A painful trial for the Caisse de depot et placement du Québec has just begun in Montreal. The former boss of the Otéra Capital mortgage subsidiary testifies against the woolen socks of Quebecers, whom he is suing for 6.9 million. He says he was “thrown under the bus” after investigative reporting about his conflicts of interest.
On the first day of his trial against the Caisse for “wrongful dismissal”, Alfonso Graceffa described in court the incessant appeals of his boss, the CEO of the real estate subsidiary Ivanhoé-Cambridge Daniel Fournier, on February 7, 2019. “He kept repeating: ‘ You have to do something… Maybe you should step aside”. »
In February 2019, reports from the Journal de Montréal revealed that a subsidiary of Otéra, MCAP Financial Corporation, had granted more than nine million in loans to the CEO’s personal real estate companies. Otéra had also lent 44 million to the company of a business partner of Graceffa, Thomas Marcantonio, who operated a residence for the elderly.
“They said to me, ‘If you don’t leave, we’re going to suspend you,'” Graceffa said in court. There was pressure from above, there was a lot of heat from the media…”
Two days after the first revelations in the media, Graceffa finally agreed to step down from his duties during an independent investigation, entrusted to lawyer Stéphane Eljarrat at Osler.
The next day, the Caisse announced that Graceffa had “offered to step down from all her functions in the real estate subsidiaries of the Caisse during this investigation in order to shed light on all the facts”, and that she had “agreed”.
Graceffa tells how Stéphane Eljarrat cooked it in the Osler offices, along with his colleague Frédéric Plamondon, on March 25, 2019.
“It was a strange encounter,” he said. They asked me about organized crime… I don’t know, maybe because I’m Italian… They showed me pictures and documents about the mafia…”
Then in May, Caisse CEO Michael Sabia invited the media to a press conference. He presented a “summary” of the findings of his independent investigation, noting that it had cost five million. Without naming anyone, the Caisse then deplored “serious and unacceptable shortcomings” at Otéra and announced that four people had left the organization.
The Fund particularly criticized transactions “carried out through a person who has, or had, direct and / or indirect links with known actors in the organized crime community”. She also mentioned that an individual with a criminal past had come to hand over $15,000 in cash to one of the leaders concerned in his offices.
In court, Graceffa lamented that the Caisse left it up to the public to guess “who was who” among the various people involved in these allegations.
The next day, the Caisse issued another press release explaining that three people, including Graceffa, had “no longer any employment relationship with the company”. In short, the ex-CEO would not return to take office.
In June 2019, Graceffa filed his “wrongful dismissal” lawsuit. In his request, he claims to have declared the majority of his interests in commercial buildings. However, he acknowledges being the one who received $15,000 in cash at the offices of Otéra. He also admits that he “forgot” to declare his interest in Construction Sainte-Gabrielle, a company originally owned by his struggling brother.
For his part, the Caisse’s lawyer, Mason Poplaw, assures that the gestures discovered during the internal investigation are serious, “even taken in isolation”. “These serious criticisms go to the heart of his duties, the highest office in this organization,” he pleaded.
In January 2020, the Caisse filed its defense against the lawsuit of its former trusted man in mortgage loans. She describes Graceffa as a leader “with an unsound ethical compass”.
His evidence and the transcript of close interrogations make it possible to learn that Graceffa was himself in the private real estate loan, while directing Otéra. While in office, he even granted a total of 11 million, through the brokerage company of a partner, Thomas Marcantonio.
Graceffa himself approved funding for a project of this “business friend”, as he himself calls it in questioning.
“Someone gave me five or six of these documents and I signed them without looking at what I was signing,” he explained in questioning out of court. The court documents also reveal that Thomas Marcontonio had received commissions as a broker on certain loans granted by Otéra.
Three years after the filing of the Caisse’s defense and these out-of-court interrogations, Graceffa’s lawyer, Marie-France Tozzi, intends “to show that there was a situation of tolerance at Otéra with regard to conflicts of ‘interests’.
In court, she mentions new articles from the Journal de Montréal published in 2022. They reported other conflicts of interest of the first vice-president and chief investment officer of Otéra Paul Chin, still employed.
The texts mentioned internal emails about loans totaling nearly 21 million to one of his companies with a shopping center in Terrebonne. Then another article looked at 26 other loans to entities with ties to Paul Chin or his wife.
“Paul is not just anybody,” Graceffa testified. He’s the chief investment officer! »
In his objections, the Caisse’s lawyer rejected any comparison between the two cases because Paul Chin was not as high up in the hierarchy.
The full report on the internal investigation was never released either. The Caisse only gave journalists a five-page summary during the press conference.
In his testimony, Graceffa insisted on the multiple positive evaluations that the Fund had made in his favor, before the fateful winter of 2019. “I performed very well,” he said, citing a document filed in evidence. An evaluation of his performance mentioned that it was a “privilege to have such an experienced president” at Otéra.