Senator Leo Housakos rips CBC, NDP wants fundraising probe

Conservative Senator Leo Housakos ripped into the CBC Tuesday for a story he said suggests he was involved in improper fundraising during his time in Quebec, calling the report "a hatchet job of the worst degree."

The senator's strong denial, however, did not dissuade political opponents from calling for a larger probe into the possibility of questionable political fundraising at the federal level.

• Conservative senator denies involvement in questionable fundraising

Opposition Leader Thomas Mulcair told reporters that the Charbonneau commission in Quebec had outlined how construction executives and politicians had come together to thwart the law and extract favours, both municipally and provincially.

Prime Minister Stephen Harper, the NDP leader said, "should try to find out if the same sort of system was put in place for the Conservatives" federally.

The CBC News report Monday quoted construction boss Lino Zambito, one of the starwitnesses at the Charbonneauinquiry, saying he raised about $25,000 for Housakos for the 2008 provincial election using the illicit "prte-nom" scheme.

He said he also gave Housakos another approximately $3,000 in legal donations for a federal Conservative candidate in 2008.

Housakos called the CBC "completely defamatory and erroneous." He also said Zambito approached him to make a donation to the Action Dmocratique du Qubec, the now-defunct provincial partyfor which Housakos, a Montreal businessman, was head of fundraising.

That is not the way Zambito remembers it, however.

"Listen," Zambito told CBC News Tuesday, "I met Housakos at a cocktail atL'Unique in the summer [of 2008]. He was introduced to me and he's the one thatapproached me to help him I'm not the one who approached him.

"At the time, I was helping out [Liberal PartyMNA]NathalieNormandeau, and I wasn't really that interested in helping theADQ."

At the Charbonneau inquiry into municipal and provincial corruption in Quebec, Zambito andseveral other witnessessaid there was a system in place to make illegal corporate donations to political parties in return for getting an advantage on government contracts.

These witnesses have all been promised immunity from criminal prosecution for their testimony.

The construction boss, who has since gone bankrupt and undergone heart surgery, said Housakos asked for $30,000 but he was only able to come up with about $25,000.

He believes Housakos knew the money was illegally assembled through what was then a fairly common system whereby company executives would reimburse their staff, friends or family members for the individual cheques they would donate to political campaigns.

The straw man scheme

This so-called "prte-nom" (straw man) scheme was a way for companies to conceal an illegal corporate donation through a series of much smaller, seemingly legal contributions from different people.

Housakos denied knowing about the tactics in an interview with the Canadian Press: "Give me one reason I would have any reason to believe that he would have been doing that [reimbursement of cheques]."

Zambito also claimed that Housakos approached him for money for Conservative Claude Carignan's federal campaign in 2008, and he came up with $3,000 in cheques made out by himself and his parents.

In his conversation with CP, Housakos confirms he did ask Zambito for a donation to the federal Conservatives, saying that he asked the construction boss to donate whatever he wanted. Housakos says Zambito then offered the three donations, within the legal limit.

But this contradicts Housakos's claim before a parliamentary committee in February 2008 in which he stated: "Since January 2006 I have never solicited anybody for the Conservative Party in Quebec.

"Since my nomination to the board of Via Rail at the end of 2007, I've refrained from any political activity at the federal level."

A Housakos spokesperson told the CBC again last week that the senator did no fundraising for the Tories during that period.

Two former leaders of the ADQ also commented on the allegations contained in the CBC story.

Former leader Mario Dumont, now a talk show host in Montreal, said Tuesday he was unaware of any illegal fundraising during his time as head of the ADQ, and if there was any going on then it should be investigated and perpetrators punished.

However, Gilles Taillon, a well-known business leader who won the leadership of the ADQ in 2009 after Dumont stepped down, told CBC News he was warned by party members that some of the ADQ's financing looked as though it was breaching electoral law.

"Some people said to me there are prte-noms in our financing," Taillon told the CBC this summer. "Your house is not perfectly clean."

In April, Quebec's chief electoral officer Jacques Drouin said his team had identified $13 million in questionable donations made to municipal and provincial parties between 2006 and 2012.

Of this amount, Drouin identified $10 million in illicit donations, most of which went to the provincial Liberal party and the Parti Quebecois, and $800,000 went to the ADQ.

Elections Qubec confirmed with CBC that most of the suspicious funds raised for the ADQ were gathered between 2006 and 2008, a period that involved two provincial elections in quick succession and in which Housakos was still in charge of financing to the party.

Housakos left his job of chief fundraiser for the provincial party in December 2008, when he was appointed to the Senate.

Last week, the first fines were issued as a result of Elections Quebec investigation, and one of the penalties involved fundraising infractions that happened during Housakos's watch as head of finances.

The former ADQ member who was fined is Mario Charpentier, who is accused of helpingtwo individuals contribute more than the allowable $3,000 limit back in 2008.He blamed administrative errors for what happened, and is seeking to be absolvedof any wrongdoing.

During an interview on a popular Quebec talk show Tuesday morning, Zambito addressed Housakos's claims, saying there was only one way to be sure.

"I challenge Mario Dumont and Housakos to go testify at the commission and deny under oath that they did any illegal financing or that they knew about it."