Quebec's special anti-corruption police made seven arrests Thursday in a probe into illegal political party financing, arresting two top former provincial Liberals, former deputy premier Nathalie Normandeau and Marc-Yvan Côté, a long-time party organizer and former senior cabinet minister.
Two political aides in the Parti Québécois were also arrested.
Police said the arrests came after they amalgamated two separate investigations, Project Joug and Project Lierre, that looked into illicit fundraising.
"We merged the two investigations to show the systemic nature of these schemes," said Inspector André Boulanger, head of investigations at the permanent anti-corruption squad known as UPAC.
All seven accused have connections to an engineering firm headquarted in Quebec City, Roche, which has since changed its name to Norda Stelo.
According to testimony before the Charbonneau inquiry into the construction industry, Roche organized numerous political fundraisers and put up employees as straw-men donors – people who would make individual political donations and then be illegally reimbursed by the company.
"The engineering firm had a business development approach that was rather aggressive," Insp. Boulanger said.
"They approached influential people in government, used straw men for political financing, then there was a return on that investment, for years, they got financial gains."
The 13 criminal counts filed Thursday include conspiracy, bribery of a member of the legislature, fraud on government, breach of trust and forgery.
Police didn't provide details but Ms. Normandeau had been named in previously-released court documents showing that investigators were probing her role in the way a subsidy was granted to a water-treatment plant that was designed by Roche.
Mr. Côté, had retired from politics at the time of the allegations and was a Roche vice-president and consultant.
The others charged are:
- Bruno Lortie, Ms. Normandeau’s former chief of staff.
- France Michaud, a former Roche executive who had already been found guilty last fall on separate fraud and breach of trust charges in connection with the water-treatment facility project in Boisbriand, north of Montreal.
- Mario Martel, another Roche executive.
- Two other accused had ties to the PQ but are not major party figures. They are:
- Ernest Murray, a political staffer in former Parti Québécois leader Pauline Marois’s riding. The Charbonneau Commission heard testimony that he solicited illegal political contributions from Roche to meet party funding targets.
- François Roussy, a former mayor of the town of Gaspé who later was a political attaché for PQ MNA Gaétan Lelièvre. The inquiry heard that in a bid to get contracts with Gaspé, Roche paid him a trip to France.
The seven are expected to appear in court in Quebec City on April 20.
Meeting reporters, Robert Lafrenière, head of UPAC, made a point of thanking FINTRAC, Canada's financial intelligence unit, which monitors suspicious transactions.
"These charges are serious. Not only are they against the law, they threaten the foundations of democracy," he said.
The arrests came on the day of the Quebec provincial budget. They were also announced four days after UPAC filed 67 separate charges against Roche for alleged fiscal fraud.
Some of the background to the investigation on Ms. Normandeau was outlined in an application to conduct a search warrant at the Liberal Party headquarters on July 9, 2013. The application was unsealed in April 2014 at the request of Radio-Canada and other media outlets.
In the 30-page document, investigators allege that, in return for political donations, Ms. Normandeau overruled officials in the Municipal Affairs department in 2007 and authorized an $11-million subsidy for a water-treatment plant in the city of Boisbriand.
Evidence collected by investigators "tends to demonstrate a political intervention took place in awarding the subsidy to overhaul the water treatment plant in Boisbriand," said an affidavit filed by investigators.
"The awarding of this subsidy is the result of sustained political financing since 2005 and the exercise of politician influence from various players close to minister Nathalie Normandeau and the Quebec Liberal Party."
At the time, Ms. Normandeau had denied any wrongdoings. "I always did my job with integrity, rigour and honesty," she said in a statement.
News of the arrests knocked the wind out of Liberal government members as they filed into their regular caucus meeting Thursday. A block away, Finance Minister Carlos Leitao headed into a conference centre to brief reporters on what is expected to be a moderately good-news budget with no deficit, modest tax relief and a boost to education spending. The budget fell instantly from the top of the province's news agenda.
Even the opposition avoided commenting on the breaking story, but Premier Philippe Couillard said the arrests are proof that there is no political interference in corruption investigations. He also carefully distanced his government from the previous Liberal version under Jean Charest, pointing out party financing rules have tightened considerably.
"This doesn't speak to the party I run now. It speaks to a different time, a different context," Mr. Couillard said. "But I don't minimize this morning's events. UPAC has done its job."
With a file from Andre Picard
Editor's note: An earlier digital version of this story incorrectly spelled Finance Minister Carlos Leitao's surname. This version has been corrected.