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Prosecutor's office handed report on Quebec City hockey arena project

Quebecor Media Inc. CEO Pierre Karl Peladeau reads over his notes on Parliament Hill in Ottawa, Thursday October 20, 2011. A report into Quebec City's contract for a new hockey arena has been transferred to the provincial prosecutor's office following months of controversy surrounding the deal.THE CANADIAN PRESS/Adrian Wyld

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Quebecor Media Inc. CEO Pierre Karl Peladeau reads over his notes on Parliament Hill in Ottawa, Thursday October 20, 2011. A report into Quebec City's contract for a new hockey arena has been transferred to the provincial prosecutor's office following months of controversy surrounding the deal.THE CANADIAN PRESS/Adrian Wyld

QUEBEC - A report into Quebec City's contract for a new hockey arena has been transferred to the provincial prosecutor's office following months of controversy surrounding the deal.

The report by the province's lobbying commissioner, released Wednesday, said some organizations failed to register as lobbyists while they were negotiating a deal to name and operate the future arena.

That municipal contract was eventually awarded to the Quebecor media empire, which is now working to bring an NHL team back to the provincial capital 16 years after it lost the Nordiques.

The report released Wednesday said several organizations broke the law by not registering as lobbyists, or by registering too late.

"The lobbyists' registry is the vehicle for ensuring transparency, as set out in the law. It is its bedrock," the report said.

Some of those organizations—including Quebecor itself, along with virtual gaming company Aurifossor and insurance company Deux Rives—cannot be charged because the one-year statute of limitations has passed.

The report said Quebecor broke the law by registering too late. It said Quebecor president Pierre Karl Peladeau broke the provincial Lobbying Transpency and Ethics Act by failing to add vice-president Jean-Francois Pruneau to the registry. The company has received a warning.

Two other companies are accused of breaking the rules more recently and could face penalties: Bell Canada and Evenko, a company tied to the Montreal Canadiens and which was represented in the talks by former Habs president Pierre Boivin.

The Crown must now decide whether to seek penalties from them, including fines of up to $25,000.

The arena project was dogged this spring by accusations that it flouted municipal contracting guidelines.

When some opponents threatened to launch a court case against it, provincial politicians stepped in with a law designed to protect the deal from any legal challenge.

But that legislation proved divisive within the opposition Parti Quebecois, which saw some of its best-known members quit in protest against what they described as a legal abomination.

After the agreement in principle with Quebecor was announced earlier this year, the province's lobbying commissioner opened a formal investigation in June.

Quebec City Mayor Regis Labeaume said at the time that five other suitors, in addition to Quebecor, had expressed an interest in the contract to operate the $400 million arena.

The media organization issued a release Wednesday saying it had taken note of conclusion that it should have registered sooner.

But it said it had always been transparent, with good intentions, throughout the process.

The company said it had been clear from the start about its intention to bring a team to Quebec City, and that it registered as a lobbyist once a formal process was underway.

"Quebecor Media points out that no negotiations took place and no proposals were made before the registration on the registry on Aug. 10, 2010," the company statement said.

"Quebecor Media believes it therefore always acted responsibly and in good faith on this file, and that the negotiations ... took place between September 2010 and February 2011."

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