It is the turn of the lawyer for the Caisse de depot et placement du Québec to cross-examine the former CEO of its subsidiary Otéra Capital. Alfonso Graceffa had to explain on Wednesday how he gradually took control of his brother’s construction company, without ever declaring his interest to the ethics officers at the Caisse. “An oversight,” he said.
The lawyer for Quebeckers, Mason Poplaw, is trying to demonstrate that it was Alfonso Graceffa’s ethical excesses and conflicts of interest that justified his dismissal. Graceffa is suing his former employer for $6.9 million for “wrongful dismissal.”
The Caisse representative questioned the former strongman of the financial institution in real estate loans at length about his parallel involvement in Constructions Sainte-Gabrielle (CSG), first owned by his brother Salvatore Graceffa. Over the years, he became a 50% shareholder and its largest creditor.
Alfonso Graceffa tries to convince the judge that for him the company was only an “investment” and that he did not make decisions. “He was my brother. It was a one-man show, and it’s a small company. »
Mason Poplaw, however, pointed out to him that he was writing checks for CSG. While also in command of Otéra, he even gained the power to act in place of his brother, “who was not well”.
The ex-CEO of Otéra then assured that he had never used this power, but judge Andres Garin himself pointed out to him that he had seen a document where his signature appeared.
Graceffa had to admit that he had indeed signed a resolution for the company, stating that he should not have done so. “It was a mistake,” he said.
His brother’s problems were not limited to those of CSG. In his lawsuit, the former CEO of Otéra admitted having welcomed into his office at the Caisse an individual with a criminal past who owed money to Salvatore Graceffa. He himself received $ 15,000 in cash from him, but assures that he was unaware that the man in question, Jean-Denis Lamontagne, had been convicted in the past for drug trafficking.
“I have always been loyal to the organization,” Graceffa assured during the tense interrogation, the day after a trying day when he had wiped away a few tears while answering questions from his lawyer Marie-France Tozzi.
Over the difficulties that his brother’s company had experienced since 2012, Graceffa had lent him up to two million and she still owed him 1.8 million when he left Otéra, Mason Poplaw pointed out in his cross-examination. When the company became virtually insolvent, Graceffa therefore obtained complete control of it, as the main creditor.
The ex-CEO of Otéra was also driving in a car rented by CSG, added Mason Poplaw in court. Despite all these financial ties, Graceffa had to agree that he never attempted to check with ethics compliance officers whether his investment and involvement in CSG met ethical requirements. The company was building houses on land purchased in Brossard.
The Caisse wishes to demonstrate that, far from having dismissed Graceffa without justification, it had no other choice but to get rid of him in May 2019, on the basis of the conclusions of its internal investigation, entrusted to lawyer Stéphane Eljarrat. , at Osler.
The facts discovered on this occasion are serious, “even taken in isolation,” said Mason Poplaw at the start of the trial on Monday. “These serious criticisms go to the heart of his duties, the highest office in this organization. »
In January 2020, the Caisse’s defense against its former confidant described Graceffa as a leader “with an unruly ethical compass”.
According to him, on the contrary, the Caisse “thrown him under the bus” to clear his reputation, after the independent investigation triggered by a series of reports from the Journal de Montreal in 2019 on the ethical problems in its division, Otéra Capital. .
In particular, they revealed that a subsidiary of Otéra, the MCAP Financial Corporation, had granted more than $9 million in loans to Graceffa’s personal real estate companies. Otéra had also lent 44 million to the company of a business partner of the CEO, Thomas Marcantonio.
