Canadian construction Mafia links exposed

An inquiry into corruption in the construction industry in the Canadian province of Québec has heard an explosive testimony from a former industry executive, detailing collusion, kickbacks and links to organised crime.

Lino Zambito, former vice president of Infrabec Construction, testified on 27 September at the Charbonneau inquiry - the investigative arm of the Charbonneau Commission, which was set up last year in response to concerns about public procurement in Québec's construction industry.

Mr Zambito admitted his company had colluded with other contractors for years to rig bids for public works contracts at inflated prices, and also paid security money to the Mafia in Québec.

"The way to do it was when the project was allocated to you, between the companies in an alternating way, the winner had the responsibility to call the others and to tell them the amount at which they should submit their bids, to ensure that we were the lowest conforming bid," Mr Zambito told the inquiry.

Mafia 'fee'

Québec's mafia consist of powerful branches of organised criminal families - Mr Zambito said they oversaw the anti-competitive activity in the construction industry in exchange for a cash 'fee'.

Montreal Police Lieutenant Detective Éric Vecchio also testified before the inquiry, and said construction companies typically paid a 'tax' in the form of cash stuffed envelopes averaging around 5% of the contract value to the mafia to ensure the deal went smoothly.

"This is not a bank, it is not an institution... This is not someone who gives you a March 1 invoice," Mr Vecchio said.

"It is a tax - it is given so that it works well. It buys protection, peace and influence so that certain people could get to certain others in positions of authority. The suggestion is, although it is not always the case, that the people contributing the tax become untouchable."

Evidence in the form of surveillance tapes recording cash payments to mafia figures was also presented to the inquiry.

Mr Zambito and his father, Infrabec president Giuseppe Zambito, were arrested in 2011 and face criminal charges alleging widespread collusion in the bidding for public construction contracts.

In May this year, nine more people were arrested on similar charges, including Frank Zampino, a former chairman of the city's Executive Committee (government executive branch) and one-time close advisor to Gérald Tremblay, who has been mayor of Montreal since 2002.