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Quebec corruption probe investigating labour federation kick-back scheme: report

Union Leaders Michel Arsenault, FTQ, flanked by Rejean Parent, left, CSQ, and Claudette Carbonneau, CSN, stand with other union leaders in a coalition called Alliance Sociale Friday, November 5, 2010 in Quebec City. The alliance claims to be a response to the Reseau Liberte Quebec.

Jacques Boissinot/The Canadian Press/Jacques Boissinot/The Canadian Press

The probe into corruption in the construction industry is investigating an alleged kick-back and bribery scheme involving the Quebec Federation of Labour's Solidarity Fund, according to a news story in the Montreal daily Le Devoir.

Investigators with the Commission Charbonneau, which was created last November by Jean Charest's Liberal government, recently met with some of the directors of the QFL Solidarity Fund to "shed light on certain facts" a spokesperson for the inquiry told the newspaper.

If needed the information will "in due time" be made public during the proceedings when the Commission resumes hearings next month.

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According to the news report, the commission was examining allegations involving senior members of the QFL-Construction unions were acting as intermediaries for entrepreneurs seeking financial backing for their projects.

Those acting as a go-between for the entrepreneurs, some with apparent ties to organized crime-were, were allegedly being generously rewarded in their bid to obtain quick approval by the Solidarity Fund managers for various investment projects.

Two years ago a Radio-Canada reported that three entrepreneurs seeking to do business with the Fond de Solidarité were asked to pay a bribe to an intermediary if they wanted their financial request to be examined by the Fund's board of directors.

"There are a lot on inaccuracies that have reported about the Solidairy Fund over the last few years," Patrick McQuilken, a spokesperson for the Fund told Le Devoir. "Like all financial institutions, the Solidarity Fund is subject to infiltration attempts by organized crime but we have in place the mechanisms and measures to protect against it."

The fund has net assets of $8.5-billion built on the savings of Quebecers invested partly through the Registered Retirement Savings Program. Considered one of the jewels of the Quebec economy, the fund has been mired in controversy lately involving police investigations into alleged ties between QFL-Construction union leader and members of organized crime. Police have pointed to attempts by members of the mafia to infiltrate the fund.

In 2009 police conducted a raid at the offices of the Solidarity Fund as part of an investigation into money laundering operations that involved the construction industry. More recently the president of the QFL Michel Arsenault has had to explain his close ties with Tony Accurso this week who was arrested for the second time this year on charges of fraud, conspiracy and other charges related to an alleged $3-million tax evasion scheme.

The QFL has often been a close supporter of the PQ but party leader Pauline Marois was now trying to keep her distance during the current election campaign.

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"I never asked the support of any unions and I won't ask them for it either," Ms. Marois said categorically.

She expressed full confidence in the Charbonneau Commission to pursue their investigations and get to the bottom of the alleged kick-back scheme.

Ms. Marois' husband Claude Blanchet was once the CEO of the QFL Solidarity Fund. And so was current Finance Minister Raymond Bachand. The QFL has maintained close ties with the PQ several QFL-Construction union leaders are regular contributors to the Liberal party.

All of this has opened the door for François Legault, leader of the Coalition Avenir Quebec party to accuse the PQ and the Liberals to being nothing more than pawns of big business and special interest groups as part of his crusade against corruption, the central theme of his campaign for the Sept.4 vote.

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About the Author
Quebec City political correspondent

Rhéal Séguin is a journalist and political scientist. Born and educated in southern Ontario, he completed his undergraduate degree in political science at York University and a master's degree in political science at the Université du Québec à Montréal.Rhéal has practised journalism since 1978, first with Radio-Canada in radio and television and then with CBC Radio. More

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