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Gilles Surprenant, a retired engineer at the City of Montreal, testifies before the Charbonneau Commission on this image made off television Thursday, Oct. 18, 2012 in Montreal.Paul Chiasson

The Montreal city engineer known as "Mr. GST" for the bribes he levied has admitted he collected at least $600,000 in kickbacks on construction projects over half of his 33-year career.

In the most stunning moment yet in a public inquiry full of early cinematic twists, Gilles Surprenant described how he was threatened by a construction magnate and then bribed to push through his first vastly inflated contract in the early 1990s.

While Mr. Surprenant's personal role as corrupt senior civil servant is an important revelation, his testimony is also the first corroboration of a much wider scandal. Two sworn firsthand witnesses have now described how a system of rigged bidding, inflated contracts and bribes ran many major Montreal construction projects for years, and cost city taxpayers untold millions.

Mr. Surprenant alone has admitted to rigging at least 90 contracts from about 1990 to 2008, the year before he retired. He testified that his first fixed contract allowed the firm Construction Frank Catania to rake in some $500,000 to install a water main – a 100-per-cent markup on the original estimated cost.

Mr. Surprenant was a 39-year-old civil engineer in charge of putting together plans and estimates for sewer and water lines when several bids – all vastly inflated – came in for a project in Westmount.

Mr. Surprenant said his first instinct was to send the project back to tender, but a colleague in the city finance department told him to meet Frank Catania for dinner.

As the restaurant dishes were cleared, Mr. Surprenant said, the construction boss offered a number of "technical difficulties" the engineer could use to excuse inflating the original estimate. Mr. Surprenant said Mr. Catania left him with these chilling words: "Those who keep us from eating get tossed aside."

Some time later, the engineer said he took an envelope with $3,000 or $4,000 from Mr. Catania, and then added notes to the bid to explain away the cost overrun. A supervisor and the city's executive committee signed off on the change.

In his testimony, Mr. Surprenant was fidgety and hesitant. He tried at first to downplay the threat, saying he wondered at the time if Italian construction contractors just spoke like that. Later, as commission counsel tried to drag a motive out of him, Mr. Surprenant admitted he felt intimidated.

"I didn't know what to think. I felt sick," Mr. Surprenant said. "It taught me to respect construction entrepreneurs. To fear them."

Mr. Surprenant could not remember the name of the person who introduced him to the construction executive – a statement that was met with incredulity by inquiry head France Charbonneau.

Mr. Surprenant was known as "Monsieur TPS" – the French acronym for GST – for the "taxe pour Surprenant" he would collect on projects up until his retirement in 2009, former construction boss Lino Zambito testified previously.

Mr. Surprenant said coping with all that cash in secret at his suburban home was difficult. He didn't want to change his lifestyle and draw attention, although he did use cash to pay for his daughter's tuition for beauty school and for home renovations. He lost thousands on a bad investment with a construction company. He also gambled away $200,000, he said.

"I didn't know what to do with it," he said. "It was my way to put the money back into the state's coffers."

When investigators visited him in August, he handed over $122,800. "I was happy to get rid of it. It was a kind of liberation," he said.

Over eight days, Mr. Zambito accused a half-dozen city officials, political fund raisers and cabinet ministers of corruption and unethical conduct.

While Mr. Surprenant confessed to wrongdoing, the city's former top bureaucrat, Robert Abdallah, insisted on his innocence on Thursday.

Mr. Abdallah, who was named by Mr. Zambito as having taken kickbacks while he was Montreal's general manager, denied the allegation and threw Mr. Zambito's motives into question. Mr. Abdallah turned out a point-by-point denial, buttressed by official documents, casting doubts on the testimony.

Mr. Zambito testified that Mr. Abdallah demanded $300,000 in kickbacks through intermediaries for a Montreal public-works project.

Mr. Abdallah denied the claim, said he would co-operate with authorities to clear his name, and defied anyone to come forward and prove he had ever taken "one penny" while at the city.

"I will allow no one to put my integrity in doubt," he said.

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