Quebec reviewing potential conflicts of PQ leader Péladeau’s media assets

Published Tuesday, May. 26 2015, 9:27 PM EDT

Last updated Wednesday, May. 27 2015, 8:54 AM EDT

A wide-ranging review of the Quebec National Assembly’s ethics rules has begun, with one issue trumping all others: Is Pierre Karl Péladeau’s status as the controlling shareholder of Quebecor Inc. compatible with his role as a member of the legislature and Leader of the Official Opposition?

The examination of Mr. Péladeau’s dual status hadn’t even started Tuesday, when the politicians began baiting each other with veiled threats, but Quebec’s Ethics Commissioner would not bite. Jacques Saint-Laurent had a succinct response as he stuck resolutely to the high ground: It’s an interesting question legislators could address with a law, but it’s not up to him to decide.

Mr. Péladeau was elected head of the Parti Québécois this month and has pledged to put his Quebecor shares in an arm’s-length trust with instructions not to sell them. He plans to return to Quebecor, which by some estimates controls 40 per cent of Quebec media, and pass the company to his children when he’s done with politics.

Mr. Saint-Laurent said Mr. Péladeau has already gone further than the current rules demand with his promise to put the shares in trust. Current ethics rules demand that shares be placed in a blind trust for the premier and his cabinet ministers. “He has taken a bigger step than current rules require,” Mr. Saint-Laurent said.

However, with no-sale instructions, his trust is not blind. Tightening the rules around blind trusts is among the 23 recommendations Mr. Saint-Laurent has made and is one of the only proposed changes that could affect Mr. Péladeau.

Liberal committee of institutions chair Gilles Ouimet opened the hearings by saying the proceedings were not all about Mr. Péladeau – “even if the case is important.” But Mr. Péladeau was the biggest star of the show.

Mr. Péladeau helped set the stage for the showdown himself when, on the eve of Tuesday’s hearing, he made veiled threats about the consequences his fellow National Assembly members could face if they made a political issue of his ownership status.

He then suggested on Tuesday that Quebecor could move its headquarters out of the province should he be forced to sell his shares because nobody in Quebec is rich enough to pay the $5-billion he claims his controlling interest would cost.

He denied he was stoking fear or promising media retribution against political opponents.

Liberal House Leader Jean-Marc Fournier accused Mr. Péladeau of bullying his colleagues in the legislature.

“When he says there will be consequences for people who don’t agree with him, I want to know what he means,” Mr. Fournier told reporters.

His PQ counterpart, Agnès Maltais, accused the Liberals of “throwing mud to hide the mud that is stuck to them” and added that Mr. Péladeau is acting in “an exemplary” fashion by starting to move his shares into trust without any requirement he do so.

Mr. Saint-Laurent noted there have been few similar situations in Quebec politics. While other corporate owners have had to reconcile business interests with political life, none other controlled such a large swath of the media that helps set the political agenda in the province. He acknowledged the possibility that such a powerful position could be used to buff Mr. Péladeau’s image or sully those of his political rivals. He did not, however, recommend a solution.

“There is a grey zone that must be addressed. I have nothing but respect for the journalists in the legislature, but it’s not them who have created this doubt. It’s the owner,” Municipal Affairs Minister Pierre Moreau said before the hearing. “Who is the boss? Mr. Péladeau is the boss.”

The National Assembly’s legal adviser will testify next week. The committee will then decide whether to call experts or other witnesses.