Aquatics fiasco years in the making
Gazette gets information after 7-year court battle
Signs of an impending financial debacle were apparent more than a year before Montreal was stripped of the FINA World Aquatics Championships that were slated for July 2005. Thousands of pages of financial documents obtained by The Gazette reveal an organization in disarray as late payment notices piled up and the committee’s head, Yvon Desrochers, wrote apologetic letters to creditors attempting to deflect the blame.
Yet even as the bills accumulated, the organizing committee spent millions of dollars obtained mostly through grants from the federal government to pay, and even sometimes loan, money to companies that were associated with members of the organizing committee, the documents show.
The Gazette obtained the committee’s financial records from the city on Thursday following a seven-year court battle to gain access to them under Quebec’s access to information law. The Gazette filed its request with the city in January 2005, after the world aquatics body, the Fédération internationale de natation (FINA), removed Montreal as host of the event because the financially troubled Montreal organizing committee had failed to muster enough sponsorship for the event. Desrochers committed suicide days after the event was pulled from Montreal, just before he was to appear before the House of Commons Public Accounts Committee to explain what had become of $16 million in federal government subsidies for the event.
FINA reinstated the city as host shortly after Desrochers’ death, after Mayor Gérald Tremblay pleaded with the world aquatics body and promised the city would cover any deficit.
Ultimately, the city was left to cover a $4.77-million shortfall.
The disclosure of the financial records helps explain some of what happened to the public’s money.
At least $1.05 million of the organizing committee’s funds went directly to DesRochers, who was the organizing committee’s executive vice-president and general director, and two companies he owned. That amount funded honorariums and ex- penses between his hiring in the fall of 2002 and his suicide in February 2005, an examination of hundreds of pages of bills and invoices to him, and to his companies, Productions Nadis Inc. and 6017517 Canada Inc., shows.
■ Productions Nadis billed the organizing committee, known as Montreal 2005, for at least $633,830.61 between December 2002 and April 1, 2005.
■ Of that, $577,459.21 was for professional consulting fees. The rest was expenses.
■ 6017517 Canada billed the committee more than $400,000 between October 2002 and April 2004. Of this amount, $354,549 was for professional fees, the rest was for expenses.
There were signs of discord between at least one organizing committee member and Desrochers over expenses.
In an email to Desrochers dated Oct. 21, 2003, committee member Marco Veilleux complained, following a dispute over reimbursement of Veilleux’s travel expenses, that “it seems incomprehensible to me that the executive of the 2005 organizing committee can’t travel in business class when travel is required but the vice-president (and) director general (you, in this case) can travel in business class (under your contract, evidently) for the same trip.”
A month later, on Nov. 25, 2004, Desrochers wrote an email to Canderel, the company managing 1010 de la Gauchetière, where Montreal 2005 was headquartered, apologizing for “not being able to make the payment that’s due to you.” The building manager had emailed Desrochers the day before seeking two months’ rent, $26,868, as security deposit on the office.
A few months earlier, in July 2004, FINA executive director Cornel Marculescu, based in Lausanne, Switzerland, wrote to Desrochers demanding that two outstanding invoices, for $2.55 million U.S., be settled. The letter was stamped “second reminder.”
While the organizing committee struggled to keep up with its bills, it also issued a series of cheques between 2002 and March 2005 worth more than $300,000 to another corporation, Société des Internationaux du Sport de Montréal. The last cheque was issued before Tremblay appointed himself co-chairman of the organizing committee and appointed a new board.
ISM, a non-profit corporation, bid on the FINA event in 2001 and set up the organizing committee.
The organizing committee was headquartered in the same building as ISM, at 1010 de la Gauchetière St. W., though in separate offices.
ISM president and CEO Jean Perron billed $15,691.11 for expenses related to trips to FINA events in Barcelona, Dubai, Frankfurt and Indianapolis between January 2002 and October 2004.
Receipts indicate the expenses were for airfare, hotels, meals, taxis and other travel-related items.
ISM’S mission was to woo international sporting events to Montreal. It closed in the spring of 2005.
Former Montreal Canadiens hockey team general manager Serge Savard was chairman of the corporation’s board. Other public personalities sat on its board over the years, including Tourism Montreal president Charles Lapointe and Richard Pound, head of the world anti-doping organization.
The organizing committee also gave $613,378.35 in loans to Mondial des Jeux et Sports Traditionnels, a corporation that was headquartered in the same office as ISM, according to its invoices. Most of the payments, made between Dec. 11, 2002, and June 27, 2004, were $50,000 cheques paid as “short-term loans,” according to the accounting records. The largest was a $200,000 cheque issued on Jan. 6, 2004.
Three of the payments, totalling $1,652.99, are for office supplies and furniture from Bureau en Gros. The purchases ranged from staples and corrector tape to computer software and office chairs.
Handwritten notes on the payment orders indicate the bills were to be filed under “suppliers to pay.”
It’s unclear what contract-awarding rules and procedures the committee followed.
Desrochers awarded a contract in September 2004 to a project manager for construction of temporary structures at Île Ste. Hélène for the event. Desrochers awarded the contract just two days after the project manager submitted his bid.
“It goes without saying that we’re awarding the mandate to those who already have intimate knowledge of the project ... It’s my pleasure to confirm that to you,” Desrochers wrote in a letter to the project manager.
Desrochers then writes he’ll advance $50,000 for the work “to avoid delays that would cause inconveniences and additional costs.”
The documents show DesRochers took 15-per-cent commission on contracts and sponsorships he negotiated.
The Gazette obtained the equivalent of six boxes of documents Thursday. However, the city refused to release other documents, citing confidentiality and the protection of industrial secrets.
The Gazette plans to appeal that decision.
The gazette argued in court that the city, like the provincial and federal governments, had representatives on the Montreal 2005 board who were supposed to be watching where the public’s money went. Quebec’s access-to-information commission ruled in the newspaper’s favour in January.