Ethics: the trial that shakes the Caisse de dépôt begins in Montreal on Monday

MISE & Agrave; DAY

The Caisse de depot et placement du Québec will in spite of itself find itself in the spotlight as of Monday morning, in the context of a trial where the ethical failings that have plagued it in the over the past few years.

This is the sight that Quebeckers wanted to avoid. The institution usually does its dirty laundry privately, very image-conscious, as it manages over $400 billion in assets.

But, over the next few weeks, big names such as Michael Sabia, ex-CEO of the Caisse, and Daniel Fournier, ex-boss of the Ivanhoé Cambridge subsidiary, should find themselves on the witness stand in Superior Court to address thorny subjects, such as ethics and conflicts of interest.

The Caisse is being sued by Alfonso Graceffa, the former CEO of its subsidiary Otéra Capital, which specializes in commercial real estate loans. He was fired in May 2019 for “serious ethical breaches”, according to the Caisse.

Alfonso Graceffa

The institution had carried out a major clean-up following a series of reports from our Bureau of Investigation which showed in particular that the CEO of Otéra had benefited from loans from his own organization.

We revealed also that a vice-president of Otéra, Martine Gaudreault (also fired), was in a relationship and in business with a private lender long associated with the mafia.

He says he is “sacrificed »

Graceffa is claiming nearly $6.9 million from the Caisse, because he alleges that the institution wrongfully dismissed and defamed him. He maintains that the Caisse “sacrificed him to save his public image and calm the media frenzy”. He also claims to have an irreproachable track record and to have always declared his interests.

For its part, the Caisse de dépôt criticizes Alfonso Graceffa in particular for having “met in his management office at Otéra a individual with a criminal past and [to have] agreed to receive from his hands an envelope containing $15,000 in cash”.

She also maintains that he was “involved in the approval of at least fourteen loans which benefited friends, one of whom was also a business partner”.

What did the bosses know?

How far have the ethical breaches gone at Otéra? What did the senior leaders of the institution know about the activities of Alfonso Graceffa? To what extent have criminalized individuals really approached the Caisse? These are examples of questions that will have to be addressed under oath during the trial scheduled for 12 days at the Montreal courthouse.

Daniel Fournier, former Chairman of the Board and Chief the management of Ivanhoé Cambridge.

There will also be talk of the famous investigative report commissioned by the Caisse on breaches of ethics, which cost $5 million of depositors' money and which is still secret to this day.

This type of case is usually settled out of court, but the parties have not been able to reach a settlement for four years. The Caisse publicly promised, in 2019, that it would pay “no compensation” to Alfonso Graceffa.

Another sign of the importance of this lawsuit: to defend itself, the Caisse retained the services of McCarthy Tétrault, one of the most prestigious law firms in town. And Alfonso Graceffa is represented by Jeansonne Avocats, the firm that was behind former Premier Jean Charest in his recent lawsuit against the Quebec government that won him $385,000.