Simard-beaudry sidesteps ban
Barred from bidding on public contracts, construction firm is assisting others
“It’s a hole in the law. … My fear is that it’s legal and a brilliant way to get
around the spirit of the law.”
PROJET MONTRéAL LEADER RICHARD BERGERON
Even though Antonio Accurso’s Simard-Beaudry Construction Inc. is temporarily barred from bidding on public contracts because of a 2010 tax-evasion conviction, it is bankrolling the guarantees on construction bonds for two other companies connected to the construction magnate that are continuing to win contracts with Quebec municipalities and the province.
Provincial real estate records show that in July Simard-Beaudry Construction put up properties it owns on Rang Saint-Elzéar E. in Laval as collateral to provide bonding of up to $500 million for Louisbourg SBC s.e.c. and Gastier M.P. Inc. with an insurance company.
In construction bonding, the security can be any kind of asset. In this case, it’s the land, the buildings on it, plus equipment and inventory in the buildings, a deed filed on Simard-Beaudry Construction’s properties shows.
Louisbourg SBC and Gastier have had bonding agreements with the insurance firm, Aviva Insurance Co. of Canada, since 2008, the deed says.
Companies that bid on provincial and municipal contracts are required to have a performance bond provided by a recognized insurance or bonding company when they submit their bids.
The bond is a kind of insurance policy to the public body in case the winning construction firm goes bankrupt while it’s working on the contract or for some other reason can’t complete the work. The bond will cover the public body’s costs to find another company to complete the work.
The National Assembly passed legislation known as Bill 35 in December that prohibits a company convicted of fraud or another criminal offence from bidding on, or working on, public contracts for five years following the date of conviction.
The temporary ban also ex- tends to a company that has any directors who were convicted of a criminal offence or who are directors of another company that has been convicted.
Simard-Beaudry Construction pleaded guilty to tax fraud in late 2010.
Accurso, who was charged with tax fraud in August and also faces corruption-related charges in Mascouche, has not been convicted of a crime.
Montreal opposition party Projet Montréal has calculated that Louisbourg SBC and Gastier have won a combined $70 million in contracts from the city of Montreal so far this year.
“It’s a hole in the law,” Projet Montréal leader Richard Bergeron said when told of Simard-Beaudry’s guarantee on the construc- tion bonds of the two other firms. “It’s a new trick and it violates the spirit of the law. … My fear is that it’s legal and a brilliant way to get around the spirit of the law.”
Bergeron noted that Louisbourg SBC is winning more contracts with the city of Montreal this year than before.
“It’s an example of indirectly circumventing the law and it confirms for me that we have to look at the law again and tighten Bill 35,” Montreal city councillor Réal Ménard, a member of opposition Vision Montréal party and borough mayor of Mercier-Hochelaga-Maisonneuve, said.
Ménard added that what makes him uncomfortable is that a company that isn’t permitted under Bill 35 to bid on public contracts can use its assets as security to enable other companies connected to the same shareholders or company directors to win public contracts.
The Quebec construction industry is under a microscope now with the Charbonneau Commission examining allegations of collusion and corruption.
But Bergeron said the industry needs “shock treatment,” and suggested the Quebec government take control over companies that are convicted of crimes, such as the ones connected to Accurso. It could split up the companies and sell them, he said.