City of Hamilton awards $1.4M contract to company tied to security firm banned from public contracts in Quebec

The City of Hamilton has awarded a $1.4-million contract to EuroWorld a company connected to a now-bankrupt security firm banned from bidding on public projectsin Quebec because of questionable business practices.

The federal government temporarilybanned Neptune Security Servicesfrom bidding on its contracts in 2023.

Neptune, which was also operating as aconstruction company, had secured hundreds of millions of dollars in contracts for government agenciesover a decade, including construction contracts on Canadian military bases, and Quebec's provincial police force Sret du Qubecand some courthouses.

But sensitive federal contracts and allprovincial contracts ended last year following an investigation by Radio-Canada's Enqute that revealed Neptune was hiding its true corporate head, Robert Butler, by listing its director as his ex-partner.

Butler also operated using a second identity, Badreddine Ahmadoun, including when running a Mississauga, Ont., real estate brokerage, Enqute found.

He previously told an undercover Enqute journalist that his companies prefer to "work in the shadows." Neptune subcontracted out work to various numbered corporations not authorized to hold public contracts in Quebec.

Soon after Enqute's report, in March 2023, Quebec's Public Procurement Authority (AMP) found that Neptune, led by Butler, had made false declarations and breached integrity requirements, and banned it from bidding on provincial contracts for five years.

The decision was recently upheld by Quebec's Superior Court.

Neptune also held contracts in Ontario, including $12 million worth with the City of Hamilton dating back to 2018, staff confirmed. The jobs ranged from building a retaining wall, to guarding all municipal buildings and facilities to operating weigh scales at waste collection centres.

Those contracts ended when Neptune declared bankruptcy in May 2023, leaving hundreds of security guards across Ontario unemployed and unpaid.

Butler previously deniedallegations

Butler didn't respond to CBC Hamilton's request for comment through his lawyers, but responded toEnqute's questions earlier this year. In a letter dated Feb. 2, Butler denied his personal integrity has ever been called into question.

"It would be false and extremely damaging to my reputation to suggest to the public that I have committed any offence whatsoever, or any act suggesting appropriation or embezzlement of funds, false documents, forged signatures, fraudulent statements, collusion or otherwise," Butler wrote in French.

After Neptune went bankrupt, the City of Hamiltonbegan searching for replacement companies. By February 2024, it had awarded the four-year, $1.4-million contract for the weigh scales to the lowest bidder: EuroWorld Corporation.

EuroWorld describes itself as a "staffing solutions" company that supplies bylaw officers, school crossing guards, and skilled and unskilled labour to clients.

Hamilton procurement staff told CBC Hamilton there is no information to indicate EuroWorld and Neptune are related.

However, corporate documents show EuroWorld's director is Abdelouahid Ahmadoun, Butler's father.

"The family's support of one another is certainly not synonymous with any kind of misconduct," said an email to CBC Hamilton signed byAbdelouahid Ahmadoun.

"It is abusive, false, misleading, and ignorant that you or Radio-Canada should suggest otherwise to the public."

In the letter to Enqute in February, Butler said his father was EuroWorld's administrator "both on paper and in fact" and Butler acted as a "consultant" who provides "support" to his family members when needed.

Butler also gave a presentation before Hamilton city councillors in Cochrane, Ont., earlier this year, pitching a long-term care residence on behalf of EuroWorld and two other companies. There, he presented himself as "the manager' and "administrator."His father wasn't present.

EuroWorld,Neptune share same Mississauga address

City staff in Hamilton said they evaluate bidders on a "case-by-case basis" and EuroWorld met its criteria.

"Protecting city interests and getting the best value for taxpayers dollars is the city's top priority and a key part of ongoing procurement efforts," the city said in a statement to CBC Hamilton.

EuroWorld's registered address is listed as the same Mississauga UPS store as Neptune was located, according to corporate records.

Both companies' addresses are POboxes, which is a practice not allowed under federal corporate law. The registered address is required to be a location where legal documents can be served and records are stored, confirmed spokespersonCheyenne Dalyon behalf of Corporations Canada.

EuroWorld submitted a different address to the city during the bidding process. CBC Hamilton went to the address, a strip mall in Mississauga, but found no indication EuroWorld was located there. A security company that does have an office at that address and a property manager both said they'd never heard of EuroWorld.

Ritch Whyman, a labour activist and Hamilton resident, said given Neptune's history, any connection with EuroWorld should havebeen enough of a red flag to the city for it to not award it a million-dollar contract.

"I find it terrifying and I find it abhorrent that my tax dollars would be used to reward a company like [EuroWorld]," he said. "It speaks volumes of the contempt [city staff] have for ordinary working people and ordinary working taxpayers."

Company faced complaints over not paying staff

Before it was banned from bidding on public contracts in Quebec, Neptune faced other challenges.

In 2016, Neptune lost a contract in a Montreal borough due to overbilling, reported Enqute. Another $42-million contract with Canada Border Services Agency (CBSA) to handle surveillance at a Laval, Que., immigration detention centre was cut short last March because of lack of equipment, training and staff.

Neptune made errors when paying its agents at the detention centre, Radio-Canada reported. The union said Neptune owed workers more than $300,000 in total and faced about 60 grievances.

After Quebec moved to ban Neptune from bidding on public contracts in March 2023, the company was accused of collecting union dues and group insurance premiums without passing them along to the United Steelworkers union as expected. The union alleged Neptune owed $1.4 million and had filed a lawsuit with a provincial tribunal.

Neptune also stopped paying hundreds of security guards in that province.

Butler told Enqute thatthe union's claims are untrue and Neptune never tried to "evade" its legal obligations.

In May 2023, Neptune went bankrupt, leaving hundreds of Ontario security guards, including those in Hamilton, without pay, said Jeffrey Ketelaars with the United Food and Commercial Workers International Union (UFCW), which represented those workers.

The union fought to get "every dollar" possible from Neptune and reached a settlement through the courts, Ketelaars said.

Of Hamilton hiring EuroWorld, Ketelaars said he was "astounded."

"The government is supposed to be protecting workers," he said. "If they just pick the lowest price bidderand don't look at other criteria, we're going to see Neptune-type events happen again in the future."

Following the reports by Enqute, Butler launched a lawsuit againstRadio-Canada. A motion filed in Montreal last March on behalf of Badreddine Ahmadoun (Butler) argues the Radio-Canada reports contain highly defamatory and prejudicial remarks.

The lawsuit argues Radio-Canada and its journalist have spread a false, problematic and racist narrative in which [Butler] has two hidden identities and uses them fraudulently and to evade the law. Butler is seeking $300,000 in damages and requesting the removal of all reports.

None of Butler's allegations against Radio-Canada have been tested in court.

Radio-Canada disputes Butler's allegations.