11/04/2013 04:42 EST | Updated 01/23/2014 06:58 EST

Quebec's biggest union leader resigns in controversy

MONTREAL - The head of Quebec's biggest labour union has resigned, one day after an investigative report into his dealings with Premier Pauline Marois amid a barrage of other controversies.

The report by Radio-Canada was the latest difficulty to befall Michel Arsenault, chairman of the FTQ, who has been overheard on wiretap conversations in recent days as the provincial corruption inquiry examines union ties to organized crime.

He told reporters at a news conference Monday that a combination of factors had led to his decision to resign in advance of a union election later this month.

"My age, family reasons, the media pressure on my family," Arsenault said, listing reasons for his departure.

"I'm due for retirement and I go in peace, proud of the work I did."

The last few days, however, have been anything but peaceful.

The FTQ has been rocked by testimony at the Charbonneau inquiry that Arsenault knew about organized crime's grip on the 70,000-member FTQ construction wing, but didn't act.

Arsenault denies that interpretation.

He said he's eager to tell his side of the story — and to defend the reputation of the $9.3 billion union-investment fund that was allegedly targeted by mobsters. He is scheduled to speak to a parliamentary commission in Quebec City on Tuesday.

Arsenault also defended his dealings with Marois. He said there was nothing untoward about them.

Radio-Canada reported that in 2008-09, he met with Marois twice just after the FTQ Solidarity Fund invested $3 million in a company part-owned by the Parti Quebecois leader's husband.

The network reported sources saying they doubted the value of the investment, which lost money, and believed it was made essentially to curry favour with Marois before she became premier.

None of those sources spoke on the record.

And Marois denied even discussing her husband's project with Arsenault.

"I never talk about my husband's business with anyone," Marois told reporters.

"He's old enough to speak for himself."

She said her millionaire husband's shares in different companies are held in a blind trust, except for that one company mentioned in the Radio-Canada report — the BLF investment trust.

She said that new business needed his experience but that, at the appropriate time, her husband Claude Blanchet would treat it like all his other holdings.

Arsenault, for his part, said he regularly meets with politicians to discuss a variety of topics.

"The head of the FTQ meets all politicians. The only politician who's ever refused to meet me, in six years, is Stephen Harper," Arsenault said.

The Harper government has announced plans to chop a federal tax credit for union venture-capital funds, which are especially popular in Quebec, although their reputation has taken a hit at the Charbonneau inquiry.

Arsenault is preparing a vigorous defence of the FTQ fund when he appears Tuesday at the legislature.

"What a success story," Arsenault said.

"A $9.3 billion fund. Think about that. A fund that maintained or created 500,000 jobs in Quebec in the last 20 years. A fund whose value has increased for nine consecutive quarters ...

"We don't hear that (side of the story) often."

Arsenault insisted that his resignation had nothing to do with the revelations at the Charbonneau inquiry, and that at 63 years of age he's done his duty and wants to spend more time with his family. Another mandate would have taken him past his 65th birthday.

"I have nothing to hide and if I'm invited to attend the Charbonneau commission hearings, I'll go with pleasure to tell my side of the story," Arsenault said.

"There are a lot of little stories out there that aren't correct and I repeat that the wiretap conversations are a violation of my rights."

Arsenault said he was under police surveillance for a year as part of an investigation. Two prosecutors listened to the tapes and decided there was nothing to prosecute, he said.

He said he personally doesn't know crime figures. The same can't be said for some of Arsenault's colleagues at the union.

"If you are asking me if it's normal that our members frequent organized-crime figures, I'd say no," Arsenault said Monday.

Meanwhile, the corruption inquiry continued to hear Monday from former FTQ-Construction boss Jocelyn Dupuis about his own ties with members of the Mafia and criminal bikers.

In one of the wiretaps from April 2009, Dupuis is heard threatening Arsenault after being informed by the latter that projects he wants to fund won't be getting money.

Dupuis, who has been described as having close ties to bikers and the Mob, defended his relationships with Hells Angel Jacques "Israel" Emond, and Raynald Desjardins, once a high-ranking Rizzuto lieutenant now facing a first-degree murder charge.

For Dupuis, working with crime-linked individuals was akin to a humanitarian act.

"If I can help someone reintegrate into society, no matter what was done (in the past), you can be sure I'll help," Dupuis testified.

Dupuis' testimony continues Tuesday.

As for Arsenault, he said he's earned his right to retirement and insists he won't be sitting on any more union boards in the future.

"The only seat I'll be in is the La-Z-Boy at my house," Arsenault said.

-With files from Pierre Saint-Arnaud and Lia Levesque

Note to readers: This is a corrected story. An earlier version said Arsenault is already scheduled to testify at the Charbonneau inquiry.