Gilles Taillon is shown in this file photo. THE CANADIAN PRESS/Jacques Boissinot

The political scandals that have rocked Quebec mushroomed Tuesday with the new leader of the province's Action democratique party suddenly announcing his resignation and declaring his intention to report alleged financing irregularities to the police.

A mere 23 days into his reign as ADQ leader, Gilles Taillon dropped the bombshells at a hastily convened news conference.

No sooner had Taillon stormed out of the room, there was more: a Liberal member of the provincial legislature resigned to sit as an Independent while police investigated the transfer of a cash-stuffed envelope, which he says was intended for another politician.

Tuesday provided dramatic developments after months of successive scandals that began at Montreal's city hall, with initial reports of cost overruns in municipal construction projects and cosy ties between local politicians and company bosses.

Those were followed by reports of Mafia involvement in the construction business, and allegations that construction money was illegally funding political parties at higher levels of government.

Now the ADQ is calling the police on itself.

With high-placed connections in Quebec and Ottawa, the Action democratique's woes will surely generate plenty of attention.

One of those connections in Ottawa is Conservative Sen. Leo Housakos - described in one of his corporate bios as the ADQ's chief fundraiser from 2001 to 2008. He was out of the country, but his office issued a statement late Tuesday saying Taillon was free to contact police if he had any concerns.

Earlier in the day, Taillon told a news conference he was quitting. He did not explicitly explain why he was leaving, although the party has been crippled by infighting and Taillon has been battling prostate cancer.

Taillon did say that, upon taking over the ADQ leadership Oct. 18, he discovered irregularities with the party's finances. He did not elaborate and did not take questions after his announcement.

But he did say the police should be involved.

"I've discovered what I would call certain aspects of the management of the party's finances since 2003 that are a bit troubling," Taillon said, before walking away.

"I intend to push my observations further and will probably demand a meeting with the authorities at the Surete du Quebec (provincial police)."

Taillon's comments on the ADQ financing come a few weeks after the party announced it would cut off ties with members of the Conservative party, including Housakos.

Housakos has been a senior Conservative organizer and was president of the ADQ's fundraising commission before quitting the job in December after a debacle at the polls that saw the party reduced to seven seats.

Shortly thereafter, Housakos was named a senator by the prime minister.

In recent weeks, Housakos has made headlines in Ottawa and subsequently asked the Senate Ethics Officer to look into the matter of a $1.4-million stimulus contract going to a Montreal engineering firm where he once worked. Housakos says he worked for a subsidiary of the firm and had absolutely no role in it winning the bid.

Questions to the federal Tories were swiftly redirected to the provincial arena.

A spokesman for Prime Minister Stephen Harper was asked for comment Tuesday and replied: "You may wish to contact the ADQ since this concerns them."

Housakos's office issued a similar statement: "Mr. Taillon is the leader of the ADQ and as leader of the party, he's responsible to do as he sees fit. If he does have any concerns about any matter, he can contact the proper authorities."

A former ADQ president said any questionable practices were news to him.

"I don't know what (Taillon's) making allusions to, but if he has information he should give it to the proper authorities," said Yvon Picotte, a former provincial Liberal who served as ADQ president from 2004 to 2006.

"At least under my reign, the finance issue was taken care of by the director general of the party, the party treasurer and the party leader."

Picotte said when he took over, the party was $1.2 million in deficit and the party was struggling to get a financial institution to loan it money to finance an election campaign.

"I'm surprised at (Taillon's) declaration because when you're in deficit by almost $1.3 million, people aren't lining up to steal that," Picotte said.

The ADQ is currently fighting for survival following spectacular squabbling and resignations from its already-thin caucus.

Taillon was elected by the thinnest of margins on Oct. 18 after a bitter leadership race, barely outlasting Eric Caire by two votes.

He said he will remain leader until a successor is chosen but will not run in the race, one of his associates said.

Caire and Marc Picard quit the party last week, reducing the ADQ caucus to just four seats in the 125-member national assembly. Another member has also hinted he might resign.

Party president Mario Charpentier resigned this week amid reports he violated his neutrality by contributing to Taillon's leadership campaign.

Caire, in a separate news conference Tuesday, stressed that he would not be returning to the ADQ even with a new leader.

In response to a reporter's question about what role Housakos played in the party, Caire simply replied that the senator was not involved in his leadership campaign and did not raise money for him.

He said word of financial irregularities came as a surprise to him.

A Quebec provincial police spokesman said he could neither confirm nor deny that an investigation was underway into the ADQ's financing.

But a spokesman for Quebec's chief electoral officer said if Taillon has anything to say about party financing, he should come forward.

There was more fundraising-related mud in Quebec politics Tuesday. Another resignation came just minutes after Taillon's news conference.

A new Liberal member of the legislature, Jean D'Amour, told a news conference he was leaving the party caucus pending a police investigation into a cash-stuffed envelope he received.

D'Amour, who is also party president, says the move is temporary after he contacted police investigators linked to Operation Hammer, a widespread investigation into the Quebec construction industry.

D'Amour says he was handed $500 in a brown envelope in 2007 from a contractor, and he says it was destined for another municipal politician.

But D'Amour said he returned the money and that's why he only reported the incident more than two years after it happened.

D'Amour was elected to the legislature last June in a byelection called to replace former ADQ leader Mario Dumont.