01/30/2014 12:51 EST | Updated 04/01/2014 05:59 EDT

Ex-union boss adamant no deal to force PQ to thwart corruption inquiry

MONTREAL - The man who once headed Quebec's most powerful union says he spent more time lobbying the governing Liberals than the Parti Quebecois as he tried to head off a corruption inquiry in 2009.

Michel Arsenault, who retired as president of the Quebec Federation of Labour last year, reiterated Thursday there was no "deal" with Claude Blanchet, the husband of Parti Quebecois Leader Pauline Marois.

Under questioning from the a lawyer representing the Quebec Liberals, Arsenault insisted that Marois, now premier, was never approached about blocking an inquiry.

And he was adamant that a business deal between the union's Solidarity Fund with a company once owned by Blanchet was not aimed at influencing Marois, who became premier in 2012.

"I talked to all my friends in the political parties, including the Liberal party," Arsenault said under cross-examination at the Charbonneau Commission, adding there was no way to predict in 2009 that Marois would become premier.

Arsenault testified he had a meeting with Marois at Club 357C, an exclusive, private club in Old Montreal that hosts some of the biggest political and business figures in the province.

However, he said the fund's business deal with Capital BLF, Blanchet's company, didn't come up.

"It was a political meeting, the goal was not to talk about her husband," Arsenault said.

He insisted he never raised the issue of blocking a corruption inquiry, even though Arsenault was overheard in a wiretap two months later talking about a so-called deal with Blanchet and discussing the possibility of talking to Marois.

"It was brainstorming," Arsenault repeated. "I never talked politics with Claude Blanchet, I never asked him to intervene with his wife."

Arsenault added the issue didn't come up either when Marois addressed a QFL meeting in October 2009. Her entourage had informed Arsenault's team the PQ was determined to have an inquiry.

"Pauline was like a wall," Arsenault said.

Under questioning from a PQ lawyer, Arsenault admitted he talked to several politicians, listing off various Liberal ministers.

Blanchet was a director at the Solidarity Fund between 1983 and 1997. He has not spoken about the business transaction, but a lawyer representing the PQ went through the details Thursday.

Arsenault has spent much of his time on the stand defending the $9.7-billion fund — a publicly funded investment arm he credits with saving or creating 500,000 jobs over the years.

Earlier on Thursday, Arsenault testified that he returned an expensive Christmas present his wife received from construction magnate Tony Accurso in 2008 — a $12,000 pair of diamond earrings — because he felt uncomfortable with the luxurious gift.

The former union boss also insisted he paid for every penny of renovationa worth $97,000 to his own home, even as wiretaps seemed to suggest that Accurso would be paying for part of it.

The wiretaps indicated Accurso was prepared to offer some help for the renovations but Arsenault ended up paying for it himself after media reported on a trip he had taken on Accurso's luxury yacht.

Arsenault denied the media scrutiny had anything to do with him paying for the renovations. He said he used a second mortgage to finance the renovation.

He said he also hired an evaluator to verify the bills after questions were raised about his expenses.

The Charbonneau Commission has been examining the QFL, the Solidarity Fund and the type of sway people tied to organized crime had with administrators of the union's construction wing.

Arsenault, who also oversaw the Solidarity Fund, has repeatedly been asked whether there was a conflict of interest in holding both positions.

He admitted there was an interest in pushing for Accurso's companies to succeed because the fund was heavily invested in them.

Accurso has since been charged with fraud and influence-peddling.

In another wiretap played at the commission Thursday, ex-Liberal cabinet minister member Tony Tomassi is heard asking Arsenault if he can help him with funding for a friend's business.

Tomassi explains the supermarket freezer company has fallen on hard times financially and could use a hand.

Arsenault promises to do what he can in the February 2009 conversation with Tomassi, who was subsequently forced to resign and is facing fraud charges. His trial is expected in the coming months.

Arsenault said he didn't have any true power to force deals through and that funding was never granted in the Tomassi case.

The Charbonneau inquiry will resume sitting Feb. 10.