Ex-construction firm boss admits to collusion in Quebec government contracts
Wednesday, Apr 09, 2014 04:45 pm
MONTREAL - A former Quebec construction boss says his firm was involved in systemic collusion on provincial government contracts over a period of several years.
Normand Bedard's admission on Wednesday came as the former president of major construction firm Sintra confirmed the existence of rigging on infrastructure contracts.
His avowal is just the latest heard by the Charbonneau Commission, which is looking into corruption within Quebec's construction industry.
Since September 2012, bureaucrats, engineering firm executives and construction company bosses have admitted to widespread collusion at various levels that drove up the price of contracts.
The corruption inquiry began turning its attention this week to contracts involving the provincial Transport Department. It's one of the final topics left before a final report that is expected to be tabled next April.
Bedard said he first heard of collusion while working in Granby, southeast of Montreal.
He testified it was another boss who informed him in 1986 that local and provincial roadwork contracts were divided equally among three firms in the region. Contracts doled out by the government in the area and examined by the commission showed 63 out of 96 were rigged between 1997 and 2002.
Bedard said the system extended elsewhere in the province and predated 1986.
"I didn't invent anything," he testified.
Bedard confirmed that Sintra had an agreement with Construction DJL, its primary competitor in Quebec, to split provincial contracts.
The inquiry has heard that during a 15-year period, Sintra received $1.645 billion in government contracts while Construction DJL received $884 million.
Bedard said the collusion ended when the companies decided it was no longer necessary.
"We didn't need it to live," Bedard said.
The profit margins for contracts that were subject to open bidding remained between five and eight per cent, while rigged contracts had profit margins of between 10 and 20 per cent more than those with open bids.
The inquiry also heard that Sintra employees and their families gave generously to political parties. Records compiled by the corruption commission suggest $170,000 in donations between 1998 and 2011.
The amounts varied from year-to-year, split between the Parti Quebecois and the Quebec Liberals, depending on who was in power.
Bedard's own donations — which amount to $6,050 — and those of his wife, were reimbursed by the company and were illegal. He said he ordered an end to political party donations in 2006.
Like other witnesses before him, Bedard also said that clients — which includes government employees — were often plied with gifts like concert and hockey tickets and bottles of wine at Christmas.
Some regional directors for the Transport Department were also given high-end gifts like fishing trips, but Bedard said this practice did not extend to a sitting minister.
These perks eventually fizzled out.
"It was a culture that existed, it was just like that," Bedard said.
On Tuesday, the inquiry looked at some of the links between Quebec government contracts, the firms bidding on them and amounts that found their way to provincial political parties.
The total amount stemming from government engineering contracts in the entire province between 1997 and 2012 was $2.8 billion.
Martin Comeau, an expert witness, testified that a dozen engineering firms won roughly 87 per cent of government contracts. These firms contributed generously to Quebec's main political parties of the day, to the tune of $14.8 million.
The money was divided among the three major parties:
— About $8.3 million went to the Quebec Liberals, or 56 per cent of the total donations.
— The Parti Quebecois received about $5.3 million, or 36 per cent.
— The now-defunct Action democratique du Quebec received $1.2 million, representing about eight per cent.
The engineering firms that received the lion's share of contracts were Dessau, SNC-Lavalin, Genivar et CIMA+.
The political contributions came from intermediaries — a total of 2,822 different official sources. The figure is considered a minimum since only official donations are part of government records.
Comeau, director of research at the Charbonneau Commission, said construction firms also contributed to political parties, but much less than their engineering counterparts.
The 15 construction companies that won contracts over the same period donated $2.2 million. The Liberals received 65 per cent, the PQ 28 per cent and the ADQ seven per cent.
Government contracts started costing less in 2009 — right as the provincial government's fight against corruption and collusion was ratcheting up.
Comeau said that from 2009 to 2013, the average price of contracts awarded by the Transport Department fell by about 14.5 per cent.