Montreal mayor says irregular land sales 'unacceptable'

Montreal mayor Grald Tremblay condemned irregularities revealed in a scathing auditor's report that probed the city's housing and development corporation and vowed to fully co-operate with a police investigation into the matter.

"I strongly condemn the situation that has been reported," Tremblay said Tuesday, a day after auditor Michel Doyon released his damning report.

"The most basic and elementary rules of responsible management of the SHDM [Socit d'habitation et de dveloppement de Montral] have been violated, on multiple occasions, and I find this to be completely unacceptable."

'I think that I did everything that is humanly possible to be informed of these situations. Unfortunately, we have certain individuals [who] took decisions without informing me.' Montreal mayor Grald Tremblay

Doyon's report documented 20 property sales in 2007 and 2008 involving privatedevelopers marked by irregularities. The cases he highlightedincluded transactions without any tender process or city council authorization and sale prices far below market values that resulted in the city losing millions of dollars.

Doyondecided to recommend a policeinvestigation after weighing the full impact of the irregularities.

"You take each event individually, [and] you can always find a good explanation of why it happened," Doyon said. "You put the sum of the incidents together, and it raises questions and doubts."

Tremblay said the city would collaborate "closely and fully" with provincial police ordered to investigate the audit's findings. The mayor alsodenied his office knew anything about anyirregularities.

"I think that I did everything that is humanly possible to be informed of these situations,"he said.

"Unfortunately, we have certain individuals [who] took decisions without informing me."

Land sales involved Montreal businessman accused of federal tax fraud

The questionable transactions included property sales that were part of high-profile projects, such as the city's planned new entertainment district (Quartier des spectacles ).

One property sale in the St-Laurent borough involved Tony Accurso, a Montreal entrepreneur who is currently under federal investigation for tax fraud. Accurso is also linked to Montreal's water meter contract,which isbeing investigatedby an auditor after it was suspended this spring following corruption allegations.

Montreal's housing corporation bought half of a St-Laurent property lot from the city for $733,000 and sold it to Accurso's company, Construction Louisbourg, for $1. Construction Louisbourg already owned the other half of the lot.

Neither the city council nor executive council were informed of the transaction, Doyon said.

Tremblay said he has alreadytaken measures to clean up the housing and development corporation, including replacing several members of the board of governors.

Martial Fillion, former director at the housing corporation, was fired last fall after revelations he endorsed land sales without board approval.

Opposition leader Benot Labont demanded the city attempt to recover that lost money immediately.

"You should not wait for the end of the police inquiry to do that," he told CBC News. "I think the administration should take the necessary [steps] to try to take back the money that was lost."