SNC-Lavalin exec admits to illegal party financing in Quebec

Canada's biggestengineering firm, SNC-Lavalin, donated thousands of dollars to two of Quebec's provincial political parties and Union Montral, according to a company official.

Yves Cadotte, SNC-Lavalins general vice-president, told the provinces corruption inquiry the Quebec Liberal Party (PLQ) and the Parti Qubcois (PQ)asked formoney from the company on an annual basis.

Managers at SNC-Lavalin donated more than $1 million, which wasdivided almost evenly between both parties,between 1998 and 2010, the inquiry heard. It is illegal for corporationsto donate to political parties in Quebec.

The firms vice-president said political partieswanted set amounts of donations and expected them to be delivered.

"There are still parties in power and its the market that is important to us," said Cadotte. "We want to make sure we can take part in our activities and agree to the demands that are made [by the parties.]"

Cadotte alleged that Normand Morin, Pierre Anctil and Riadh Ben Assa whoall served as executive vice-president at SNC-Lavalin were involved in asking employees to writedonation cheques to the Liberal Party and the PQ.

During his testimony, Cadotte said about 50 employees and some of their spouses had agreed to lend their names for party donations, a violation of Quebec's law limiting political fundraising.

Hesaid the employees were free to decide which party they wished to support andSNC-Lavalin would reimburse them through year-end bonuses.

Parties solicited engineering firm, Cadotte said

Cadotte told the commission each of the two provincial parties had designated people who solicited funds from the engineering firm.

Cadotte alleged that the PQs former head of financing, Ginette Boivin, was involved in collecting funds destined for the party.

Boivin resigned from her position in 2007, a year after a report alleged she was involved in accepting $96,000 in illegal contributions from Groupaction Marketing between 1995 and 2000.

Cadotte also said former Liberal MP Violette Trpanier and Liberal organizer Marc Bibeau were involved in the alleged illegal financing.

The engineering firms vice-president said the company kept donating to ensure it would stay in the partys good graces.

"The dilemma not to contribute is a risk that could have been intangible," he said. "But its a risk we didnt want to take."

Cadotte said there was no "direct link" between the donations and the distribution of provincial public works contracts.

He said the financing of provincial parties came to an end in 2010 after an order from the firms upper management.

The witness told the commission that the tightening of laws surrounding party financing in 2010 had contributed to the firms decision to stop donating money to political parties.

Employees put names on donation cheques

After the midday break, Cadotte told the inquiry that SNC-Lavalin also donated money to Union Montral, the party of former Montreal mayor Grald Tremblay.

The same system involving SNC-Lavalin employees writing donation cheques was used formunicipal financing, Cadotte said.

According to his testimony, Cadotte and Normand Morin, a former vice-president at SNC-Lavalin, were in charge of collecting between $15,000 and $25,000 annually, depending on demands from the municipal party.

As noted by the corruption inquiry, the engineering firm used about 10 regular contributors to finance the political party.

In 2005, however, Cadotte said Bernard Trpanier, who was in charge of Union Montrals financing at the time, requested $200,000 for the partys election campaign.

Trpanier has been dubbed "Mr. Three Per Cent" by past witnesses at the commission. They alleged he demanded three per cent in kickbacks from the overall price of public works contracts.

Cadotte told the inquiry that the $200,000 payment was made in two instalments.

He said Trpanier asked that SNC-Lavalin pay a $75,000 bill allegedly issued by Morrow Communications.

It has not been made clear whether services were rendered by Morrow Communications.

Cadotte said the second payment of $125,000 was paid in a single cash transaction to Trpanier shortly before the November 2005 municipal election.

He said the transaction took place in a car outside of the campaign office of the former chair of Montreals executive committee, Frank Zampino.

He said Trpanier put the money in a briefcase and returned to the office.

Cadotte said he never dealt directly with Zampino, but told the commission he believes the financing plan was Zampino's idea.

Before the inquiry wrapped for the day,Cadotte said that SNC-Lavalin never diverted three per cent of the contracts the company was awarded back to Trpanier.

Company denies admission of illegal activity

SNC-Lavalin reacted swiftly to deny that its vice-president had admitted that the company participated in an illegal fundraising scheme.

The company said there was no actual admission of illegal activity.

It said its legal department, like those of other companies, believed that it was respecting the letter of the law as it existed before changes adopted in 2010.

"Mr. Cadotte did explain that we stopped this practice in 2010 when the law was made more explicit," company spokesman Leslie Quinton said.

"We don't consider that Mr. Cadotte made an admission that what the company did was illegal."