The sudden announcement Monday came from the same witness whose previous testimony had hastened the resignation last fall of Montreal's mayor, Gerald Tremblay.
That former political operative, Martin Dumont, recanted another part of his testimony — and was recorded on video stating that he'd actually made up some details.
The surprise twist dominated the first day of proceedings as the inquiry returned from a lengthy winter break.
After a procedural debate, inquiry officials opted to play a videotape where skeptical investigators were seen grilling Dumont about testimony he had previously delivered.
The contents of that recording have created a credibility crisis for the inquiry. The probe will not only have to reassess Dumont's evidence but could also face stronger attacks from people claiming they have been unfairly besmirched by its testimony.
In the video recording, Dumont was pressed by inquiry investigators over an anecdote he had shared on the stand, about a receptionist for the mayor's party being forced to count $850,000 in presumably illegal cash donations.
In the reply, Dumont was heard saying: "That story is false. That's not what happened." He then added: "It was a falsehood on my part."
His lawyer, Suzanne Gagne, tried Monday to contest the validity of the recording because she said legal procedures had not been properly followed during the interrogation.
The anecdote about the $850,000 is not actually related to Dumont's other testimony which precipitated the embattled mayor's resignation.
Dumont had been an aide to Tremblay, before he went to Ottawa where he once worked for Prime Minister Stephen Harper and in the offices of several Tory cabinet ministers.
While testifying in October, he alleged the mayor was aware of illegal financing within his own party, Union Montreal.
In one of his many incendiary allegations, he said the mayor was told during a meeting about how the party kept a second set of books.
He said Tremblay swiftly left the room to avoid being part of the discussion.
The mayor had long maintained his ignorance of illegal financing and the testimony proved to be the final nail in his political coffin. When he resigned several days later, Tremblay denied Dumont's allegations and called them "completely false.''
Dumont was called back to the stand as the inquiry returned from a nearly two-month break Monday. He was pressed over the truthfulness of another anecdote he had shared during his original appearance in October.
A grim-looking Dumont insisted Monday that someone did, in fact, express discomfort with him about having to count stacks of cash at the offices of Montreal's ruling party.
But Dumont said he couldn't remember who it was. His body language was less confident than during his first appearance, as he frequently stared downward and replied in hushed tones as he was grilled by an inquiry lawyer.
"Could I be mixing up two stories? It's very possible," he said. The video recording, where he more explicitly called the anecdote a "falsehood," was played later in the day.
Moments before the inquiry called him back to the stand, it heard from another witness Monday who contradicted some of his testimony.
Alexandra Pion told the inquiry that she worked as a secretary at Union Montreal headquarters and was only asked on one occasion by Bernard Trepanier, a Union Montreal fundraiser, to help him count $50 and $20 bills in a briefcase.
Pion said she had no idea how much money was there — because she refused to count it.
"It wasn't in my job description to count money," Pion told the inquiry.
"I simply left the room."
In his testimony last fall, Dumont had offered far more vivid details.
He described how he stepped in because he was disgusted that party officials would make a summer employee, Pion, count $850,000 in cash.
Dumont said he urged Trepanier — now nicknamed "Mr. Three Per Cent'' in Quebec media — to stop involving the student in that kind of activity.
Pion said she did not know if others in the office were witness to such an exchange. But she said she never once discussed the issue with Dumont and had no idea about that $850,000 figure.
"It was a case filled with money," Pion told the inquiry.
"I saw it and I left."
Pion confirmed that there were two safes in the Union Montreal offices but couldn't say if there were money-counting machines in the office.
In a statement Monday, Justice France Charbonneau said anyone caught lying on the stand will face charges.
While witnesses cannot be charged criminally for doing the things they describe before the commission, they can still be charged with perjury. A former city official has already been slapped with such charges following alleged untruths in his testimony.
The inquiry resumed Monday after a seven-week hiatus. Its winter session will continue its look at the City of Montreal and delve into political party financing.
The Charbonneau Commission broke off its hearings at the end of November following a wild session that saw the longtime mayors of Montreal and Laval resign in a cloud of controversy.
The probe has already heard testimony about how the price of public projects was inflated with the proceeds split between construction firms, political parties, city workers and the Mafia.
Lead counsel Sonia LeBel said Monday that the financing of political parties — municipal and provincial — will also be on the menu.
"It's a process that requires patience," LeBel said. "The portrait of the situation will become clear, element by element and witness by witness."
The inquiry has added four lawyers to its staff over the seven-week break. It has also met recently with numerous witnesses.
Charbonneau said the inquiry will continue with two commissioners hearing the testimony.
The third commissioner, Roderick A. Macdonald, has been unable to attend the public hearings as he recovers from cancer.
Macdonald will continue to work behind the scenes with the research team.
The Charbonneau Commission is supposed to table its final report by Oct. 19, 2013. However, there is increasing speculation that it might be hard-pressed to complete its work on time.
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