Quebec’s Culture of Corruption

Corruption is just a part of life in Quebec, and Alberta tax dollars are helping to fund it.

Quebec: The most corrupt province

Shell company tied to Russian tax fraud paid Bombardier tens of millions, documents show /via @globeandmail https://t.co/O13ZzZ6P6I

— Les Perreaux (@perreaux) March 7, 2019

As the SNC Lavalin scandal gains momentum and threatens to bring down Justin Trudeau and the Liberal government, word emerges of another potential scandal brewing in Quebec, this time involving Bombardier, another darling of la belle province. Bombardier and the Liberal’s have had ties for years, and they have been the beneficiary of many a government hand-out, so this really comes as no surprise.

In fact, that Quebec is rife with corruption comes as a surprise to nobody. It seems to be ingrained into the culture, at least politically, and it has been in the news in Canada for decades, with the ’76 Olympics in Montreal being perhaps the ultimate testament to corruption, with Olympic Stadium being the billion dollar center piece.

I’ve pored over the vast repository of information that is available to me, and have put together this brief look at politics and corruption in the province of Quebec.

First, the SNC Lavalin story.

The company at the center of the current political firestorm in Ottawa traces it’s roots back to 1911, when the appropriately named Arthur Surveyer founded the engineering firm Surveyer, Nenniger & Chenevert in Montreal (SNC). 25 years later engineers Jean-Paul Lalonde and Romeo Valois form the firm Lavalin, merging in 1991 to become SNC Lavalin.

SNC’s international experience dates back to 1963, while Lavalin began the massive James Bay hydroelectric dam project in 1974. The combined company would go on to acquire contracts for major projects around the globe in the 1990’s and by 2018, had claimed it’s place as the largest construction company in Canada. It had 50,000 employees worldwide, offices in 50 countries, and operations in more than 160.

Libya

By the year 2000, SNC Lavalin had been doing business in Libya for a number of years. One of their most important partners in Libya was Saadi Gadaffi. son of strongman Muammar Gadaffi, and the head of his father’s special forces. Saadi was typical of the sons of other despots in the region, more playboy than aspiring leader of a nation. Rather than focusing on much needed development projects for his country, he envisioned creating a “new Hong Kong” in Libya, and it became well known that when going to a meeting with Saadi, you brought cash.

In 2008, SNC Lavalin invited Saadi to move to Canada, who would go on to live in Montreal and Toronto. For Saadi, it was an opportunity to improve his english, as well as to network with political and business leaders, while learning the intricacies of doing business in North America.

SNCL would hire private security firm Garda to provide protection for their guest, and four contractors were hired for the job. It would be up to the security detail to pay for all of Saadi’s expenses, illicit and otherwise. These would in turn be invoiced back to SNCL, who would report the expenses as being related to business in Libya. Nearly $2 million in such expenses were reported, as has been revealed in the past week.

In early 2011, the Arab Spring had made its way to Libya, and SNCL projects across the country would come to a sudden halt amid the violence and political uncertainty. Saadi had managed to flee the country and in November of that year, Mexican authorities broke up a bid to smuggle him into the country. A consultant hired by SNCL and the VP/Controller were arrested and charged in Mexico. Saadi would make his way to Niger, where he received asylum, but was eventually extradited back to Libya to face murder charges, though a court acquitted him of the charges in 2018.

2012 would bring more bad news when, in February, two former SNCL executives were arrested in Canada in relation to alleged corruption at a project in Bangladesh that the World Bank was underwriting. The following month, CEO Pierre Duhaime resigned in disgrace after an internal audit revealed that $56 million in payments had been made to agents in contravention of the company’s policies.

In April, another former executive was arrested in Switzerland on corruption charges relating to a projects in North Africa, and in Canada, SNCL headquarters was the subject of an RCMP search relating to corruption involving high-ranking Tunisian officials between 2001 and 2010.

In November, Duhaime was arrested, when charges of fraud, conspiracy, and using forged documents, in relation to SNCL’s contract to build Montreal’s super-hospital, which it had won in 2010. SNCL’s bad year would end with December seeing accusations against another former executive, relating to the Bangladesh project.

Less than a week ago, on February 1st, Duhaime plead guilty to a single charge of breach of trust, avoiding jail time for what some have said is the biggest fraud in Canadian history.

In March of 2013, the Charbonneau Commission, tasked with examining corruption in Quebec’s construction industry, had been sitting for nearly two years. Yves Cadotte, VP of SNCL, would testify before the commission telling of collusion with other firms in order to secure contracts in Montreal, as well as details of illegal payments to political parties. In April, the World Bank and the Canadian International Development Agency (CIDA) barred SNCL from bidding on contracts for 10 years.

Organized Crime in Quebec

Justice France Charbonneau’s report was issued in November of 2015. After four years and at a cost of $40 million, the nearly 1,800 page report contains 60 recommendations. The commission would find that the prevalence of organized crime in Quebec, primarily in the form of the Italian mafia and the Hell’s Angels, played a major role in the corruption that was running rampant and unchecked in the construction industry.

Since forming in the early 1970’s under Nicolo Rizzuto, the crime family that bears his name has been operating out of Montreal. Prior to the 1970’s, corruption in Quebec doesn’t appear to have been more of a problem than it was anywhere else. But after the arrival and rise of the Rizzuto family in Quebec, things began to change drastically, as the mafia and the Hell’s Angels begin to exert their influence over Quebec’s labour unions.

Soon, they would control nearly every aspect of the industry, having influence over the awarding of lucrative contracts, and collecting concessions from unions, contractors, and suppliers. Stacks of cash were used to buy political influence, and violence and intimidation were used to keep everyone in line. Eventually, this would become the norm, and Quebec’s culture of corruption would become entrenched in society.

It seems particularly entrenched in Quebec politics, as politicians of all stripes and at all levels of government seem to behave as though that’s just the way things run. For the Liberal Party in Quebec, it is almost standard practice to engage in illegal shenanigans for political gains, to the point where they see themselves as entitled and above the law.

Alberta Tax Dollars in the Pockets of Mobsters

If this were strictly a Quebec or a Montreal problem, it wouldn’t even appear on the radar, but it isn’t. Over the years billions of dollars in tax revenue has left Alberta in the form of transfer payments, the majority going to Quebec. The likelihood that at least some of that money made its way into the hands of organized crime is great. The amount of Alberta money illegally circulated in Quebec over the years has to be in the billions of dollars.

It’s bad enough that we have to give it up in the first place, but to know that it is being used to improve the lot of criminals makes it even more infuriating. Thousands of Alberta families are suffering, with many on the brink of disaster. Countless lives have been forever turned upside down, and some have even been lost as a result of the economic crisis in Alberta.

The result of all of this is evident in the news stories and polls coming out of Alberta. More and more of us see separation as the only solution to a situation that has become untenable to the point that, eventually, people will begin to rise up and willingly break the law. In Quebec, it would seem as though crime actually does pay. Maybe we need to start thinking that way in Alberta as well, because if things keep going the way they are, it might the only choice we have left if we want to survive.

DBC

A HISTORY OF SNC-LAVALIN Woods, Allan . Toronto Star ; Toronto, Ont. [Toronto, Ont]25 May 2013: IN.3.