Construction boss says Tory operative urged him to throw political fundraiser

OTTAWA – The Montreal businessman in the middle of a brewing government contract scandal says a Conservative official suggested he throw a fundraiser for a local Tory riding association after his firm won a big government job.

Paul Sauve’s company, LM Sauve, won a $9-million contract in 2008 to renovate Parliament’s West Block. The Mounties are now looking into the circumstances under which Public Works awarded the deal.

Sauve says he hired Gilles Varin, a Tory-connected businessman, in early 2008 to help win the contract, eventually paying him $140,000. LM Sauve filed for bankruptcy in 2009 and lost the contract.

In January 2009 – months after his company got the contract – Sauve organized a fundraiser for the Conservative riding association in Bourassa, in the Montreal area.

Sauve told The Canadian Press he did so on the advice of Varin and the head of the Tory riding association in Bourassa, Gilles Prud’Homme.

"It’s this guy called Gilles Prud’Homme," Sauve said when asked who advised him to throw the fundraiser.

"So did Varin. Varin said, you know, it would be a wise move. I was kind of skeptical. I’m not too savvy about this stuff. I suppose I just winged it. Anyway, they have a hard time raising funds in Quebec, and so we did it."

Elections Canada lists Prud’Homme as the chief executive officer of the Conservative riding association in Bourassa.

An October 2009 news release also says he managed the campaign of Michelle Allaire, who ran against Liberal MP Denis Coderre in Bourassa in the last federal election.

A notice posted on a government website last week says the Conservative riding association in Bourassa failed to comply with parts of the Canada Elections Act and has been deregistered.

The association’s main telephone number is no longer in service. Prud’Homme didn’t return calls and an email. Varin also didn’t return a call.

A spokesman for the Conservative party didn’t respond to questions about Sauve’s claim that Prud’Homme’s advised him to throw the fundraiser.

Opposition MPs suggested the Tories took kickbacks for the West Block deal.

"We’re suggesting there is a kind of system where the people receiving some contract by the Conservative government have to give the money to the Conservative party," Bloc Quebecois MP Pierre Paquette said.

A spokesman for the Prime Minister’s Office bristled at the Bloc’s claim.

"We’re the party that brought in very strict rules to limit contributions to political parties to take the influence of big money out of politics," Andrew MacDougall said.

"Any suggestion that giving $500 or a $1,000 donation somehow gives a person special access to government contracts is completely absurd."

Meanwhile, The Canadian Press has learned Public Works fired an employee last year after an internal probe revealed he helped a construction company land a lucrative job on Parliament Hill.

The department says the worker’s "relationship with a private sector firm" led to "favouritism in awarding that firm contracts." The employee no longer works for the department, and Public Works says it is reviewing the company’s contracts "to ensure the Crown received value for money."

The Conservatives have been trying to distance themselves from the West Block affair.

Earlier this week, Natural Resources Minister Christian Paradis denied ever discussing the parliamentary renovation contract with Sauve during the Tory fundraiser.

"At no time was there any discussion about government business. It was strictly a fundraising event," Paradis told the House of Commons on Wednesday.

But a day later, Sauve said that the pair did discuss the contract at the fundraiser.

"The minister’s full of shit," Sauve told The Canadian Press. "He did speak to me about that contract. He congratulated me, actually."

Paradis – who was public works minister at the time of the fundraiser – said Friday he did nothing wrong by applauding Sauve’s successful landing of the $9-million deal.

"I can congratulate them. I can say good for you. But let’s be clear: in that case, like all other cases, I never discuss contracts with individuals."

Prime Minister Stephen Harper has insisted there’s no evidence of wrongdoing by the Conservatives, emphasizing that no members of his government are under investigation in the matter. And the party says Varin has never been a member or organizer for the current party.

However, there are strong links between Sauve, Varin and the Tories.

Sauve said Varin served as chief of staff to Marcel Masse, a cabinet minister in Brian Mulroney’s Progressive Conservative government.

And he said Varin was so well connected to the Conservatives that he knew Paradis was going to replace Michael Fortier as public works minister weeks before it happened in June 2008. That was around the time the department awarded LM Sauve the renovation contract.

Elections Canada records show that Sauve donated $1,100 on Jan. 26, 2009, to the Conservative riding association in Bourassa, and gave $1,000 to Tory candidate Hubert Pichet in La Pointe-de-l’Ile.

Sauve has also been linked to the Hells Angels biker gang. Last year, Quebec newspaper La Presse quoted him as saying he hired a known member of the Hells Angels’ Trois-Rivieres chapter to smooth out relations within Montreal’s construction industry.

And a report by the Financial Transactions and Reports Analysis Centre of Canada – the federal watchdog better known as Fintrac – said Sauve took on an alleged Hells Angels member as a business partner in 2006.

Varin has run afoul of lobbying laws before. He wasn’t registered as a lobbyist in 1993 when he approached several Conservative cabinet ministers to help secure a bailout for charter airline Nationair. The Mounties opted against investigating that matter.

In 1977, Varin was fined $6,000 after a Quebec Court convicted him on five counts of corruption and breach of trust for his role in several kickback schemes.

Varin was a long-time Tory supporter and he donated to the party as recently as Jan. 26, 2009, giving $500 to the Conservative riding association in Bourassa.

In November 2007, he gave $400 to the Tory riding association in Laurier-Sainte-Marie. He also gave money to Coderre when he was a cabinet minister in 2003.