Lalonde tells of cosy relationship with Union Montreal
Contrecoeur witness says donations were a known path to municipal work
A key witness in the Contrecoeur fraud trial said Friday that his engineering firm secured municipal contracts through a series of illegal political donations and kickbacks to the Union Montreal party.
Michel Lalonde said it was his close relationship with Union Montreal fundraiser Bernard Trépanier that put his firm in a position to earn $180,000 in contracts on the Faubourg Contrecoeur development project.
It was, Lalonde said, just one of many jobs that came his way because of the firm’s history of generous donations to the party that controlled city hall from 2001 to 2012. The witness claims Trépanier acted as a go-between for Lalonde’s Génius Conseil firm and Frank Zampino — the former No. 2 man at city hall.
Zampino was “the person to meet” if you wanted to do business with the city of Montreal, Lalonde told the court.
Trépanier and Zampino were arrested in 2012 and charged for their alleged role in a deal where city-owned land was sold at a fraction of its value to make way for a $300-million residential development. The land, known as Faubourg Contrecoeur, was sold to developer Paolo Catania’s company for $4.1 million in 2007 even though its municipal assessment was $31 million.
Catania and four of the executives at his company are also on trial.
Much of Lalonde’s testimony echoed his 2013 appearance at the Charbonneau Commission, where he detailed his role in a consortium of seven firms that secured lucrative municipal contracts in return for a three-per-cent kickback to Union Montreal.
It was a longstanding practice for engineering firms to make political donations in the spirit of “maintaining good relations” with the party that controls city hall, Lalonde said.
From the time of Mayor Jean Drapeau’s administration in 1980, Lalonde said, his firm was politically active.
“If we were solicited (for political donations), we showed them would support them,” said Lalonde. “They were open to keep giving us contracts.” After Drapeau, Lalonde said, the firm had a knack for backing the right candidate. They supported mayors Jean Doré and Pierre Bourque and kept a good relationship with the city until 2001 — when Gerald Tremblay’s Union Montreal party unseated Bourque.
When his candidate lost, Lalonde said, he feared being stuck in a sort of “purgatory” where his firm would miss out on city contracts — which made up roughly one-quarter of its overall annual revenue.
“All of our (municipal) contracts were in jeopardy,” he said.
But Lalonde said he knew Trépanier from his time as a fundraiser for the federal Conservatives in the 1980s.
He said Trépanier helped broker a meeting with Zampino at his office, and soon executives at Génius began attending cocktail fundraisers for Union Montreal.
He claims that what came next went beyond the bounds of ordinary political donations Génius had given to previous administrations.
By 2004, Lalonde says he’d started to develop a system of collusion with Trépanier and the seven firms. He claims Trépanier would supply him with a list of municipal projects to bid on and that Lalonde would take the list to the firms so they could divide the contracts among themselves. In return, Génius and the firms donated hundreds of thousands to the party — often, Lalonde claims, through cash or straw men schemes. Ahead of the 2005 election, the consortium developed a three-tier donations system — with companies bundling either $200,000, $100,000 or $50,000 depending on their size.
Lalonde claims Génius donated $100,000 to the party that year in addition to a three-per-cent kickback on its municipal contracts. To co-ordinate these efforts, Lalonde said, he and Trépanier called each other almost every day.
Isabel Schurman, Zampino’s lawyer, objected to much of Lalonde’s testimony Friday, claiming it did not pertain to the Contrecoeur fraud charges. “This is not fair testimony, not pertinent,” she said. “It has nothing to do with my client . ... (The Crown) is attempting to make proof of bad character.”
Ultimately, Judge Yves Poulin ruled Lalonde’s testimony an important part of the narrative the led to the Contrecoeur deal.
By the time the real-estate deal was taking shape in 2004, Lalonde said, his relationship with Trépanier was “very close” and he felt that it could pay off for Génius. It was in 2004, Lalonde said, that Trépanier set up a meeting with Martial Fillion, then the head of Montreal’s real-estate development corporation.
Fillion, Lalonde claims, arranged for Génius to secure a $180,000 feasibility study contract without opening it to competitive bidding against other firms. The contract was “split” into eight feasibility studies of just under $25,000 each — the maximum amount for solesource municipal contracts.
“In reality, it was just one contract,” said Lalonde. “It may as well have been.” The eight feasibility studies were the first contracts awarded in the Contrecoeur deal. Lalonde will resume his testimony on Monday morning.