SNC-Lavalin executive admits to over $1 million in illegal political donations

RCMP officers are shown in the lobby of SNC Lavalin in Montreal, Friday, April 13, 2012. (Graham Hughes / THE CANADIAN PRESS)

MONTREAL—An executive at SNC-Lavalin admitted at the Charbonneau Commission on Thursday that his company helped raise money for Quebec political parties despite the practice being illegal in Quebec.

Yves Cadotte, a vice-president at SNC-Lavalin, testified at Quebec's corruption inquiry that company executives and some of their spouses donated over $1 million to the Liberals and Parti Quebecois between 1998 and 2010.

According to a system in place at the company, executive bonuses would be provided to cover the donations. It is illegal in Quebec for a company to give money for the purpose of a political donation.

Cadotte said he didn't believe the donations helped get public contracts. On the other hand, he said the company was afraid of what would happen if it didn't donate.

"That's the dilemma: not contributing would be a risk that is perhaps intangible," he said. "Maybe there is no (consequence), but in our mind it's a risk we don't necessarily want to take."

SNC was active at the municipal level: It contributed to Union Montreal, with the help of staffers willing to give on behalf of the company. In 2005, it agreed to give $200,000 in illegal campaign funds to former Mayor Gerald Tremblay's campaign.

Cadotte testified former SNC Vice-President Pierre Anctil, a former strategist with the provincial Liberals, handed him the cash to give to Union Montreal fundraiser Bernard Trepanier. The fundraiser shared an electoral office with former executive committee chairman Frank Zampino.

“Mr. Trepanier climbed in my car, I had the envelope; we drove a little bit and I gave him the envelope,” Cadotte told the commission.

What was the money for? Cadotte refused to say if it was in exchange for specific contracts and only gave evasive answers.

“It was chaotic, there was no real system in place,” he testified.

After the testimony, SNC denied that the company had provided the bonuses to executives as described. According to the engineering giant, the company believed it was within the law.

The commission turned its focus on illegal political donations earlier in the day. It began by interviewing one of its own investigators, former La Presse journalist Andre Noel, about the work he did matching political donors to their incomes.

Noel, whose investigative articles into politics helped create the impetus among the public for an inquiry into corruption, explained how he looked at lists of political donors and then looked up their addresses.

He said he was surprised to see sizable numbers of people who had made the maximum, $1,000 donation to political parties lived in working class neighbourhoods in Montreal.

Noel decided to visit several donors to figure out if these were legitimate donations from politically involved citizens, or if people were being used as fronts to get around the cap on individual limits.

He found that many people admitted to making donations because they had been reimbursed by their employer or some other person with means.

Some of the people who were listed as donors were not even aware that their names had been used.

At one home, Noel said the residents told him the person listed as a donor was "an assistant cook in a reception hall...the place where Union Montreal held a fundraiser."

Following Noel's testimony, several donors were summoned to testify, each reciting the same story: they were asked to write a cheque for $1,000 to make a donation, and were told they would be reimbursed.

Most were unaware that what they were doing was illegal, and many said they felt their jobs would be at risk if they refused the request.