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Rattled Montreal puts projects on hold in wake of corruption allegations

Montreal has suspended millions of dollars in new roadwork and other infrastructure contracts in the wake of explosive disclosures of corruption and Mafia involvement in the construction industry.

Mayor Gérald Tremblay, who has been personally tarnished by damaging testimony of kickbacks to his political party, announced that city hall was delaying $75-million in contracts for non-urgent work.

"I have a duty to protect the interests of taxpayers," Mr. Tremblay said in a statement.

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The move came in the fallout from the high-profile Charbonneau probe into Quebec's construction industry, which has heard details of rampant corruption and collusion. Montreal says it will halt new contracts until Quebec changes the rules forcing the city to award contracts to the highest bidder.

The announcement in Montreal came after days of withering testimony from Lino Zambito, a former construction boss and major contractor who outlined a system of payoffs and bribes tying a closed group of construction entrepreneurs, the Mafia, the mayor's municipal party as well as top city bureaucrats.

For a change, Mr. Zambito offered a positive effect of Quebec's anti-corruption efforts when he appeared before the Charbonneau Commission on Wednesday. As soon as the Charest government created the "Hammer" police anti-corruption squad in 2009 to turn up the heat on the building industry, the price of public works contracts fell by about 15 per cent, he testified.

He told the commission that once he no longer had to pay a cut to the Mafia, city bureaucrats or to the political party of Mr. Tremblay, he was able to participate in free competition for bids.

Mr. Zambito's testimony has also caused waves as far as Ottawa, where the NDP continued to hound the Harper government over its efforts in 2007 to appoint Robert Abdallah, the former senior bureaucrat at the City of Montreal, as president of the Montreal Port Authority.

Mr. Abdallah was linked earlier this week by Mr. Zambito to allegations of kickbacks in relation to a construction contract. While Mr. Abdallah has denied any wrongdoing, the NDP said there are now growing questions about "arm twisting" by the Prime Minister's Office in favour of Mr. Abdallah's candidacy.

"Key Conservative insiders promoted Robert Abdallah as their choice for the Port of Montreal," said NDP MP Charlie Angus. "Why do the Conservatives want him to get this prime patronage position?"

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The Harper government did not deny the PMO's involvement in the nomination process, but said that it was up to the Port's board to select its president and that the campaign in favour of Mr. Abdallah did not bear fruit.

"The gentleman in question did not get the post and we did not have the power to offer it to him," said Conservative parliamentary secretary Pierre Poilievre.

The opposition pointed out that Mr. Abdallah's candidacy was being promoted behind the scenes at the time by Antonio Accurso, a construction magnate whose name has come out at the Charbonneau Commission.

On Wednesday, 90 investigators from the Quebec revenue agency raided a series of construction firms that are part of Mr. Accurso's empire in relation to a long-tanding probe into allegations of tax fraud.

Mr. Accurso's firms have pleaded guilty to tax fraud in a case brought by the Canada Revenue Agency. However, the provincial agency is also interested in building a case directly against Mr. Accurso, and not only his firms, court records show.

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About the Authors

Ingrid Peritz has been a Montreal-based correspondent for The Globe and Mail since 1998. Her reporting on the plight of Canadians suffering from the damaging effects of the drug thalidomide helped victims obtain federal compensation and earned The Globe and Mail a National Newspaper Award, Canadian Journalism Foundation award, and the Michener Award for public service. More

Parliamentary reporter

Daniel Leblanc studied political science at the University of Ottawa and journalism at Carleton University. He became a full-time reporter in 1998, first at the Ottawa Citizen and then in the Ottawa bureau of The Globe and Mail. More

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