Thursday, August 19, 2010

What's with Montreal? Corruption in Municipal Government?

Montreal earmarks $10M to fight municipal corruption
Part of city's $4.298-billion budget
By Linda Gyulai, Gazette Civic Affairs Reporter
May 27, 2010
MONTREAL – The city of Montreal is about to launch a hiring and training drive to counter municipal corruption.
The $4.298-billion Montreal budget tabled by Mayor Gérald Tremblay on Wednesday includes $10 million to "strengthen" the municipal civil service.
The funds, to be split by the city and the island council that manages common services for Montreal and the 15 demerged suburbs, will go toward hiring and training personnel in departments where the city doesn't have enough eyeballs or expertise to monitor spending, the quality of work by outside firms and prevent collusion in contract bidding, the city's budget director, Jean-François Leclaire, told The Gazette yesterday.
City manager Louis Roquet is examining what personnel and training are needed and in what departments, Leclaire said. Vulnerable areas include the city's finance, purchasing, legal, computer-systems departments and in project-management and urban planning.
The $10 million is being split by the city and the island council because the targeted departments do about an equal share of work for both, Leclaire said.
Tremblay and Roquet are expected to announce the details of the hiring and training program in a few weeks.
Tremblay alluded to the initiative at his budget presentation on Wednesday. The mayor said he wants to turn Montreal into "a model city when it comes to contract awarding, ethics and the management of major projects."
The city is planning to tighten tendering rules and to set up a city council panel to review all contract bids, Tremblay said on Wednesday.
Last fall's municipal election campaign was rife with allegations of widespread collusion in municipal construction contracts, which a Radio-Canada report revealed has left Montreal-area municipalities paying as much as 40 per cent more for work than other cities in Canada.
The city has started to require contract bidders to sign a form pledging to refrain from contacting civil servants and politicians during the tendering process, Leclaire said. The city will cancel the bidding process and start again if the clause is violated. The city will have grounds to cancel the contract if the violation comes to light after it was already awarded.
The moves are fallout from city auditor-general Jacques Bergeron's devastating report in September on the awarding of the city's $355.8-million water-management contract, which led to its cancellation.
Bergeron was critical of the city administration's decision to hire an outside engineering consulting firm to manage the contract-tendering process and manage the project for the city. The city, he concluded, relies too heavily on outside contractors.
City hiring hasn't kept pace with its increased investment in infrastructure work over the past 20 years, Leclaire said.
"It puts us in a vulnerable position," he said.
The city also lacks personnel to compare bids with the price of work performed in other cities, Leclaire said.
The city also wants to invest in training, such as how to write contract specifications in a way that ensures adequate competition, he said.
"For me, the $10 million isn't an additional expense," Leclaire said. "These additional resources should bring about a decrease in costs through better project management and a better control over prices and bids."
Montreal goes from glamorous to a corrupt, crumbling, mob-ridden disgrace
by Martin Patriquin
December 26, 2009
MACLEAN’S – It says something about a city when tales of bravery in the face of organized crime are apparently a prerequisite to governing it. Five weeks into an increasingly bizarre election campaign dominated by scandal, graft and good, old-fashioned backstabbing, Gérald Tremblay had wanted it known that he is scared for the well-being of his family.
While other Canadian cities grapple with garbage collection, snow removal and other humdrum realities of municipal politics, Montreal has, in the past several weeks, become a chaotic and dirty throwback to its bad old days. Allegations of mobbed-up favouritism, brown envelopes stuffed with cash, wildly inflated city contracts, an aggressive blue-collar union perpetually at odds with the mayor’s office: these, not its many charms and joie de vivre, are Montreal’s stock in trade these days.
Montreal has become a chronically underperforming city burdened by an archaic governmental structure, a bloated public sector (Montreal’s city council has twice as many elected officials as New York City), and what many say is an endemic culture of corruption. More and more of its citizens are taking refuge in the suburbs, while big business continues to flee for Toronto, Vancouver and Calgary. Montreal is saddled with the largest debt of any major Canadian city, and its infrastructure is a leaking, potholed mess. It costs 30 per cent more to build a stretch of road in Quebec than anywhere else in the country, and a recent multi-million-dollar water contract was cancelled after its cost ballooned from $154 million to nearly $356 million.
