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Judge to decide Dec. 17 if ex-MUHC exec must pay millions in damages

The MUHC wants up to $934 million from Yanaï Elbaz, who pleaded guilty to receiving a $10-million bribe, breach of trust, conspiring to launder.

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A Quebec Court judge will decide next month whether Yanaï Elbaz must pay damages to the McGill University Health Centre for his role in rigging the bid to build the superhospital.

Judge Claude Leblond said he will deliberate on the issue after engaging in a long debate on Wednesday with MUHC lawyer Alexander De Zordo at the Montreal courthouse. Among the many questions posed by Leblond is whether the MUHC’s request will destabilize the agreement reached between defence lawyer Nadine Touma and the Crown through which Elbaz could be sentenced to a prison term of 39 months.

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On Monday, Elbaz, the MUHC’s former assistant director in charge of developing the site where the hospital was ultimately built, pleaded guilty to receiving a $10-million bribe to award the contract to a consortium led by SNC-Lavalin, to breach of trust, conspiring to launder the proceeds of his crimes with Arthur Porter (the former MUHC CEO who died in 2015) and having transferred the proceeds of a crime to a foreign country.

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On Wednesday, Elbaz appeared sleep-deprived as he sat in the prisoner’s dock and listened to Leblond and De Zordo’s exchange. Elbaz was taken into custody on Monday and had spent the previous two days behind bars.

Arthur Porter, executive director of the MUHC and Yanai Elbaz, left, visit the site of the future superhospital on the Glen Yards in Montreal on April 17, 2008.
Arthur Porter, executive director of the MUHC and Yanai Elbaz, left, visit the site of the future superhospital on the Glen Yards in Montreal on April 17, 2008. Photo by Allen McInnis /STF

“We are asking for something that is reasonable and just,” De Zordo said while adding the MUHC was kept in the dark of the agreement reached by Touma and the Crown until last week. He said the MUHC is seeking, at most, $934 million in damages from Elbaz. The request is based on how in some cases, since 2015, victims of corruption or fraud can request 20 per cent in damages.

While the figure most often associated with the MUHC superhospital is the $1.3 billion it cost to build it, De Zordo said on Wednesday that the actual cost of the contract is $4.6 billion because, despite the scandal, it is still in a public-private partnership with the consortium led by SNC-Lavalin to operate the hospital for 20 years. De Zordo, who did not refer to SNC-Lavalin by name in court on Wednesday, said the $934 million represents 20 per cent of the overall contract.

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“I will abstain from commenting on the party that received the contract in this case,” De Zordo said after Leblond asked him what he thought of how, at the outset of Wednesday’s hearing, François David Paré, a lawyer representing SNC-Lavalin, announced that a criminal case “was not the proper forum” to seek damages. On Monday, the same lawyer had said SNC-Lavalin would ask Elbaz for more than $30 million in damages.

The MUHC is suing Elbaz, Porter’s estate and former SNC-Lavalin executive Riadh Ben Aïssa for $30 million. Leblond asked De Zordo why the MUHC isn’t suing SNC-Lavalin for $934 million and the lawyer replied that it wouldn’t make sense for a party in a 20-year partnership to sue its partner.

De Zordo also informed the court on Wednesday that the selection process used to determine which group would win the contract alone cost the MUHC $20 million. He said the costly process was put in place to ensure the best bid won through a transparent process and Elbaz failed to deliver on that end by accepting a bribe.

Ben Aïssa admitted earlier this year that he created a false contract in order to pay Porter and Elbaz what was supposed to be a $30-million bribe to win the contract. Nearly $22.5 million was paid before other executives with the engineering firm began to ask questions. Elbaz received $10 million and, so far, investigators have only recovered $6 million in assets that are currently frozen through court orders.

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After the hearing, prosecutor Claudie Lalonde-Tardif told reporters that the issue of the $6 million that is frozen has yet to resolved and said the MUHC’s request could potentially scuttle the agreement reached with Elbaz and result in him withdrawing his guilty pleas.

Leblond will deliver his decision Dec. 17 on damages and Elbaz’s sentence.

pcherry@postmedia.com 

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