Contractor corroborates three per cent kickback fee
Published Monday, November 19, 2012 2:09PM EST
Last Updated Monday, November 19, 2012 10:20PM EST
MONTREAL - Michel Leclerc, the owner of Terramex construction, told the Charbonneau Commission Monday that his first encounter with bid rigging was when he was offered a $50,000 bribe to give up a contract in 1997.
Leclerc testified that he declined the offer made by Joe Borselino of Garnier Construction, adding that his refusal led to a bomb threat at his offices and soon after some of his equipment was vandalized or stolen.
Leclerc stated that Borselino returned a few months later to ask him not to bid on another contract, and told him he was not supposed to bid in Montreal.
Leclerc persisted and at one point was offered $50,000 to drop the contract, a deal which he refused.
Borselino even visited one of Leclerc’s colleagues in Rawdon during a children’s birthday party but Leclerc made a point of avoiding him.
Borselino eventually stopped pestering him after he turned a deaf ear on his requests, according to Leclerc.
Another contractor would eventually get through to Leclerc, however.
Nick Milioto of Mivela Construction, whose named had been cited several times previously in commission testimony, eventually persuaded Leclerc to share contracts.
Leclerc said that he had to pay Milioto a three per cent cut, “for politics.”
Terramex raised prices accordingly to compensate for the three per cent fee, which Leclerc said that he handed over to Milioto about 20 times.
Leclerc sought to win contracts in his hometown of Montreal, as he noted that companies from Laval and elsewhere were routinely winning contracts.
He said he faced closed groups of bidders who were winning all of the sewer contracts, another that won all of the paving contracts and another that controlled sidewalks.
“In the beginning they’re very nice, calm and convincing,” said Leclerc of the other contractors. “But if you resisted, they made your realize that it’s for the good of you the company that you take them seriously.”
Leclerc was finally caught by Revenue Canadafor failure to pay his taxes.
Many in the construction industry rely on a fake invoice scheme, obtaining phony invoices from front companies that don't do any work.
The scheme allows contractors to obtain extra funds by cheating Revenue Canada.
Convicted of tax fraud, Leclerc lost his right to bid on public contracts, essentially putting his business in the red.
He returns to the stand Tuesday.
The nervous-looking Leclerc was granted the right to have his picture and voice repressed from media reports due to health reasons.
Desjardins subpoena debated
Earlier Monday, lawyer Marc Labelle tried to persuade Judge Charbonneau to quash the subpoena for his client Raynald Desjardins to testify before the commission.
Labelle argued that the testimony could influence a future jury for his client, who is facing first-degree murder charges.
Judge France Charbonneau promised to take the request under advisement.
-With a file from The Canadian Press