After the rain comes the good weather, they say. After the hurricane of the Charbonneau Commission and the thousands of jobs lost, has the sunshine returned to the Quebec consulting engineers? This is an excellent question to which I will explore in a four-step answer: the operation of public contracts under construction in Quebec, an overview of the Charbonneau Commission, engineering consulting firms and its engineers and job prospects in this sector.
During the previous blog post, the Charbonneau Commission revealed to us how the mafia, the cartels under construction, the city officials and even Union Montreal’s number 2, Frank Zampino, were involved. Today, we will see other aspects brought to light by the commission, namely the consulting engineering firms, the water metering device affair and the political financing of Union Montreal.
This blog article is the third in a series on Quebec consulting engineering. Having been an engineer at SNC-Lavalin, I have every credibility to be able to express myself on this subject.
Overview of the Charbonneau Commission report
In order to fully understand the future of consulting engineering in Quebec, it is important to go back to the Charbonneau Commission. As this is an overview, I will only talk about corruption in Montreal, but know that it had spread to Laval, Gatineau, Quebec city, Terrebonne, etc.
All that following material have been taken directly from of the Charbonneau Commission final report and translated, except for my comments which are clearly identified. You can download it at:
The engineering firms
When the Tremblay-Zampino team enters City Hall, a new law is shaking relations between the city administration and the engineering consulting firms.
Law 29 first and then Law 106 upset this environment. Except in exceptional cases, legislative changes put an end to the awarding of private contracts. Only contracts of $ 25,000 or less may be awarded by mutual agreement. If the planned expenditure is greater than $ 100,000, the city must issue a bidding process. If it varies between $ 25,000 and $ 100,000, a written invitation must be sent to at least two suppliers.
The results are almost instantaneous: prices fall. Michel Lalonde, of Groupe Séguin, spoke of a “fierce competition” which encouraged firms to bid up to 25% under the price lists. Stunned for a while, the engineering consulting firms finally recover. Their presidents are working together to avoid a price war, said Patrice Mathieu, vice president at Tecsult.
Signatories undertake in writing to “charge fees commensurate with the value of the services rendered [or] to be rendered and recognized in a given sector”, in short to respect the AICQ (“Association des Ingénieurs Conseils du Québec”, rebranded “Association des Firmes de Génie Conseil” or AFG) scales. The commitment includes the signature of the presidents of Dessau, SNC-Lavalin, Genivar, BPR, CIMA +, Roche, Groupe S.M., Groupe Séguin, Tecsult and Macogep.
Like the cartels on the sidewalks or the sewers, this commitment is intended to prevent competition between firms from completely eroding profits. More about consulting engineering firms and the Charbonneau Commission in another blog post.
The cartel is the merger-acquisition for those who can not afford it.
Montreal-based engineering consulting firms expect the Tremblay-Zampino team to meet its commitments to them. We remember that before the elections, Frank Zampino had asked for a contribution of $ 100,000 to the firm Roche; he had made it clear to his representative, Marc-Yvan Côté, that Union Montréal wanted to obtain the financial help of large firms.
Reading this request from Frank Zampino, we realize that the real culprits of the corruption scandal were the politicians and not the engineering consulting firms, even though they were involved. Let’s not forget that not so long ago, some Quebec Prime Minister during the Quiet Revolution played the same song.
If you want subsidies, vote on the good side
– Maurice Duplessis
The water metering devices affair
The contract has two components: the implementation of water meters in industries, businesses and institutions (ICI) and the optimization of the water distribution network. It is awarded for $ 356 million, making it one of the largest contracts in the history of the City of Montreal. Considering all the costs, the budget for the project is about $ 600 million.
In September 2009, a report by the City’s Auditor General, Jacques Bergeron, highlighted several administrative irregularities in the management of the water meter project. The report notes that the contract was awarded “in a context that did not favor the best price”. The auditor points out that at least one decision “significantly restricts the competition market”.
He is concerned about inappropriate meetings that were likely taking place during the process between city officials and bidders (whom he does not name):
On the face of it, he says, this information casts doubt on the promiscuity links between these people and on the influence that these meetings might have had on the progress of the project.
