MONTREAL — Quebecor CEO Pierre Karl Péladeau's brief foray into Quebec politics might hurt his company in a way that he never predicted, and now he's trying to sort his way out of it.
On Tuesday, Péladeau announced he was going to appeal his own guilty plea, admitting to violating Quebec's campaign finance law by paying off his 2015 Parti Québécois leadership campaign's debt, because he learned that the province's anti-corruption law might cause that illegal act to make the companies he owns — Quebecor and its subsidiaries — ineligible for government contracts.
Péladeau made the guilty plea on July 10, admitting to illegally using personal funds to reimburse about $137,000 in debt from his leadership campaign, though he announced last week he was contesting the fines imposed on him that La Presse reports came to a total of $27,600 (he didn't confirm how much he had been fined). The law provides for a maximum donation of $500, even to your own campaign.
Péladeau argued because he left politics prematurely in 2016 for family reasons, reimbursing the debt through campaign contributions became "realistically impossible." So, to avoid penalizing the bank that lent money to the campaign, he decided it was better to break the letter of the law.
The problem with admitting guilt here is that Quebec's Act Respecting Contracting By Public Bodies, which Péladeau himself voted for in 2015, states in Article 21.2 that "if an associate of an enterprise is found guilty, by a final judgment, of an offence listed in Schedule I, the enterprise becomes ineligible for public contracts for five years." Péladeau is an associate of Quebecor both because he is its CEO and because, through his holding company, he controls about 74% of the voting rights of Quebecor Inc.
Schedule I lists offences like bribery, perjury, breach of trust, forgery, fraud, drug trafficking, tax evasion, insider trading, and making illegal campaign contributions.
The potential fallout is significant. Public contracts that would be denied to Quebecor could include internet service or wireless contracts to Videotron, or advertising contracts to TVA and the Journal de Montréal. The law covers not only the government itself but provincially funded public bodies including school boards, universities and hospitals.
On Tuesday, Quebecor tried to downplay that significance, issuing a statement that says "Quebecor’s revenues from (public) contracts account for a very small proportion of the $4.1 billion in revenues and of the $1.6 billion in adjusted operating income posted in 2017. Therefore, those contracts have no material impact on the Corporation’s profitability."
It didn't specify what that proportion is, exactly. But it did say it was "confident that the matter will be settled in the near future."
If Péladeau is unsuccessful in his appeal, he has one other avenue available to him to save Quebecor's contracts while still maintaining control of it: he can appeal directly to the chair of Quebec's Treasury Board, who has discretionary power to "remove any unlawful entry" from the register of enterprises ineligible for public contracts.
However, that is cabinet position held by Pierre Arcand, and the ruling Liberal government is not likely to be in the mood to do Péladeau, the former PQ leader,. any favours, especially with an election only two months away.