The city’s political culture, one of its disgraced former politicians said recently, is hopelessly, institutionally crooked, “infected with gangrene.” Meanwhile, the province’s language hawks are yet again glancing sideways at the supposed creeping English presence among the city’s immigrant populations. The parade of bad news afflicting what a La Presse columnist once dubbed “a beautifully messy Latin city” has raised the question: how could something so beautiful go so wrong?
Montreal’s political and social landscape didn’t look nearly as grim eight years ago, when Gérald Tremblay rode into office with a promise to bring democracy and transparency to Canada’s second largest city. A former perfumer, hockey agent and provincial cabinet minister in Robert Bourassa’s Liberal government, Tremblay has cultivated the image of a squeaky-clean (if somewhat bland) politician whose idea of excitement, until his knee surgery three years ago, was a nice, long run through his neighbourhood of Outremont.
And Montreal welcomed him, in large part because he was so beige. The city has long been considered Quebec’s existential nightmare, “the rottenest city on the continent,” according to religious pamphleteer Evanston Hart in 1919, a place where every vice and threat—games of chance, naked flesh, the lion’s share of English people in the province—could be experienced in abundance. Though the city has since been rehabilitated somewhat, its reputation for secretive, top-down governance à la Jean Drapeau (who took power in the 1950s and ruled for nearly three decades) remained, all the way to Tremblay’s predecessor, Pierre Bourque. In his first two years in office beginning in 1994, Bourque’s party pleaded guilty to 122 counts of electoral and campaign finance charges. “Ever since Drapeau, Montreal mayors have had the tendency to last a couple of terms and then get into trouble,” says Harold Chorney, a professor of public policy at Concordia University in Montreal.
For years, it seemed Tremblay would buck the trend, thanks to Montrealers’ yawning indifference to municipal matters: barely 35 per cent of voters bothered to cast a ballot in the 2005 election. Whiffs of scandal—the city’s real estate corporation, run by Tremblay’s former chief of staff, was found to have made a sweetheart land deal to a well-connected developer—bounced off the mayor, as did the news that the city’s consultant and outsourcing budget had nearly doubled over six years.
Tremblay managed to withstand the revelation last April that Frank Zampino, his former right-hand man on the city’s powerful executive committee, had twice vacationed on the yacht of Tony Accurso, whose firm was ultimately awarded a $356-million water- meter contract without any debate in city council. “Frank Zampino didn’t make the best decision,” the mayor said of his lieutenant’s choice of vacation. The mayor nonetheless defended the water-meter contract, only to cancel it when an auditor general’s report said it was rife with “irregularities [and] deficient management.”
The first truly devastating bombshell came a few months ago, shaking Montrealers of their indifference: a Radio-Canada investigation into the province’s construction sector uncovered a wide-ranging price-fixing scheme in which 14 construction companies colluded to fix bids on public construction jobs, and in some cases used Hells Angels muscle to intimidate rival firms. One of these contracts included the refinishing of the facade of Montreal’s city hall, though most were for road construction and repair in and around Montreal.
These firms, the investigation alleged, would typically pay three per cent of the value of the public works contracts to what one former Transport Quebec official dubbed “the Montreal Italian Mafia.” Coincidentally or not, an ensuing La Presse investigation found that a former Union Montreal fundraising official named Bernard Trépanier was in charge of a scheme that saw three per cent of the value of contracts distributed to political parties, councillors and city bureaucrats. (Mr. Trépanier, dubbed “Mr. Three Per Cent” by La Presse, denied involvement in the scheme.)
