Quebec corruption crackdown yields 10 arrests

Four still sought in what police call a vast construction industry money-laundering operation run by the Hells Angels

RHÉAL SÉGUIN

QUEBEC From Wednesday's Globe and Mail

Quebec police continued their crackdown on corruption in the province's construction industry yesterday, arresting 10 people allegedly tied to what authorities say is a vast money-laundering operation headed by the Hells Angels biker gang.

Another four individuals were being pursued by police, including the purported head of the scheme, Hells Angels member Normand Marvin Ouimet. According to police, Mr. Ouimet had been trying to take control of masonry companies by using threats, intimidation and extortion. The plan, police say, was to create a consortium of masonry companies as part of a conspiracy to corner the market and help the biker gang launder drug money through false consulting contracts for construction projects.

Police seized more than $9-million in financial assets, including homes, bank accounts and building projects, as part of an investigation that began in 2007. Among the suspects are a union representative, businessmen and building contractors. Accountants and real-estate agents were part of another scheme, police say, to use land development projects to launder dirty money as part of a web of illegal activities plotted by the biker gang. Portfolio managers allegedly were used to funnel the money to overseas bank accounts. A total of 147 charges have been laid against the individuals.

Sûreté du Québec Inspector Michel Forget said it was the biggest money-laundering operation ever encountered by the police, and that there was more to come.

"This is not the end of our intervention," Mr. Forget said yesterday. "Other elements are still under investigation for which we cannot comment since the police work is not completed. This is only the beginning.

Last week, the government launched what it called Opération marteau, or Operation Hammer, beefing up a staff of police and prosecutors to examine ties between the mafia, municipalities and construction entrepreneurs.

The Charest government, which has stubbornly resisted public pressure to launch a full public inquiry into corruption in the construction industry, was relieved by yesterday's police action. For the Liberals, the arrests confirmed the government's decision to leave the matter in the hands of the police rather then undertake a public inquiry that could take months to produce results.

"Just today arrests were being made ... about 15 people were arrested today," Government House Leader Jacques Dupuis said in the National Assembly. "We are taking action immediately to avoid perpetuating this type of behaviour."

Earlier in the day, Treasury Board president Monique Gagnon-Tremblay unveiled tougher rules governing the public tendering process for government contracts.

"We want to make sure that the government deals only with honest companies," the minister said in a news conference, adding that any company involved in price rigging, collusion, influence peddling or other corrupt activities will be barred from dealing with the government.The latest government figures showed that in the 2006-2007 fiscal year, the government, as well as Crown corporations, awarded 328,000 publicly tendered contracts for a total worth of $18.9-billion. That amount was expected to have grown dramatically with the introduction of a multibillion-dollar provincial infrastructure program in 2008.

The Parti Québécois called the measures a "smoke screen" in order to camouflage the Liberal Party's ties to the construction industry. PQ Leader Pauline Marois accused Mr. Charest of protecting his party's "covert interests" rather than standing up to defend the reputation of the City of Montreal. The city has been at the centre of allegations of influence peddling, price rigging and collusion involving city contracts and construction firms.

"It has left the impression that Quebec, and in particular the City of Montreal, was part of a corrupt system. The Premier's only duty is to correct that impression, to correct that image through an independent public inquiry," Ms. Marois said.

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