The inquiry into corruption in Quebec’s construction industry heard allegations of political corruption for the first time Monday, specifically that money from contracts went to the political party of Montreal Mayor Gerald Tremblay.
Lino Zambito, a former construction boss, testified Monday that three per cent of all contracts he was awarded by the City of Montreal went to Tremblay’s party, Union Montreal.
Zambito told the inquiry that he began making the payouts in 2005, and the money was earmarked for Tremblay’s re-election campaign, CTV Montreal’s Stephane Giroux reported.
Zambito said he handed the cash over to Nicolo Milioto, who had informed him of the political fundraising system. Milioto, a construction boss himself who has been identified as a liason with Montreal’s Rizzuto family, can be seen on police surveillance video sharing piles of money with Quebec mobsters.
“(Zambito) said that money kept going to the same person, Milioto, collecting that money for the Mafia, which was then redistributed to the interested parties,” Giroux reported.
According to Zambito, contractors were initially unhappy about the arrangement, but came to consider it as part of the cost of doing business with the city, Giroux said.
Zambito said Monday that “everyone knew about” the kickbacks.
"People knew about it at the city,” Zambito said. “The business people knew about it. The suppliers knew it... (It was) business as usual... There was wilful blindness. It was accepted."
Zambito said he did not know who Milioto gave the money to at Union Montreal.
"Who did he meet with? Who did he see? Where did it go? I don't know,” he said.
Last spring, Quebec provincial police arrested several members of Tremblay’s entourage, including his chief fundraiser Bernard Trepanier, who was known by the nickname “Mr. Three Per Cent.” It is unclear if he was the point man between Milioto and Union Montreal.
The explosive allegations had the opposition in Montreal calling for Tremblay’s resignation.
"The time for Gerald Tremblay's resignation has arrived," said Coun. Louise Harel.
"He has lost his legitimacy... Montrealers can't take this anymore."
Coun. Richard Bergeron said if the mayor stays in his post, each day in office ahead of next fall’s municipal election will be tainted.
“Today we have direct testimony from one member of these networks who said three per cent went to Union Montreal,” Bergeron said. “I saw enough is enough. Gerald Tremblay has to resign right now.”
However, Tremblay told reporters that his “conscience is at peace.”
The mayor said Quebec’s elections watchdog has pored over his party’s finances and never raised any concerns.
“As far as the financing of our political party, Union Montreal, the director general of the elections verified on a regular basis our financial statements and found no wrongdoing,” Tremblay said.
Tremblay said he would only comment on the allegations when the inquiry is completed.
Zambito made further explosive allegations Monday, saying that another one per cent from the construction contracts was handed over directly to a city official.
Zambito said the official, Gilles Surprenant, named the payout TPS, or Taxe Pour Surprenant, a take-off on the French acronym for the GST.
"He picked the name himself," Zambito said.
It is alleged that Surprenant took the one per cent to favour construction companies during the call-to-tender process for new contracts. Surprenant set budgets for city projects, and Zambito said all kickbacks to him were paid in cash.
Zambito estimated that his company paid Surprenant between $100,000 and $200,000.
Zambito also alleged that city engineer Luc Leclerc authorized cost overruns of construction projects in exchange for a 25 per cent commission.
Zambito had previously told the inquiry how construction companies worked together to decide in advance who would be awarded city contracts. Zambito had previously said that he paid 2.5 per cent of his construction contracts to the mob.
However, this is the first time he has made allegations of political corruption.
Zambito alleged Monday that construction bosses like him bestowed gifts upon city officials, including high-priced dinners and even a Mexican holiday.
According to Zambito, the system began to change about three years ago, when allegations of widespread corruption hit the news. Many city engineers retired when a special police force was established to probe the allegations, he said.
The inquiry is investigating corruption in Quebec’s construction industry, and links to organized crime and politics.
A police witness has told the inquiry that bribes and a rigged tender process elevated construction costs in the province by as much as 30 per cent.
Zambito’s own business collapsed in 2011. He now runs a pizza shop and faces criminal charges, but has downplayed his own ties to the Mafia.
With files from The Canadian Press and reports from CTV Montreal’s Stephane Giroux and Aphrodite Salas