- – Translation from the testimony of Jacques Bergeron, Auditor General of the City of Montreal, Room 41P-534, p. 1-2.41P-534, p. 16-17.
He sends his case to the SQ. The conclusions of the report, published during the election campaign, are so disturbing that Mayor Gérald Tremblay decides to announce the termination of the contract.
More about the water metering devices affair in another blog post.
NAME LENDING SCHEME
In March 2013, André Noël, a Commission investigator, analyzed the lists of Union Montréal contributors for these two election years, 2005 and 2009, and isolated some 1,350 donations of $ 1,000, as well as a few dozen donations. $ 500. He sorted out these contributions to keep only those made by voters living in middle-class neighborhoods.
In 2005, the average pre-tax income of Montrealers aged 15 and over with income was approximately $ 33,000. Using Google Street View, Christmas has identified a hundred or so dwellings that could likely be lived in by voters earning this average income, such as apartments in duplexes. He chose 32 addresses among these dwellings, in order to have a portrait of different areas of the City.
When respondents were visited by Commission investigators, a fear of another type could make them silent: the need to testify in public. Despite this, most of them responded frankly. Four name lenders were identified during this tour also appeared before the Commission.
Trepanier recounted the following example. A company won a good contract: he then called its manager or sponsor and sold him 30 $ 500 tickets for a total of $ 15,000. The company would try to find enough name lenders to officially buy these tickets. If it did not succeed, its representative could pay the difference in cash: “We put it in … he put it in the hat,” Trépanier said.
Bernard Trépanier was the fundraiser for Union Montreal during the Tremblay-Zampino era. He was also known as Mister 3%, taking a 3% cut for every construction contract that was awarded by the City of Montreal.
THE BRIEFCASE FULL OF MONEY
For his part, organizer Martin Dumont stated that Union Montréal temporary employee Alexandra Pion had complained to him that Trépanier had asked him to count money bills totaling approximately $ 850,000. According to him, she no longer wanted to do this kind of work, which was not part of her receptionist duties.
So I go in, and that’s when Mr. Trépanier asked me to put the $ 20 bills together and the $ 50 bills together, and that’s where I saw him come in with a briefcase, a standard size briefcase that was, that had money inside. Without hesitation, I told Mr. Trépanier that it was not my job, and I left. He did not restrain me.
- – Translation of the testimony of Alexandra Pion, transcript of 21 January 2013, p. 52.
The Anti Name Lending Law on Electoral Contributions put an end to anonymous donations after its adoption by the National Assembly in December 2010 (the law entered into force in May 2011).
THE OFFICIAL AND UNOFFICIAL BUDGETS
The December 2004 by-elections in the borough of Saint-Laurent give an insight into the use that Union Montréal could make of its unaccounted revenue. The elections were prompted by the forced departure of two corrupt city councilors who had been elected under the banner of the party, René Dussault and Irving Grundman, a case that dated back to 2002.
As an organizer, Dumont still wants to ensure that the expenses will not exceed the maximum allowed. He asks to meet the official agent, Marc Deschamps. According to his testimony, the meeting would have been held in early December, two weeks before the elections. Dumont said mayor Tremblay was present.
And when … when Marc Deschamps pulled out the paper to say, “That’s why we have an official budget and we have an unofficial budget”, that’s when the Mayor of Montreal, Gérald Tremblay stood up and said, “I do not have to know that. “
- – Translation of the testimony of Martin Dumont, transcript of October 30, 2012, p. 79.
This document and Ouellet’s testimony give the impression of a double accounting where the real expenses are higher than the declared expenses. When he testified in October 2012, Dumont had mentioned memory numbers, without the help of any text. However, they were very close to those on the document submitted by the Union Montréal attorney. He had mentioned the presence of two columns, one for informal expenses and the other for official expenses, and this was confirmed.
