City of Montreal launches $14M lawsuit over water meter contract cancelled in 2009
'The money was stolen by dishonest people, dishonest companies,' says executive committee chair Benoit Dorais
The City of Montreal is seeking more than $14 million in damages from individuals and companies involved in Montreal's cancelled $356-million water meter contract.
The city filed a lawsuit in Quebec Superior Court on Wednesday.
Named in the suit are Antonio Accurso, Frank Minicucci, Frank Zampino, Paolo Catania, André Fortin, Pascal Patrice, Bernard Poulin, Gérard Laganière, as well as construction firms including Simard-Beaudry, Frank Catania & Associates and Groupe SM.
"The money was stolen by dishonest people, dishonest companies," executive committee chairman Benoit Dorais said today at Montreal City Hall.
It's nine years since then-mayor Gérald Tremblay cancelled the contract.
"We want to have a strong case, and we want to be sure that we will win in court, so we made all the efforts, all the analysis that [was] necessary," said Dorais.
He said the administration is leaving the door open to other lawsuits regarding the awarding of public contracts. The law firm IMK is handling the suit, along with city lawyers.
Largest contract in Montreal history
Tremblay cancelled the contract, the largest in the city's history, after a scathing report by Montreal's auditor general, Jacques Bergeron.
The contract was awarded to Génieau, a consortium made up of Simard-Beaudry and Dessau. Bergeron concluded the tendering process had been flawed from top to bottom: "too fast, too big [and] too expensive."
Tremblay resigned as mayor in 2012, denying any direct knowledge of corruption within his administration. In 2015, the former mayor himself became the subject of a police investigation, led by the provincial corruption unit, UPAC. He was never charged with any crime.
The water meter contract featured heavily in the Charbonneau Commission, a provincial inquiry that examined the process of awarding public contracts to construction and engineering firms from 2001 to 2009. The commission's final report is repeatedly cited in the city's lawsuit.
Commissioner France Charbonneau heard about a system of collusion in which a group of construction firms would decide in advance which firm's turn it was to receive a public contract. The firms would then submit bids in concert to ensure the intended company submitted the lowest bid.
The water contract lawsuit alleges that SNC-Lavalin was dropped from consideration because it was not part of the "cartel" of construction firms involved in bid-rigging — leaving Génieau and Catania-SM as the remaining bidders.
It also alleges dozens of points of contact between Zampino, the city's executive committee chairman at the time, and representatives of the two consortiums during the tender process — contacts that were forbidden, according to the city's procurement regulations.
Also cited in the lawsuit is Réjean Lévesque, the city's director of water management at that time, who detailed his concerns about the tendering process in a memo he sent to his superiors.
The $14,033,458.40 sought by the city includes $10,220,266.93 paid by the city to Génieau as a penalty for cancelling the contract, $3,122,830 in damages and other fees associated with the contract.