“Was there a widespread misuse of funds in Otéra? The investigation report said no,” said the former head of the Caisse de depot et placement du Québec (CDPQ) Michael Sabia in the second week of the lawsuit brought by Alfonso Graceffa against the institution. Had it been, the commercial lending subsidiary would have been “closed”, he said.
Called to testify, Michael Sabia delivered his version of the facts concerning the storm which splashed the institution and its subsidiary specialized in commercial real estate loans in 2019, following allegations of ethical breaches which targeted Otéra employees.
The “primary concern” of the Fund was to verify whether these were isolated ethical breaches or whether there was a systemic problem within Otéra, notably underlined Mr. Sabia before the judge.
“If the investigation we launched had shown an organizational problem within Otéra and widespread inappropriate activities, then our response would have been to get out of the portfolio, to close it. Because, once again, there was no tolerance within the Caisse regarding behavior that would raise questions about integrity,” said Mr. Sabia.
Bonds of trust with Quebecers
Mr. Sabia, who recalled this “intense period”, explained in particular that the CDPQ, while he was leading it, quickly took the necessary measures to shed light on the allegations, first revealed by The Journal of Montreal.
“Things that have the potential to diminish or break the bonds of trust between Quebecers and the Caisse are extremely serious matters,” said his former boss.
This is the reason why, after the publication in February 2019 in The Newspaper a first article mentioning the links between Martine Gaudreault, a former VP. d’Otéra, and organized crime — quickly followed by other articles on the ethical breaches of other employees — the Caisse de dépôt launched an investigation to understand the extent of the situation.
Summary of survey results
At the end of the investigation, which cost $5 million, the CDPQ unveiled a five-page summary of its results in May 2019. Without naming anyone, the Fund noted that “four people linked to Otéra” who allegedly committed “failures” and “who allegedly acted independently of one another” “no longer held positions” within its subsidiaries.
If the investigation we launched had shown an organizational problem within Otéra and widespread inappropriate activities, then our response would have been to get out of the portfolio, to close it. Because, once again, there was no tolerance within the Caisse regarding behavior that would raise questions about integrity.
Alfonso Graceffa, former director of Otéra, is one of those who have been relieved of their duties. The Caisse accuses him, among other things, of having accepted a cash payment of $15,000 at his place of work from an individual with a criminal past, as well as of having taken control of a company without report it to their employer.
Mr. Graceffa, who believes he was unfairly fired and defamed, is suing his former employer for $6.9 million. In particular, he believes that the anonymity of the summary of the results of the investigation tarnished his reputation by casting doubt on who the person linked to organized crime was.
On the aspect of anonymity, Mr. Sabia explained that the Caisse had to “find a balance” between its duty of transparency and the respect for the confidentiality of the individuals involved, which was “not easy”.