Quebec's inquiry into allegations of corruption and construction-industry wrongdoing has heard a tale of wrongdoing centred on Montreal under the mob's watchful eye. This is what we know so far
Police raids here, arrests there, allegations everywhere.
Quebec is at the centre of an unprecedented wave of corruption stories fuelled by media reports, a commission of inquiry and nitty-gritty police work.
The inquiry has heard testimony that the wrongdoing was centred in Montreal, under the watchful eye of the Mafia, and in the booming municipalities and suburbs to the north. The unfolding tale is complicated. But it’s also a universal story of greed feeding a complex web of construction bosses, politicians and government officials looking for extra profit or political donations.
Investigations are ongoing, and the Charbonneau commission has, at this point, heard from just one witness who was involved in the construction industry. More witnesses are to come. The public inquiry resumed this week, while the province’s anti-corruption unit will be sifting through boxes of documents seized in recent raids in Laval.
The Sûreté du Québec and the RCMP have charged more than 40 people so far in relation to allegations of wrongdoing in the construction industry and government, including elected officials, political organizers and civil servants. The matters have yet to be proven in court, but the cases deal with various allegations.
Here is what we know at this point in the unfolding scandal.
There are widespread allegations of kickbacks to government officials, including free construction work, hidden political donations, trips, meals and cash, in exchange for lucrative contracts. In particular, the inquiry has heard that construction firms frequently negotiated contract amendments to obtain payment for extra items that were at times entirely fraudulent and designed to obtain additional funds.
It is alleged that a group of construction firms used violence and threats, with the help of corrupt government officials and high-ranking Mafia bosses, to ensure that they were the only bidders on major contracts. At the Charbonneau commission, former construction boss Lino Zambito testified the principals at the firms colluded to choose which one of them would win a contract at an inflated price while ensuring the other members of the racket did not underbid them in the tendering process. The goal was to circumvent normal market forces, thus inflating the cost to taxpayers.
The Canada Revenue Agency in Montreal was allegedly infiltrated by tax officials who sought kickbacks in exchange for favourable rulings and turning a blind eye to undeclared revenues. One CRA official is accused of helping a construction firm avoid a tax audit that would have exposed a fake-invoicing scheme involving major construction firms. Mr. Zambito has testified that his firm signed fake contracts with other companies that paid him large amounts in cash to avoid taxes and make payoffs.
Mayor of Laval since 1989
One of the province’s longest-serving and most powerful mayors, Mr. Vaillancourt has faced little opposition over the years as head of the province’s second biggest city, which is home to many real-estate developers and construction firms. Mr. Vaillancourt is facing allegations that, while he was in charge, the city directed contracts to favoured suppliers. In addition, other politicians have said that Mr. Vaillancourt personally offered them envelopes of cash in his office as a way to win their allegiance.
When the police raided municipal offices in Laval this month, two residences belonging to Mr. Vaillancourt were targeted. The mayor has stated emphatically that he will not resign.
Mayor of Montreal since 2001
Never accused of any wrongdoing, Mr. Tremblay has come under fire for ignoring signs of widespread corruption and fraud in his administration and his municipal party. In particular, the Charbonneau commission has heard allegations that officials from Mr. Tremblay’s municipal party, Union Montréal, collected a 3-per-cent commission on major municipal contracts.
Mr. Tremblay has not yet said if he will seek re-election in 2013, although he has rejected calls for his resignation.
Montreal city councillor from 1986 to 2008
After his time in office, which included a stint as Mr. Tremblay’s right-hand man as chair of the city’s executive committee, Mr. Zampino worked for an engineering firm that had won major contracts over the years with the city. Shortly after he retired, Mr. Zampino came under fire for vacationing on the luxury yacht of construction boss Antonio Accurso while he was in office.
Last May, the police charged Mr. Zampino with fraud in relation to a real-estate development in Montreal in a sweep that also targeted a former political fundraiser dubbed Mr. Three-per-cent, Bernard Trépanier, and construction boss Paolo Catania.
Mayor of Mascouche since 1991
Mr. Marcotte was charged with fraud last April in connection with allegations of corruption in the awarding of construction contracts, alongside Mr. Accurso, another construction firm owner, a Liberal organizer, an engineer and a high-profile lawyer. Mr. Marcotte once vacationed on Mr. Accurso’s yacht.
Despite widespread protests at home, Mr. Marcotte has refused to resign or step aside during the criminal proceedings.
Mayor of Boisbriand from 2005 to 2009
In February, 2011, Ms. St-Jean was charged with fraud, alongside construction boss Lino Zambito and officials from engineering firms, in connection with allegations of corruption involving the construction of a new water-treatment plant.
Liberal MNA from 1998 to 2011
The former deputy premier and minister of municipal affairs received free Celine Dion and Madonna concert tickets from Mr. Zambito of the construction firm Infrabec. Mr. Zambito also organized fundraisers for Ms. Normandeau, who has denied any wrongdoing and said that the gifts did not sway her judgment.
The construction bosses
Current and former owner of dozens of businesses and construction firms, most notably Simard-Beaudry Construction Inc. and Louisbourg SBC.
Mr. Accurso’s firms are among a handful that have dominated the construction industry in greater Montreal. Construction entrepreneur Lino Zambito has told the Charbonneau inquiry that Mr. Accurso enlisted Mob godfather Vito Rizzuto to settle a dispute over a $25-million contract between himself and Mr. Zambito. (Mr. Accurso has denied the allegation, which is unproven.)
