets of books that were maintained during the campaign of turnkey elections.
The first set of official financial documents would be submitted to the chief electoral officer and would conform to the laws surrounding party financing.
The second of off-the-record books would supplement election expenses with cash purchases.
Cloutier said the official agent of the party was not always in the loop about the balancing of the two sets of books and he managed the cash account.
That two-book system worked by claiming some of the unavoidable expenses, like utility costs and some campaign spending, on the official books, while avoiding the reporting of other costs by paying for them with cash, Cloutier said.
Generating money wasn't a problem, he said, because there were always a number of people ready to allow their name to be used so that companies could donate to the parties. Under Quebec's election laws, only individuals who reside in the municipality can make such donations.
Billboards and the Quebec referendum
Cloutier described several ways in which illegal fundraising was used to finance political campaigns, including the ultimately successful "No" side in the 1995 referendum.
Quebec voters were asked whether their province should secede from Canada and become an independent state.
Cloutier worked as co-ordinator for the Laurentian and Lanaudière regions of Quebec during the campaign. His job was to put up large billboards in each riding that read "No, thank you."
He described spending thousands of dollars on large-scale, roadside billboards that towered over those of the "Yes" side to "show that we were the best," he said.
He said thousands of dollars were spent on the signs, which were financed primarily through businesses.
The billboards were often vandalized, he said, adding security guards were hired to protect them.
None of those expenses were declared or submitted to the official agent, he said.
Cloutier told the commission that the vast majority of political financing in Quebec is dishonest.
He said only five to 10 per cent of funding for municipal campaigns comes from "real" donors. He said it's slightly better on the provincial level.
"I haven't done the calculations, but it's maybe a bit higher – 15 or 20 per cent," he told the commission, describing the number of honest and legal donations made to the political parties.
Cloutier is the latest industry insider to take the witness box at the province's corruption commission.
He has a long history in Quebec's political scene.
He started work as an organizer under Maurice Duplessis in the 1950s. In those days, Cloutier recalled, voters could be swayed with bribes such as cows or washers and dryers.
In the 1960s, he went to work for Transport Quebec, but continued his tasks as an organizer on Montreal's north shore.
He was later involved with the provincial Liberal Party, working on Robert Bourassa's 1983 campaign.
He worked in business development at engineering firms Dessau and Roche, both of which have come up in testimony related to kickbacks to the Union Montréal party allegedly paid in exchange for a share of municipal contracts.
Cloutier, who is in his 70s, is now retired.
He is the first employee from Roche who has been called to testify.
Loopholes in election financing law
Cloutier told the commission that the election-financing law that was supposed to reform the landscape in Quebec was circumvented quickly after it was instituted.
The law, introduced by the Parti Québécois government in 1977, limited the amount of donations allowable to political parties. It also prevented companies from making donations.
Cloutier said it stalled things for maybe a year before loopholes were found.
After that, he told the commission, companies started using a so-called "straw man" or an individual permitted by law to donate, to funnel cash to support political parties.
People would receive a $300 tax credit for as little as a $400 donation, he said.
"When I had $50,000 to launder, it wasn't that bad," he said. "I had a lot of contacts. I knew a lot of people."