Liberal Party Fundraisers Accused of Real Estate Fraud

Quebec Liberal Party (QLP) fundraisers are under heat from UPAQ, the province’s anti-corruption squad. An investigative report from Enquête, a CBC-Radio Quebec show, revealed allegations of fraud. At the centre of the controversy is the Société Immobilière du Québec (SIQ), QLP fundraisers, and offshore transactions.

The issue came up in 2007, when Swiss authorities alerted Quebec law enforcement. Just to let them know they found suspicious money moving between European banks. In 2011, UPAC began investigating the money in detail. They allege this is the largest instance of real estate fraud involving Canadian government assets in history.

The SIQ

The SIQ is the provincial agency that oversees government office space in Quebec. They manage office space for all other provincial agencies, except education and healthcare. Typically, they deal with leases 10 years or less in length. In 2004 and 2006 however, they made much longer deals. These deals were followed by large transfers of cash offshore.

In 2004, documents obtained by Enquête show a 17 year lease for a massive building in Quebec City. Shortly after, the company that manages the building wired $1.25 million from an account in  Liechtenstein. That money wound up in Switzerland, and was then transferred to four bank accounts in the Bahamas.

There, it wound up in the bank accounts in the names of William Bartlett, Charles Rondeau, Franco Fava, and Marc-André Fortier. The transfers were for $450k, $250k, $200k, and $100k respectively. Note we said in the names of, because Fortier denies he has an account in the Bahamas. I’m sure it’s just a coincidence that the four bank accounts were in the names of four people involved in the deal. Total. Coincidence.

In 2006, the SIQ leased two buildings for 20 and 25 years lengths. They paid $2.1 million to a “real estate consultant”. The money was transferred to Belgium, before going to Switzerland. $902k then continued on to an account in the name of Bartlett. From there, three bank drafts were made to Fortier, Rondeau, and Fava. The draft for Fortier was for $170k, while the other two were for $100k.

Quebec Government Buildings For Sale

In 2007, the Quebec government sold three buildings to pay down debt. Those places were Place Québec, J.A. Tardif, and 500 René-Lévesque Boulevard Ouest. The first building was sold to a real estate consortium led by Quebec Labour Federation (FTQ). That’s right, the same FTQ that had links to the Hells Angels and the Mob. The last two buildings were sold to a company owned by real estate tycoon George Gantcheff.

According to a report obtained by Enquête, $47 million of concessions was missing from the original tender for those buildings. There was also an odd part of the contract where the government agreed to pay for all repairs for the next 20 years. Wouldn’t that be sweet if you purchased a house and could call up the old owner, 20 years later, to replace a furnace? If it seems odd, it is. The government paid $13 million to Gantcheff to get rid of that clause of the agreement. FTQ is still holding out.

If that wasn’t weird enough, former SIQ vice-president Bartlett was hired to “help negotiate”. Enquête alleges Austrian bank emails indicate that he was expecting $7 million from Gantcheff. Sweet payday. You can get roughly 19,000 hours worth of legal fees with that kind of money.

Liberal Connections

Unless you have a hard on for politics, you’ve probably never heard of these guys. Despite keeping a low profile, they’re powerful and politically connected. Recently they’ve become household names in Quebec, and not for the right reason.

William Bartlett

William Bartlett was the vice-president of finance and rental at the SIQ from 1988 – 1995. He was dismissed that year, and criticized by the Auditor General for at least 10 transactions.

He was previously a president of the Quebec Liberal Party, and a fundraiser. He was also part of the campaign team for the Jean-Talon riding in 2007.

Charles Rondeau

Charles Rondeau is an influential figure in Quebec. He brings in buttloads of donations for the QLP. In 2010, an inquiry conducted by former Supreme Court justice Michele Bastarache looked into accusations of Rondeau trying to influence judicial appointments. He was cleared of the allegations. Apparently he just visited the office of the person responsible for appointing judges 14 times between August 2003 and February 2004. During the inquiry, we learned he and Franco Fava bring in around $1.5 million annually for the QLP.

Franco Fava

Franco Fava was a relatively unknown financier of the Quebec Liberal Party. That is, until former Justice Minister Marc Bellemare made public allegations of “influence peddling”. Bellemare claims he attempted to influence the former minister on judicial appointments in 2003.

Fava has been financing the QLP in Eastern Quebec for over 25 years. He holds an annual fundraising campaign that hauls in $300k or more per year for the QLP. In 2010, he said he raises $200-400k/year, and “is in full compliance with the law. Cool…who said you weren’t though?

Marc-André Fortier

Marc-André Fortier served as the SIQ CEO from 2003 – 2008. He was forced to resign amid a scandal when an Auditor General report questioned his expenses. At a hearing, he stated he was appointed to represent people involved with the Quebec Liberal Party. He was ordered to repay $75,000 in expenses.

No Charges Yet

Sounds clear cut, right? These are just allegations. Crafted by a number of police agencies, anti-corruption investigators, and months of investigative work from Enquête – but still allegations. At this time, the case is in the Crown’s hand, and they’re reviewing whether to press charges. Even if they do find they’re at fault, they still have to prove criminal intent.

Although, the whole scenario makes you wonder why the government of Canada is opposed to cracking down on corruption, and the use of tax havens.

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Photo by Paul VanDerWerf