Furthermore, La Presse noted, 16 of the 272 firms who worked for the City of Montreal since 2005 received nearly half the city contracts. The overwhelming majority of them went to . . . Tony Accurso, the yacht-owning friend of Zampino, and a politically connected businessman who has extensive construction interests in both Quebec and Ontario. Accurso also had business ties to Claude Blanchet, husband of Parti Québécois Leader Pauline Marois. In 2007, Accurso allegedly picked up the $14,000 tab for an Action Démocratique du Québec fundraising dinner held at Accurso’s restaurant. Zampino himself left city politics to work for Dessau, which was part of the consortium* with an Accurso-owned company that was awarded Montreal’s water meter contract, in January 2009 (though he left the position three months later).
“Tremblay is either crooked, incompetent or just lacks the courage to attack difficult problems,” says John Gomery, he of the Gomery commission on the sponsorship scandal, who now serves as honorary chairman of Bergeron’s Projet Montréal.
But Tremblay’s party certainly hasn’t had a monopoly on scandal. Louise Harel promised to clean up city hall “with a broom”—en français, bien sûr, given her triumphant inability to speak English. She chose as her running mate Benoît Labonté, who kindly stepped aside as leader of her party, with a promise from Harel that he would become president of the city’s powerful executive committee if she was elected. Armed with near-instant favourable polls, Harel depicted Tremblay as dithering, clueless and willingly blind to the corruption going on under his nose. She called Labonté, a borough mayor, formerly with Tremblay’s Union Montréal banner, “a man of principle” who left Tremblay’s side because he couldn’t stand the stench.
The Harel-Labonté juggernaut (such as it was) lasted four months—until a journalist for the online newspaper Rue Frontenac found that Labonté himself had met with and solicited money from none other than Tony Accurso on several occasions in 2008. Labonté peppered his subsequent, vehement denials with threats of lawsuits against Frontenac. By way of her Twitter feed, Harel denounced the “false accusations.” Her indignation lasted all of 24 hours, however; the next day, Labonté was fired.
Labonté soon found himself in a nondescript hotel room in front of Radio-Canada’s cameras, wearing what might be described as post-catastrophe casual, admitting to everything he’d denied over the last week. Yes, he’d lied. Yes, he’d met with Accurso several times. Yes, people close to him accepted cash from Accurso on his behalf. Moreover, Labonté said, there is corruption of this sort at every level of government—even in Harel’s Union Montréal party, where “sectoral finance” was code for soliciting campaign donations from big business, illegal under Quebec law. “The reality is that every party, municipal as well as provincial, and there are no exceptions, collects cash and gives it to front men, who then write a cheque to the party in question,” Labonté said.
Put off but undeterred, Harel stashed away her broom. She would need nothing short of a vacuum to clean up this mess, she said.
That’s an understatement. Even beyond all the corruption, Montreal has become unruly and dysfunctional. It’s perhaps easy to see why it’s so difficult to get things done when you consider the city has four levels of municipal government and 105 elected representatives—by comparison, Toronto has 45; New York City, 51. It’s also saddled with one of the largest public sectors of any North American city. Tremblay put this system in place to keep several recently (and forcibly) merged boroughs from separating. It didn’t even succeed in that aim; in 2005, 15 mostly English boroughs voted to leave the amalgamated city. Result: these boroughs pay taxes to the city of Montreal, yet their citizens cannot vote in the municipal election. It also means these boroughs have become de facto fiefdoms that regularly stymie island-wide projects like expanded rail service and highway access. The city’s governing structure is “a Swiss-cheese mess,” says Concordia’s Chorney.
Maybe it’s why so many people and so many businesses continue to leave. According to a recent Quebec government report, 21,000 Montrealers decamped for off-island suburbs between 2007 and 2008—a bigger exile, percentage-wise, than from Quebec’s desolate, perpetually destitute North Shore, and the sixth year in a row that the city lost more than 20,000 people. Head offices, too: Montreal, according to a recent Fraser Institute report, continues to lose them to other parts of the country—even though the threat of separatism, Montreal’s eternal albatross, has been practically non-existent for some time. People who remain, according to statistics, are less likely to finish school (the city has a 45 per cent dropout rate), more likely to be unemployed, less likely to get a physician, and more likely to become pregnant at a younger age than anywhere else in the province. And the usual tussles over multiculturalism continue. Former Péquiste premier Bernard Landry, decrying the fact that immigrants and anglophone students now outnumber their old-stock French counterparts in Montreal-area schools, recently called for the provincial government to modify Bill 101 so as to restrict access to English colleges, known as CEGEPs, for recent immigrants. Old ghosts, it seems, die hard.
