Government Fraud and Corruption: Ex-Mayor and Engineer Convicted in Major Municipal Corruption Case in Quebec
September 23, 2015
On September 15, 2015, the Court of Québec rendered a judgment in which it found a former mayor and a vice-president of an engineering firm guilty of several criminal offences relating to municipal corruption. These convictions are a significant achievement for UPAC, the Quebec government anti-corruption unit, created in 2011. After judgment was rendered, the Quebec prosecutor announced that there will be other criminal charges relating to similar corruption schemes in Quebec. Meanwhile, UPAC remains active in investigating alleged corruption and collusion in Quebec, having executed several search warrants and made numerous arrests in the past months.
The first accused, Robert Poirier, was the mayor of Boisbriand, Quebec, between 1998 and 2005. The second accused, France Michaud, was the vice-president of business development in infrastructure for a Quebec engineering firm. They were charged with 13 counts under the Criminal Code of conspiracy to defraud, fraud, bribery, municipal corruption, providing a secret commission, breach of trust by a public officer and conspiracy. Justice Bonin of the Court of Québec found the two accused guilty on all counts except one.
According to the prosecution’s theory, between 2000 and 2008, city officials and employees of engineering firms agreed to favour certain firms for city contracts, rig bids and fix prices for city contracts and illegally increase fees payable to the firms. In exchange, certain engineering firms and their employees provided donations or gifts (such as sports tickets) to city officials, the mayor’s party and charities in the city. Although the former mayor admitted certain facts, including having received gifts from engineering firms, he argued unsuccessfully that he acted in good faith for the benefit of the city and that those gifts did not influence his decisions and the attribution of contracts by the city.
Apart from illustrating the rise of enforcement of anti-corruption laws in Quebec and Canada, this case is significant, as it provides a stark reminder of the importance of ensuring strong compliance programs and practices when dealing with corporate donations, gifts and hospitality — particularly when government officials are involved.
Other legal implications of this decision are:
- Section 121 of the Criminal Code was read broadly to include gifts and donations provided directly or indirectly to municipal officials (notwithstanding some caselaw to the contrary that limited this section to federal and provincial officials only). This is significant because the Criminal Code (subsection 121(1)(b)) goes further than any other Canadian anti-corruption legislation by penalizing the provision of a benefit to a government official without the usual requirement for corrupt intent or a quid pro quo requirement.
- The Court of Québec found that a volunteer on a committee that makes recommendations to the city in relation to public contracts was an “official” and could thus be bribed.
- The Court of Québec found that significant cash payments had been made to the mayor’s political party and to charities close to the mayor. As this case reminds us, a benefit need not be paid directly to the official to constitute a bribe; a payment made indirectly for the benefit of the official can also constitute a bride. This is why businesses’ anti-corruption programs should not only focus on benefits provided directly to an official, but also on benefits provided to political parties, charities with links to officials, or third parties with relations to officials.
- In line with existing caselaw, the Court of Québec also concluded that offering tickets to sporting events, if it goes beyond a mere gesture of courtesy or friendship, can also constitute an improper benefit where the recipient is a government official. This serves as a reminder that what was once traditional business hospitality may no longer pass muster when dealing with government officials in the face of increased anti-corruption enforcement in Quebec and elsewhere.
- The Court of Québec found that the intentional avoidance of the official public bid process through collusion constituted “fraudulent means”. Innocent bidders for city contracts were not fairly considered and therefore the city and its citizens were deprived of the best possible price on the bids tainted by collusion. This was sufficient for the Court of Québec to hold that criminal fraud occurred.
- The criminal offence of breach of trust is designed to preserve the confidence of the public in those who hold public office. Consistent with prior caselaw, an accused who is not a public official may also be guilty of a criminal breach of trust if he intentionally helps or encourages a public official to commit a breach of trust. Here, both the mayor and the engineer were convicted of criminal breach of trust; the latter having encouraged the mayor to misuse his public office by providing improper gifts.
- The criminal offence of conspiracy exists where there is an agreement to commit a crime, such as bribery or fraud, by two or more parties who intend to carry out the criminal endeavour. It is not a defence that the crime agreed upon is not ultimately carried out.
Reports of municipal corruption and ensuing arrests and trials will often only mention the generic concept of corruption. While a cash payment to a public official in exchange for a favour remains the quintessential example of criminal bribery, Canadian criminal law has evolved in a way that allows for the conviction of officials and private individuals involved in much more complex or subtle schemes. We can expect Quebec prosecutors and anti-corruption police to be encouraged by this recent judgment and to continue their efforts to actively investigate instances of alleged corruption or collusion in Quebec and to prosecute individuals, officials and corporations involved in such alleged schemes.
In practice, these recent developments show why an efficient anti-corruption program must not limit itself to prohibiting overt bribes, but must be designed to address more nuanced considerations that arise when traditional business development practices are utilized in dealings with government clients.
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