01/28/2014 01:14 EST | Updated 03/30/2014 05:59 EDT

Ex-union boss defends record at corruption inquiry, says he never accepted bribes

MONTREAL - A former union boss insisted on Tuesday that he never accepted any bribes while in charge of Quebec's largest labour federation.

Michel Arsenault, the former president of the Quebec Federation of Labour, told Quebec's corruption inquiry repeatedly during his second day of testimony that he was not under the influence of organized crime.

Ken Periera, an earlier star witness at the inquiry, had testified that Arsenault had been offered $300,000 by the Mob in exchange for pushing ahead funding for Carboneutre, a soil decontamination company with links to organized crime.

"I never, never, never received a kickback offer in all my years as president of the QFL," Arsenault said. "It would be easier for me, this morning, to say that I got an offer and I refused it. It would be a lot easier, but I won't lie in front of the commission."

He believes Periera might have misunderstood him. In the end, Carboneutre never got any money from the union's investment fund.

Arsenault expressed unhappiness that Periera has become a media star. He accused Periera of threatening him in some angry messages left by Periera.

Arsenault accused Periera of having a vendetta against the union and its construction wing stemming from an expense scandal involving Jocelyn Dupuis, one of the wing's directors.

Dupuis quit the wing of his own accord and was soon charged with racking up tens of thousands of dollars in fraudulent expenses in the span of a few months. The charges came after after Periera, who had exposed the expense scandal, alerted provincial police.

The former president said he didn't raise any alarms about Dupuis because it wasn't the place of the head of the province's most powerful union to rat out one of its own to police.

He argued that most private businesses would deal with such issues internally and that Dupuis' job loss was the ultimate indignity.

Arsenault insisted he didn't have any real power to fire anyone despite heading the province's largest union. The power to hire and fire lay with the individual unions — such as the construction wing — while the federation oversees the groups as a whole.

Despite his insistence that organized crime played no role at the union, a wiretapped conversation heard earlier Tuesday suggested that Arsenault was aware that organized crime was plotting to take over the union's billion-dollar investment fund.

Arsenault told the inquiry that he took the Mob warning with a grain of salt and never feared for his safety.

He says the notice came from construction magnate Tony Accurso, who told him about an attempt to usurp his position at the helm of the union and the investment fund because he wasn't pushing their projects.

Arsenault said he believes now that organized crime tried to access the fund through Jocelyn Dupuis, a former construction wing boss who was friendly with several people with criminal ties.

The former union boss said organized crime infiltrating the union's Solidarity Fund is the worst thing that could have happened.

But Arsenault said the push never materialized and he believes the fund is now insulated from organized crime's reach after changes to the structure and rules were made in 2009.

Arsenault held on to the presidency right up until his retirement last November and says in that time he was never offered a bribe and never accepted a kickback.

He said he didn't notify police when he received word about the infiltration attempt because he didn't feel his personal security was threatened.

"I've never woken up in the morning to check if there's a bomb underneath my car," Arsenault said. "I was never afraid, I took it all with a grain of salt."

Arsenault said he didn't believe in calling news conferences on the matter, wanting to save the image of the union and the fund.

"I never felt pressure from organized crime on me while QFL president," Arsenault said. "Otherwise, I would have told the police."

Arsenault has repeatedly defended the $9.7 billion fund, which he says has been a great boon for the Quebec economy.

Commission chair France Charbonneau sought to reassure the witness that no one thought otherwise.

"Nobody here believes that the Fund is not a good institution," she said.

Also Tuesday, the inquiry issued a mid-term report to the Quebec government. The 30-page report makes no recommendations, saying it's too early to do so.

Since it began its work in October 2011, the inquiry has heard 111 witnesses over 151 days, producing 37,500 pages worth of transcripts. The report indicates that witnesses were chosen from 1,152 people that were met in person and 82 others who they spoke with on the phone.

A final report is due in April 2015.

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