Mr. Accurso first came to public notice for his opulent yacht, the Touch, which was allegedly used to woo public officials and union bosses to favour his companies. Since then, Mr. Accurso’s enterprises have been raided repeatedly, Simard-Beaudry and Louisbourg have been convicted of tax fraud, and Mr. Accurso now faces charges including fraud, breach of trust and bribery over alleged bid fixing on contracts in municipalities north of Montreal, including Mascouche.
Controversies connected to Mr. Accurso reach beyond the construction industry. He hired Robert Abdallah, a former top bureaucrat in Montreal who departed in mysterious circumstances, for one of his companies after Mr. Accurso and prominent municipal and federal officials tried (and failed) to have Mr. Abdallah named head of the Montreal Port Authority.
Mr. Accurso announced this week he will retire from business.
President of Construction Frank Catania et Associés
The Catania family has been in the construction business since Frank Catania arrived from Sicily in 1962. The family business grew from landscaping to the major concern founded by his son, Paolo, in 1987. Former police investigator Jacques Duchesneau testified at the inquiry the Catania firm has thrived on insider information and fixed bids. In the spring, Paolo Catania and former high-ranking officials in the administration of Mayor Gérald Tremblay were arrested on charges of fraud, breach of trust and conspiracy in a $300-million land deal. The inquiry has seen surveillance video made in 2004 that captured Frank Catania sitting at a table with Nicolo Rizzuto as the Mob patriarch stuffed thousands of dollars in cash into his socks. The next year, several of Mr. Rizzuto’s associates chipped in to buy the senior Catania a retirement gift. At the time, the son explained to the media that Mr. Rizzuto and most of his top associates had the same birthplace as Mr. Catania, a small town named Cattolica Eraclea in Sicily. The inquiry has heard Mr. Catania’s firm and others routinely sent cash to the Mob.
Former owner of Mivela Construction
Mr. Milioto was a constant companion and go-between among the Mafia and construction companies, police say. Video surveillance shown at the inquiry captured Mr. Milioto making 236 trips to the Consenza Social Club in the early 2000s, often with cash that the Rizzuto patriarch, Nicolo, would divvy up. Mr. Milioto’s company won tens of millions of dollars worth of construction contracts, and like Mr. Rizzuto, he usually left the shabby café with cash stuffed in his socks.
The inquiry heard that the Consenza was for years the headquarters of the Rizzuto clan. Out front, Nicolo Rizzuto would sip espresso and gossip with friends, acolytes and criminal associates. But as 35,000 hours of RCMP videotape have shown, the real action took place in a nondescript back office, where a steady stream of money men would bring in cash to be split up among the Rizzutos and their captains. The name of the club was changed to Associazione Cattolica Eraclea a year before the RCMP swooped in as part of a crackdown in 2006. Today, the site is home to a clothing store.
Former owner of Infrabec
Even when his now-bankrupt company was at its height six years ago, Mr. Zambito was not among the biggest players in the cartels that ran Quebec construction. But he may now be their undoing.
With his trademark fat cigar, Mr. Zambito glad-handed at charity fundraisers in suburbs such as Boisbriand, accepting plaques for his good works. Mr. Zambito and Boisbriand officials now face charges of fraud over a contract to build a $28-million water-treatment plant. Mr. Zambito also pleaded guilty to charges under elections law for trying to dissuade candidates from running against the Boisbriand mayor.
Constructed for the Ministry of Transport, 2001-2004
Lino Zambito told the inquiry that Mafia boss Vito Rizzuto dissuaded his firm from bidding on a $25-million chunk of the contract so that Louisbourg, a firm belonging to Antonio Accurso, could win it. Mr. Zambito said he settled for smaller pieces of the project and the promise of “future considerations.”
AUTOROUTE 5O OVERPASS
(connecting Henri-Fabre Boulevard over the 50)
Constructed for the Ministry of Transport, 2004
Mr. Zambito described meeting with Construction CJRB and ABC Rîve-Nord to decide who would do the contract. He said he offered sub-contracting work to CJRB, and paid $150,000 cash to ABC Rîve-Nord, a company that David Whissell had co-founded before he became a provincial Liberal cabinet minister. While Mr. Whissell was in government, he left the running of the company to associate Claude Chagnon, but still had his ownership stake.
SHERBROOKE STREET EAST SEWER MAIN
City of Montreal, 2005
Mr. Zambito testified that the contract was above board and free of the usual collusion until engineers from a private firm contracted by the city forced him to buy sewer pipes that were $300,000 more expensive than the ones he had planned to use. The request was made on behalf of former city manager Robert Abdallah, according to Mr. Zambito’s testimony. Mr. Abadallah has denied he favoured certain companies to supply material.
SEWER AND WATER MAIN, DUKE STREET
(between De la Commune Street and Wellington Street)
City of Montreal, 2004
While bigger contracts have made headlines, this was more typical of the dozens of deals Mr. Zambito says he helped fix in the city of Montreal. When the city made a call for tenders to replace water and sewer pipes, Mr. Zambito said he told other bidders his price was set at $1.6-million. Potential competitors bid higher, allowing him to win the contract and kick back money to city officials and the Mob, he said.