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Quebec wants real change from blacklisted by securities regulator

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(Globalpost/GlobalPost)

MONTREAL - The Quebec government says it won't be satisfied with cosmetic cleanup measures from firms that have been blacklisted by the province's securities regulator for implication in corruption scandals.

"Whoever thought that getting rid of one or two managers would be enough is wrong," Treasury Board president Stephane Bedard said. "There is a clear message being sent — clean house, do it well. Do it for today but also for the future."

The comments come after it was announced that Dessau Inc., one of the biggest engineering firms in Canada, has been denied access to public contracts for five years by the Autorite des marches financiers on advice of the province's police anti-corruption squad.

"Our goal is to correct the past," Bedard told a news conference. "It requires a culture change."

Shortly after it was elected last year, the new Parti Quebecois government brought in Bill 1, which requires companies to get a certificate to be eligible for public contracts. The process is managed by the Autorite.

Dessau is the sixth-largest engineering-construction firm in Canada and ranks among the top 60 firms worldwide.

Bedard says a company can appeal the decertification if it shows it is rehabilitating itself to the satisfaction of the Autorite.

"It doesn't have to be for five years," Bedard said.

Under the province's anti-corruption law, the provincial government has 60 days to overrule the decision.

Bedard says the provincial government will support any efforts by a company to set things right but will not be satisfied with cosmetic measures.

Among the required measures are getting rid of managers and directors who are at fault, ending fraudulent practices and installing strict controls.

The Autorite, working with the anti-corruption squad, will conduct a complete investigation of firms bidding for public contracts.

The first phase of the effort is to look at firms bidding or working on contracts that exceed $40 million. Those that do not measure up will be excluded until they meet the Autorite's standards.

The next step, likely in the fall, will be to verify companies involved in projects valued between $10 million and $40 million with the amount gradually decreasing until all companies doing business with the government are shown to be clean.

Bedard noted that blacklisted companies that have uncompleted work can apply for permission to finish the job if it submits at its own expense to strict control measures and monitoring by the Autorite.

Dessau, a major Quebec firm, and affiliate Verreault Construction will not be eligible for public contracts until June 19, 2018, although it can reapply to be eligible in 90 days.

It has said it plans to reapply sooner than that but warned some short-term layoffs would be necessary.

The Montreal-based firm, which has 5,000 employees, counts public works as a major part of its work.

Although he did not provide details, Bedard suggested Dessau may not have been quick enough in its rehabilitation efforts and they may not have been up to current expectations.

Dessau had recently made drastic moves to avoid such an AMF punishment.

Last week it announced the resignation of Jean-Pierre Sauriol as chief executive officer and president of the family-founded business.

It was his brother Rosaire Sauriol, a fellow company executive, who testified at Quebec's corruption inquiry about his participation in collusion and illegal political financing schemes.

Rosaire Sauriol told the Charbonneau Commission that his company donated $2 million through false-billing schemes alone, at the municipal and provincial level, between 2005 and 2010.

The benefits of being close to certain local politicians were spelled out at the inquiry. One chart produced at the probe showed how Dessau's contracts suddenly dried up, and other companies' skyrocketed, when there was a change in government in a municipality near Montreal.

http://www.globalpost.com/dispatch/news/the-canadian-press/130621/quebec-wants-real-change-blacklisted-securities-regulator