Harper aide intervened for Montreal developer

L'affaire Soudas-Housakos

OTTAWA — A spokesman for the Prime Minister and a Conservative fundraiser made separate backroom interventions in favour of a real-estate firm that faced losing a $50-million complex to the federal government in 2006, sources told The Globe and Mail and Radio-Canada.
Dimitri Soudas, a key architect of Stephen Harper's Quebec policies and his deputy press secretary, got involved in the battle between Ottawa and the Rosdev Group a few months after the Tories took office with a promise to bring the highest ethical standard to public life.
Mr. Soudas called an extraordinary meeting at the Prime Minister's Office in Langevin Block on August 2, 2006, with senior ministerial staffers from Public Works.
Conservative officials said there was a clear sense in the party at the time that Rosdev and its influential president, Michael Rosenberg, could become strong allies in Montreal, especially in a riding like Outremont with a strong Jewish community.
Sources said Mr. Soudas's position during the meeting was favourable to Rosdev and that he raised the possibility of Public Works dropping its plan to exercise an option to claim the complex for $0 in 2010.
At the time, Public Works was stating that attempts to come to a negotiated solution on a range of disputes with Rosdev had proved fruitless.
“He wanted this to go to mediation, to a conflict resolution mechanism, to delay this,” a source said of Mr. Soudas's position.
Mr. Soudas said yesterday he only looked at the matter after it had been raised with him by a Montreal city councillor, and that his intervention was not driven by political considerations.
“I transmitted the file to Public Works,” he said.
Mr. Soudas's move came a few months after an intervention on the same matter by his friend and party fundraiser, Leo Housakos, who was named by the Harper government to the board of Via Rail last month.
In an interview, Mr. Housakos said he made a pitch on Rosdev in the spring of 2006 during an informal meeting with Frédéric Loiselle, then chief of staff to Public Works Minister Michael Fortier.
Mr. Housekos was accompanied at the meeting by John Lemieux, a lawyer for Rosdev, but Mr. Housakos said they were there to discuss a partisan event and that he only raised the Rosdev file in passing.
Mr. Housakos said he addressed the issue because he thought it could be beneficial to the Conservative Party, pointing specifically to Mr. Rosenberg's strong standing in Montreal's Hasidic community.
“I told Fred, ‘If we can help someone who is powerful, who is important in a riding like Outremont, why not help him get a fair hearing?'” Mr. Housakos said.
Mr. Soudas and Mr. Housakos are prominent members of the Greek-Canadian community in Montreal, worked together on the 2001 mayoral election and are supporters of the Action Démocratique du Québec.
While they are long-time friends, they said they have never discussed the Rosdev matter. Mr. Housakos, who works in marketing, added he has never acted as a lobbyist.
“I have no client, none whatsoever, that does business with the federal government,” he said.
Nevertheless, sources said that Mr. Housakos has been in contact with officials from a military company that was interested in selling hardware to National Defence. In addition, The Globe and Radio-Canada have learned that Mr. Housakos introduced officials from the company to Mr. Soudas of the PMO at an informal meeting last year.
Mr. Housakos said he has no memory of dealing with a military company.
“I don't know anyone in that sector,” he said.
(Mr. Lemieux, the lawyer who acted on behalf of Rosdev, recently registered to lobby federal officials on behalf of ThyssenKrupp Marine Systems Canada Inc., a firm that is in the running for a Defence purchase of two military supply ships.)
When the Conservatives came to office in 2006, the federal government had already launched a bid to take over a building complex owned by Rosdev in Ottawa called L'Esplanade Laurier.
L'Esplanade is a well-known government address with its two 22-storey buildings that house the Treasury Board and the Department of Finance, where federal budgets are written.
According to briefing notes written for previous Public Works ministers, a number of legal disputes sprang up shortly after Rosdev bought the Esplanade and a building across the river from Parliament in Gatineau, Que., Les Terrasses de la Chaudière, which houses Indian Affairs, Heritage and the CRTC. The issues included rent overpayment, water quality, fire alarm upgrades and falling marble cladding.
“From the time that Rosdev, whose president is Mr. Michael Rosenberg, acquired these complexes, a number of disputes have arisen over operational, financial and maintenance issues,” said a 2005 briefing note from the deputy minister.
At the time, Rosdev had filed five lawsuits against the government, while the government had two against Rosdev. The most publicized dispute involved the falling marble cladding at the Esplanade Laurier.
“Rosdev agreed to pay for the replacement of the marble on the first and second floor of the complex. Unfortunately, the [1998] agreement did not fix a date for the completion of this work, and seven years later Rosdev has not agreed to have the work done on the basis that it did not say when it would do the work,” the briefing note said.
The note added that these types of commercial disputes are generally settled by mediation. “Unfortunately, these disputes have proven to be the exception to the rule,” the document said.
Asked to comment on the issue yesterday, a spokesman for Public Works Minister Michael Fortier said the Conservative government did not go the way of mediation and that the matter remains before the courts.
A spokesman for Rosdev, Sal Fratino, said the company's position is that Ottawa “acted illegally” when it launched its bid to buy back L'Esplanade Laurier.
- source

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