Conservative Senator Leo Housakos solicited tens of thousands of dollars' worth of questionable construction industry donations for a Quebec provincial party immediately prior to his appointment to the upper house in 2008, according to one of the star witnesses at the Quebec inquiry into municipal and provincial corruption.
Lino Zambito, a construction company owner who was one of the first to tell Quebec's Charbonneau commission about the elaborate kickback schemes set up between municipal and provincial politicians, engineers and construction bosses, now tells CBC News that he also gave money to Leo Housakos, who, Zambito says, approached him for a $30,000 political donation in the fall of 2008.
At the time, Housakos, a businessman and prominent member of Montreal's Greek community, was the head of fundraising for the now defunct Action Démocratique du Québec, the small "c" conservative party then led by Mario Dumont.
In the run-up to the provincial election in December 2008, the fledgling party was doing so well, said Zambito, that construction firms like his took notice and were prepared to pay to win favour.
Last week, a spokesperson for Housakos relayed to CBC News the senator's previous statement that he had never been involved in illegal fundraising. He declined to be interviewed on what we said were new allegations (without revealing what Zambito had told CBC News), saying through his spokesperson that he "wasn't interested in talking to smear merchants."
In an interview with the Canadian Press, Housakos called CBC’s report "completely defamatory and erroneous" and "absolutely a hatchet job of the worst degree." He claims Zambito approached him and asked to get involved with ADQ financing. Housakos also told CP he had spoken to the Prime Minister's Office to share his version of the facts before the report aired Monday night, and that he has also consulted his attorney about possible legal action.
Since corporate donations are not allowed in Quebec, and the limit for personal donations was then set at $3,000 per contributor per party, Zambito says he had to use the illegal "prête-nom" system to come up with that kind of money. While never explicitly stated, he said he assumed Housakos knew the game.
"They all say 'Ah us, we took cheques, they're legal,'" said Zambito, adding he believes fundraisers were well aware of the system: "No one's going to make me believe they didn't know what was happening."
Many witnesses have now come forward to tell Judge France Charbonneau about the system whereby company executives would reimburse their staff, friends or family members for cheques that they would donate to political campaigns.
This "prête-nom" scheme was a way for companies to conceal an illegal corporate donation through a series of much smaller, seemingly legal contributions from different people.
"Could you raise me, from people you know, friends, raise me $30,000 of cheques," Zambito said of the fundraising requests
"Then it's your problem,do what you have to do."
The construction boss said he came up with between $20,000 and $25,000 in cheques for the ADQ that he handed off directly to Housakos on two separate deliveries in the fall of 2008, and then reimbursed his friends and employees.
He didn't make his $30,000 target, but he said Housakos was pleased with the sum.
Housakos denied that he had been involved in the “prête-nom” system.
"Give me one reason I would have any reason to believe that he would have been doing that [reimbursement of cheques]," he told CP.
"At no such time did I participate in any questionable or illegal fundraising, with the ADQ and Mr. Zambito as he claims — or as the report claims, quite frankly."
Fundraising for Conservative
Zambito says he was also willing to pay for influence at the federal level, and says Housakos approached him to solicit funds for Claude Carignan, one of Harper's star candidates in the 2008 federal election.
Zambito recalled Housakos saying: "'Claude's running, he's a close friend of mine, could you help me out?'
"I go listen, how much do you want? He said, 'If you could give $3,000, I'll be happy.' So I asked my father, my mother, they both scratched a cheque for $1,100 each, I scratched a cheque and I gave it to him."
These donations were legal, but Zambito says he is a longtime Liberal. When asked why he would donate to the Tories, Zambito said he only paid because he thought Housakos had influence in Ottawa too, that he was "one of the main guys."
"It's scratch my back, I'll scratch yours," Zambito said.
Carignan lost that election but would later be named to the Senate, where he has recently been named government leader.
Housakos is no stranger to controversy. He told the CBC earlier this summer that he is "tired of this witch hunt for the last three, four, five years" — referring to media stories about him dating back to the start of the Harper government seven years ago.
Housakos began making political contacts in the mid-1980s as a young Tory, and even ran for Harper's Alliance party in 2000.
He and a fellow Greek Montrealer, Dimitri Soudas, became involved with the Union Montreal party when Gérald Tremblay ran for mayor in 2001.
Longtime friends, Housakos and Soudas left the city within a year, and when Soudas got a job with the new Tory leader, Stephen Harper, in 2002, Housakos's network with the federal Tories broadened.
Less than three months after Harper became prime minister in January 2006, Housakos had a meeting with Public Works officials where he asked about Michael Rosenberg, a former Tory candidate whose firm RosDev was embroiled in a multi-million dollar lawsuit with the federal department over the management of two office buildings, according to a joint investigation by CBC News and the Globe and Mail in January 2008.
