Elaine Zakaib, the PQ minister for industrial policy, ran the multibillion-dollar FTQ investment fund’s regional arm for nine years.JACQUES BOISSINOT/The Canadian Press
A Parti Québécois minister who once ran a Quebec union investment fund admitted in a wiretap that her team routinely blocked investments in the competitors of Tony Accurso, the construction magnate facing a long list of corruption charges.
Élaine Zakaib, the Minister for Industrial Policy who was elected in 2012, was recorded in 2009 telling a top union boss that the regional arm of the Quebec Federation of Labour's Solidarity Fund, which she was running as chief executive officer, exclusively funnelled investments to Mr. Accurso in the regions surrounding Montreal.
The bombshell revelation Wednesday marked the first time a sitting PQ cabinet minister was implicated in possible wrongdoing at the Charbonneau commission. This week's testimony has established tight links between the union, gangsters, businessmen facing corruption charges, and the PQ. Mr. Accurso, who for decades lavished expensive yacht vacations on union bosses, has figured prominently.
The Liberals immediately called on Ms. Zakaib to step down, a demand she rejected. Ms. Zakaib said Wednesday evening she was recorded talking about the blocking of old files, a practice she stopped.
"As soon as I heard that the process of due diligence had been hijacked, I put an end to it," said Ms. Zakaib, adding that the blocking involved only three or four investment projects.
The public inquiry into corrupt practices in Quebec's construction industry spent much of the past two years on links between corrupt businessmen and Liberals. The shift this winter toward examining unions has suddenly drawn the PQ under scrutiny.
The revelation concerning a sitting cabinet minister emerged one day after union officials were heard on wiretap saying they could lean on Pauline Marois, then PQ leader, now premier, and her husband, the financier Claude Blanchet, to prevent the calling of a public inquiry. Ms. Marois denied the allegation Wednesday.
Ms. Zakaib said she didn't go to police when she discovered files were being blocked because she didn't believe it was illegal. Liberals argued that the minister's integrity is compromised and she should resign. "She knowingly participated in a system of collusion," said Liberal critic Lise Thériault.
On March 9, 2009, Michel Arsenault, then the head of the Quebec Federation of Labour, called Ms. Zakaib in a panic. The newspaper La Presse had published a report alleging the investment fund was handing out money only to projects involving Mr. Accurso – one of Quebec's biggest construction bosses who is facing a long list of criminal charges and has been alleged at the inquiry to have links to the mob. Mr. Arsenault wanted a list of companies that had received funds so he could counter the allegation.
"OK, but you know all of the projects near the Montreal region were blocked, right?" Ms. Zakaib said. "They were blocked because of competition with Accurso. I just want you to know."
Ms. Zakaib asked Mr. Arsenault to wait while she closed her office door, and rattled off regions part of Mr. Accurso's exclusive domain: Montérégie, Laval, Montreal east and west. "We'll certainly never want to make this public, you know," Ms. Zakaïb said. "The less I know, the better I feel."
At her news conference, Ms. Zakaïb said she simply didn't want to know about the turf war between union bosses that was taking place at the time.
Her explanation left unanswered questions: When did she become aware of favouritism toward Mr. Accurso, what exactly did she do about it, why did she insist on secrecy, and why didn't she mention to Mr. Arsenault that she put an end to it?
In the recording, Ms. Zakaïb said the instruction to block competitors came from Jean Lavallée, the long-time head of the FTQ-Construction union, who is testifying at the Charbonneau inquiry. Mr. Lavallée denied it: "I never blocked anyone."
On the wiretap, Mr. Arsenault offers something of an explanation for why Mr. Accurso might have been protected: He had delivered great returns, 15 to 20 per cent, on the FTQ fund's investments. "He's been an excellent partner," he said.