The man who wants desperately to hang on to all of this is still standing—shaking in his boots, maybe, but standing nonetheless. At one moment, Mayor Tremblay denies knowing anything about payoffs, price fixing or mob connections within city hall; the next, he says he is scared for the well-being of his loved ones because he has stood up to these very influences in the past. He has even brought his non-denial-denial shtick to the airwaves. “One of your colleagues at work decides to do something a little shady,” Tremblay says in one radio advert. “Do you think they’re going to tell their boss or you? Face it: they’re not going to tell anybody.”
His dithering might be serving him well for now. The Gazette, whose journalists broke several key stories about spending irregularities within Tremblay’s government over the years, endorsed the outgoing mayor regardless. “[T]he least distressing candidate in an unprepossessing field,” read an editorial earlier this week. Tremblay also has boots on the ground: come election day, Union Montréal has the (unofficial) use of the Quebec Liberal party’s formidable vote-getting machine, the very same one that has helped deliver three successful elections for Premier Jean Charest. Internal Union Montréal polls suggest Tremblay will likely squeak back into office, albeit by a greatly reduced margin. “They’re taking advantage of the fact that [Montrealers] have been asleep,” says former Montreal police chief and one-time mayoral candidate, Jacques Duchesneau.
Calls for inquiry into Montreal corruption allegations News Staff
Date: Fri. Oct. 23 2009
Politicians are calling for a public inquiry after accusations that Montreal city hall is "gangrenous" with corruption.
Mayoral candidate Louise Harel said Friday that Quebec Premier Jean Charest should launch an inquiry into allegations of corruption and collusion between city hall and the construction industry ahead of the city's Nov. 1 civic election
"Only a public inquiry will guarantee the future by identifying the actions necessary to dismantle the collusion system that surrounds municipal contracts," Harel said in a statement.
In an interview with a French-language TV network Thursday, former city councillor Benoit Labonte said the city is "rotten," "gangrenous" and riddled with mob corruption.
There have been reports that companies linked to organized crime are tied to municipal politics, and essentially created a construction cartel that drives up the cost of building projects in the Montreal area.
Montreal municipal politicians belong to political parties like Harel's Vision Montreal and Mayor Gerald Tremblay's Union Montreal.
Labonte says he told Tremblay that people who raised money for the mayor's political party were involved.
Tremblay dismissed Labonte's claims as hearsay and rumours.
"That financing is not in my political party," Tremblay said in an interview with CTV Montreal Friday.
"When he (Labonte) left our political party in 2007 why didn't he talk about it? Why didn't he go see the police if he had facts?" he said.
Tremblay has acknowledged that Labonte did confront him about kickback allegations, but said these were groundless.
"Everything we've done for the past eight years has been verified by the director general of the election, and there's no foundation whatsoever in what we're hearing today as for as political contributions that do not respect the legislation," Tremblay said.
In a news conference Friday, federal Justice Minister Rob Nicholson said Ottawa will not get involved.
"My understanding is that the province of Quebec has launched an investigation, and we have complete confidence in that," he said.
Charest has dubbed the investigation "Operation Hammer." The team will include S�ret� du Quebec police, prosecutors and RCMP who specialize in investigating organized crime.
The province has also moved to introduce new rules requiring contracts over $25,000 be accompanied by a document proving the contractor's finances are in order.
"I am in agreement to an overall investigation," Tremblay told CTV Montreal.
"Let's clean it up as soon as possible and start talking about the fundamental issues for the future."
Labonte was forced to resign over allegations he received donations from construction companies when he sought the leadership of the Vision Montreal party last year.
-With files from CTV Montreal and The Canadian Press