It was reported that Soudas, who was then the prime minister's deputy press secretary, also stepped in to try to resolve the RosDev file, an effort that landed him before Ethics Commissioner Mary Dawson. (He was later absolved by her of any ethical breach or inappropriate pressure.)
Housakos told Radio-Canada that his role was to tell the government it would be good to help out a party supporter like Rosenberg. He also claimed he never asked Soudas to intervene on Rosenberg's behalf.
Also in 2006, both Housakos and Soudas met with officials of Alenia, an Italian aeronautics company interested in selling hardware to National Defence, at a Montreal restaurant. But Housakos said it was an innocent happenstance where Soudas was in town and dropped in on a meeting.
Housakos was not registered as a lobbyist, said he was never paid as one, and told the House of Commons committee he did not contravene any lobbying guidelines.
Their names came up again during the 2011 election campaign when news reports said that Tony Accurso, a prominent Montreal construction boss and Bernard Poulin, head of one of the biggest engineering firms in Quebec, wanted Housakos to get Soudas to promote former city official Robert Abdallah to run the Port of Montreal back in 2007.
The port's board members told reporters they were pressured during a dinner in Old Montreal, where Soudas promoted Abdallah as his choice candidate. When this story broke, Harper confirmed Abdallah had been the preferred candidate of the PMO, but said no pressure had been exercised and that their candidate did not get the job in the end. Housakos has denied any role in this matter.
Abdallah was not chosen for the position. He has since been accused, in unproven allegations before Charbonneau, of being involved in a kickback scheme during his time at the City of Montreal (2003-06).
Accurso has been arrested twice in the past two years and charged with a string of offences including tax evasion, fraud, conspiracy, influence-peddling, breach of trust and two counts of defrauding the government. He has gone to court to try to avoid testifying before the Charbonneau commission.
In testimony before Charbonneau, Housakos's name has been raised twice.
The first mention dealt with his involvement with a Montreal engineering firm that won a federal stimulus contract to study the restoration of the Champlain Bridge.
But the Senate ethics officer had examined the matter back in 2009 and cleared Housakos of any wrongdoing.
His name was also cited on redacted documents outlining the guest list of a private Montreal club because he attended what commission investigators called "events of interest" back in 2007 and 2008.
Commission investigators say Housakos's name was on the guest list along with people who have since faced allegations of wrongdoing at Charbonneau, including Paolo Catania, who runs a construction company that Charbonneau testimony has linked to the Sicilian mafia, and Bernard Trépanier, the municipal fundraiser dubbed "Mr. 3 Per Cent" for allegedly demanding cuts on city contracts.
Housakos's lawyer, Emmanuelle Saucier, has since written to the CBC to say that the senator's meetings at 357c can in no way whatsoever "be used to link our client to illegal activities."
The inquiry documents also seem to show that Housakos arranged a dinner party for the ADQ at the private club on June 21, 2007, while he was the party's chief of fundraising. Among the dozen guests, the only one whose name has not been redacted is construction boss Joseph Borsellino of Garnier construction, who has been accused at the commission of price-rigging municipal contracts.
"In this context, we see an entrepreneur who has been invited to a cocktail for the ADQ and we've seen the profile of Mr. Housakos," said Sgt. Erick Roy, one of the commission investigators, justifying why Housakos's name was included. "So we see links between business people and political financing that fall directly into the framework of our investigation."
Housakos took exception to this allegation, calling the event "a networking event to meet the business community."
"So that to me is false — it's erroneous," Housakos told reporters in June when this issue first arose.
"I don't know if he was at the club while I was at that event, but at no such time did I ever come across Joe Borsellino in 2007 and I have no reason to believe that Mr. Borsellino would have been present at any of my meetings or events."
As for the other meetings, Housakos protested: "How was I supposed to know [four years before] that some of those individuals would be charged with serious criminal offences and their names would appear on countless occasions being accused of doing very unsavoury things."
Housakos says he supports the Charbonneau commission, but told reporters he resents the idea that reporting on those meetings makes him guilty by association.
"Not everybody in the construction industry and engineering industry are crooked," Housakos said. "Not everybody in the fundraising processes of the political system break the rules."
The CBC requested an interview with Housakos on three separate occasions recently. Housakos declined our requests, while insisting he had not participated in any questionable fundraising.
His lawyer Saucier sent a letter cautioning the CBC to "respect its code of ethics" and "ensure the veracity of the facts and the accuracy of your sources (anonymous or not), and that the evidence can support the conclusions and judgments."