MONTREAL – Quebec’s construction inquiry has witnessed its first political bombshells, with a witness testifying Monday about systemic corruption at Montreal city hall and the mayor’s political party.
An ex-construction boss says that, for years, three per cent of all the contracts he received from the City of Montreal went to the political party of Mayor Gerald Tremblay.
He says he was informed about the fundraising system by Nicolo Milioto — the same man seen on police surveillance video divvying up piles of cash with the head of the Sicilian Mafia in Canada.
The allegation comes from Lino Zambito, a former corruption boss who has become the star witness of the inquiry so far. He has described bid-rigging in the construction industry during earlier testimony but has only just begun talking about the political world.
He said today that another percentage point of contracts went to a city official. There was a running joke that the official claimed a one per cent “GST” — the name being a tongue-in-cheek twist on the French-language acronym for the federal sales tax.
It was apparently named for, and by, a high-ranking and now-retired local official, Gilles Surprenant, according to Zambito.
“He picked the name himself,” Zambito said.
“TPS meant Taxe Pour Surprenant. At the time, it was one per cent of the value of the work.”
This marks the first time that a specific political party and its fundraising activities have been singled out for wrongdoing at the inquiry, which began this spring.
The inquiry is looking into corruption in the construction industry, and its ties to organized crime and political parties.
The inquiry has now heard about a one per cent bribe to a local official; a three per cent bribe to a political party; a 2.5 per cent cut Zambito says he paid to the Mafia; and a cartel system that drove up construction costs.
A police witness has testified that the system drove up construction costs by up to 30 per cent, although he said public scrutiny following recent scandals has wound up reducing the cost overruns by half.
Zambito faces a series of criminal charges that he says destroyed his construction business, making it impossible for him to get financing. He now runs a pizzeria.
He has been elaborate in sharing details about wrongdoing in the industry and, now, with allegations about impropriety in official circles. Zambito had a subtle smirk on his face as he announced alleged details of the so-called “TPS” tax.
He was far more guarded when asked about his Mafia ties. Zambito has conceded paying a stipend to the Mob, but downplayed his personal ties to mobsters even while being shown surveillance video of himself milling about a Rizzuto family Christmas party.
The mayor is expected to react to the testimony today.