Honest man likely killed by corrupt competitors: Charbonneau witness

Serge Loiselle, 57, died Monday after being attacked in his home. (Nov. 16, 2011)

The owner of a construction company was likely beaten to death because he wouldn't participate in a corrupt system, said a witness at the Charbonneau Inquiry.

Serge Loiselle and his wife were attacked inside their Salaberry de Valleyfield home in November 2011, and Loiselle later died of his injuries.

He was the owner and president of Ali Excavation, a successful construction company that won contracts throughout the region.

But Gilles Théberge, a now retired manager of Sintra Construction, said Loiselle's success proved his undoing.

According to Théberge, Loiselle was an honest man who refused to take part in the widespread collusion that is rampant in Quebec's construction industry. His refusal to co-operate with other construction companies and artificially inflate prices meant Ali Excavation was easily able to win contracts, and undercut the profit margin of other companies.

Théberge said he believed that angered the leaders of other construction companies in the area, and suspects they arranged for the home invasion that killed Loiselle.

Arm-twisting by Laval's mayor

Théberge also told the inquiry that construction and roadwork companies in Laval didn't have any choice except to be part of a corrupt network.

The retired manager of the road paving firm Sintra has already explained how his car was blown up, and the extensive collusion network that spread throughout Laval and the surrounding area.

He said that former Laval mayor Gilles Vaillancourt directed this network, and met one-on-one with people who ran companies to lay down his law: co-operate with the corrupt system or move out of town.

According to Théberge, Vaillancourt said "If you want to live in Laval and work in Laval, you've got to join the system or else just sell your asphalt company and leave."

But the system was not limited to taking a cut from construction projects and funneling it to the mayor.

On Tuesday Théberge said that the Laval city hall employee who handled the day-to-day business of fixing contracts leaned on contractors for other donations.

Claude Deguise pressured companies to donate money for the Cosmodome, and contractors were also required to buy tickets for a lobster dinner fundraiser for the Marcel Vaillancourt Foundation.

Transport Quebec was ripped off

Theberge said that provincial bureaucrats were given gifts like fishing trips in order to get them to share privileged information about upcoming contracts.

The inquiry has already been told about rampant corruption of municipal officials but has only barely begun looking into activity at the provincial level.

It was told Tuesday that trips organized for Quebec Transport Department officials helped a Montreal road construction company reel in millions of dollars in contracts.

Theberge said that regional directors of the Transport Department benefited from salmon-fishing trips as well as steak and oyster dinners where tips on upcoming contracts were obtained.

Asphalt companies were seeking to split up their territories, basing the dividing lines on the proximity of contracts to their plants, Theberge told the commission.

Theberge said he was aware of collusion by companies in paving work but that didn't affect other construction projects run by the provincial ministry.

He said that his company courted mayors, regional transport officials and CEOs at dinners and recalled having lunch with officials from Montreal and several other smaller communities who told him about upcoming projects.

The information helped him to prepare his budget and he says it was passed on to other companies as well. He said it was all made public shortly after, in any event.

His testimony comes months after the inquiry heard that meals, hockey tickets, vacations and even prostitution services were offered to municipal bureaucrats around Montreal. This was in addition to illegal donations funnelled to municipal political parties.

Sintra is one of the dominant players in the asphalt sector and other work with the Transport Department, snagging at least $1.6 billion in contracts between 1997 and 2012, according to figures tabled by the inquiry.

It was followed in importance by DJL, which took in $1 billion, said Claudine Roy, a commission lawyer.

"We see that 50 per cent of these contracts is distributed to about 19 companies," Roy said. "Sintra got about a quarter of the contracts offered by the Transport Department."

Sintra got about $863 million of its total for paving work, followed by DJL, which got $518 million.

Theberge acknowledged that the Transport Department was Sintra's biggest customer, accounting for 60 per cent of its revenue.

He said the collusion did not explain a stunning increase in the price of asphalt in 2000.

The City of Montreal was hit with an 80 per cent increase in asphalt prices that year, with asphalt provided by Sintra, DJL and Simard-Beaudry costing the city $4.7 million.

A memorandum presented to the commission noted that there had been a "significant decrease" in the cost of asphalt in 1998 and tenders in 1999 reflect that. Tenders solicited in January 2000 reflects the increase from 1999.

He said the first meeting of the asphalt cartel he'd described only occurred in 2000.

With files from The Canadian Press