OTTAWA - The Harper government risks being sucked into a political scandal raging in Quebec with the revelation that a top Conservative organizer and senator had ties to key players.
The Canadian Press has learned that Tory Senator Leo Housakos worked politically with now-disgraced Montreal politician Benoit Labonte from about August 2008 to February 2009.
Labonte has alleged that there was an elaborate kick-back scheme to finance Montreal municipal political parties. He insists he never did anything illegal, but acknowledged he made ethical lapses while in city politics.
There is no suggestion Housakos knew of any wrongdoing, but he has now been linked to Labonte and controversial construction magnate Tony Accurso.
Labonte, formerly the leader of the Vision Montreal party, lobbed a grenade into the province's political class last week when he admitted to having met and telephoned Accurso, whom he said donated to his leadership campaign
Accurso's companies have been highlighted in media investigations of bid-rigging in the province's construction industry. Quebec Premier Jean Charest has announced a special investigation into the allegations of collusion.
The revelations have dominated the news in Quebec, and have spurred demands for a public inquiry. Charest has been drawn in, refuting Labonte's allegations that three of his ministers were also associating with Accurso.
A source who worked within Vision Montreal said Housakos visited the party's offices several times. Soon after he and Labonte agreed to work together, Housakos' close friend Giulio Maturi became Vision Montreal's executive director.
"Leo had come to the headquarters and had several meetings with Labonte," said the source. "That's well known."
Maturi and Labonte had a parting of the ways in March. Maturi went on to work for the Conservative party in Montreal until recently.
Housakos did not return several calls from The Canadian Press, but he told the online news website Rue Frontenac this month that he had offered to help Labonte. Housakos insisted he did not do fundraising work.
He also acknowledged he was casually acquainted with Accurso.
"Yes, I know him," Housakos said. "I have met him a few times. He's a very big businessman."
Labonte told Radio-Canada last week that it was Accurso who introduced him to Housakos.
"Mr. Accurso referred me to Mr. Housakos who I didn't know, and the next day, I met Leo Housakos," Labonte said, in comments that briefly appeared on Radio-Canada's website last week.
Housakos was also head of the Action Democratique du Quebec's fundraising arm. Former ADQ Leader Mario Dumont said over the weekend that he too had met with Accurso, who was a supporter of the party.
A fundraising reception for the ADQ in 2007 was held at one of Accurso's properties in Laval, Que.
"Accurso, the engineering firms, the construction firms, etc., all the politicians know them," Dumont told the Journal de Montreal. "They're the ones who build in Quebec, they're the ones who build Quebec."
Last April, Revenue Canada raided the offices of Accurso's companies in connection with an investigation into $4.5 million in alleged tax fraud.
One of those companies, Simard-Beaudry Construction, was part of a consortium awarded a $355-million contract to install water meters in Montreal. That contract was cancelled after a damning auditor general's report on the bidding process and awarding of the contract. Several senior Montreal municipal officials were reportedly vacationing on Accurso's yacht while that process was in play.
Accurso did not return calls. He is suing Radio-Canada for sullying his reputation and breaching his right to privacy.
Radio-Canada's Enquete program reported this month that 80 per cent of Montreal road projects were controlled by a "fabulous 14" construction companies, including Accurso's. Sources they quoted said the Mafia were also involved in the collusion.
Labonte referred to "white-collar" Mafia that had influenced Montreal city hall. Labonte was forced to resign from Vision Montreal, after his meetings with Accurso came to light.
The potential relationship between Housakos and Accurso came up in the Commons Monday.
"Does the prime minister also benefit from the vast network of friends put together by Mr. Housakos and Mr. Soudas," asked Liberal MP Marcel Proulx.
Dimitri Soudas, a senior aide to Harper, is a longtime friend of Housakos.
The controversy surrounding Labonte has seriously hurt new Vision Montreal leader Louise Harel as she tries to unseat Mayor Gerald Tremblay next Monday, himself dealing with contracting scandals in Montreal.
Tremblay told Le Devoir newspaper last week that he knows a certain number of businessmen share construction contracts in Montreal, but that he's scared for his family to point fingers at specific figures without proof.
The Senate Ethics Officer is currently studying whether Housakos breached any articles of the Senate Conflict of Interest Code. Housakos worked for a Montreal engineering firm that won a $1.4 million contract as part of consortium studying the Champlain Bridge.
Housakos was the lead organizer of a major Conservative fundraiser in Montreal where four executives from the winning consortium and two officials from the federal bridge agency were also on hand.
Housakos and company BPR have maintained that he worked for the firm's wholly owned subsidiary, and had no knowledge or involvement in the federal contract.
This week, the senator said he suspects a member of his own caucus is trying to undermine him, and he will "take care of him soon."