THE FIRING OF BERNARD TRÉPANIER
Five or six months after being appointed Executive Director of Union Montréal, in the fall of 2004, Ouellet was visited by Mr. Gilles Hébert, a lawyer close to the party. Hébert told him of a rumor about Trépanier, who had just been appointed head of financing. According to him, “the Sûreté du Québec followed or investigated or checked certain things about Mr. Trépanier”.
Ouellet tells Hébert that they have a duty to talk to the mayor. They get an appointment with him. The chief of staff of Tremblay attends the meeting. Hébert repeats what he has heard. “A month later, we were informed that the checks were done and there was no problem,” said Ouellet.
It was not the first time Tremblay had been made aware of Trépanier’s suspicions. Cloutier had warned him more than once before 2004. He told him, “Gerald, you’re doing a bad job. ” ” Which? Asked Tremblay. “Bernard Trepanier is not a good man for you,” said Cloutier. I have known him for several years, 25 years, and he plays with money. You should get rid of this guy. But Tremblay did not follow his advice and did not get rid of him.
Tremblay returns to his office, then meets Trépanier for less than two minutes. Trepanier asks him why he is fired. “I will not give you a reason,” Tremblay answers. Trépanier tries to convince him to change his mind: “Yes, but I have to work,” he told him, “I have just bought a condominium. Tremblay remains adamant: “The decision has been made,” he replies. He refuses to give him the reason for his dismissal because he fears that this revelation will generate threats or acts of intimidation. He then communicates with Deschamps to inform him of his decision, always without giving the reason.
THE “FIRING” OF BERNARD TRÉPANIER
In any event, Tremblay did in fact declare to the Commission that he had dismissed Trépanier because of this allegation, but in fact Trépanier continued to hold the same position, to the knowledge of Tremblay. Zampino said Trépanier had told him that his post had been abolished only in the summer of 2006, “but that he would still continue in his role as funding director for the Party.” “I continued to fund for the party in 2006, 2007, 2008,” said Trépanier. The mayor was at the door, the mayor has always been with me. ”
Deschamps confirmed that it was a dismissal for the form. The purpose of the operation: to distance yourself in appearance from Trépanier while ensuring that he continues to do exactly the same job, but without being paid:
Q. So, […] if I understand you correctly, what we were trying to do was to save appearances? That is to sideline him in appearance only, officially only, but while keeping him because he was doing a good job for Union Montreal, unofficially?
A. I would read the events like this. I could not have said it better.
- – Translation from the testimony of Marc Deschamps, transcript of March 25, 2013, p. 49-50.
THE END FOR UNION MONTREAL
In 2011, the Marteau squad launched an investigation into the Faubourg Contrecoeur project contract, which will lead the following year to the arrest of Trépanier and Zampino, as well as seven other people. Accurso will be arrested the same month following an investigation by the Permanent Anti-Corruption Unit (UPAC) in Mascouche. He will still be arrested the following year with Sauriol and 35 other people following the investigation of the UPAC in Laval.
For his part, mayor Gérald Tremblay will resign in the fall of 2012 after the start of the Commission’s hearings, which focused specifically on the City of Montreal. The management of his administration was strongly questioned, while the mayor had to negotiate a new financial and fiscal partnership with the other municipalities and the Quebec government.
He will be replaced by Michael Applebaum, Mayor of the Côte-des-Neiges-Notre-Dame-de-Grâce borough. Applebaum will have to resign in June 2013, after being accused of breach of trust, fraud against the government and acts of corruption in municipal affairs.
As we can see, a political organization, as a company, is only as honest as its leader. Any corruption at the helm ends up being transmitted to the entire vessel. Finally, even if it takes time, the truth always ends up surfacing.
More about political financing at Union Montreal in a future blog post.
This throwback on the Charbonneau Commission focused today on engineering consulting firms, the water metering devices affair and financing at Union Montreal. You could see how these different participants were involved in the corruption scandal in the construction industry. Now that the commission is behind us, let’s look to the future without forgetting the lessons of the past. In the next blog post in this series, I will discuss the duties and responsibilities of the consulting engineer.
Those who cannot learn from history are doomed to repeat it.