Zambito implicates Laval mayor, parties at corruption inquiry

A star witness at Quebec's inquiry into corruption in the construction industry took direct aim at the longtime mayor of Quebec's third-largest city Monday, testifying that he had to pay off Gilles Vaillancourt before his now-bankrupt company Infrabec could win a contract in Laval.

Former construction boss Lino Zambito was back on the stand for a sixth day at the Charbonneau commission, which resumed its hearings after a weeklong break.

Zambito testified the system of collusion in Laval was well-entrenched. He said construction entrepreneurs were expected to give a "cut" worth 2.5 per cent of the value of each contract to Vaillancourt, mayor of Laval since 1989, through an intermediary.

He testified that, much like what happened in Montreal, when he first started inquiring about obtaining contracts in Laval in the late 1990s, he was told to go away. Zambito said he persisted, and eventually Vaillancourt approached him at an event to confirm a contract would be coming his way.

Zambito also said he was later told by an intermediary that if he wanted "extras" for cost overruns to be authorized, he would have to hand over $25,000 in cash, destined for the mayor.

Zambito made the same allegation in a recent interview with the CBC's French-language service — a charge vehemently denied by Vaillancourt, whose office and homes, as well as other city buildings, have been the target of recent raids by investigators with the province's anti-corruption squad.

'Web of lies,' says Laval mayor

None of Zambito's allegations have been proven in court.

The mayor's office once again Monday denied Zambito's claims. Through his spokesperson, Vaillancourt said he was furious, calling the allegations "a web of lies" and denying that he ever met Zambito at a restaurant to promise him a construction contract nearly a decade ago.

Vaillancourt's political opponents, none of whom have a seat at Laval city hall, have called for the provincial government to act on the allegations.

The leader of Le Mouvement Lavallois, David De Cotis, demanded the government suspend for now its financing of a $120-million, 10,000-seat sports complex, slated for construction in the coming months.

Illegal donations went to all parties, Zambito says

Earlier Monday, Zambito testified that illegal political party fundraising was widespread in the province and not limited to the province's Liberal Party.

He said he funnelled $88,000 over the last decade to several provincial and municipal political parties, mostly through family, friends and business associates.

Zambito testified that he contributed $30,000 — 10 times the legal donation limit at the time — to a Quebec Liberal Party fundraising event for then senior minister Line Beauchamp, at the behest of her former husband, who was a longtime Liberal organizer.

He said he paid the money to Pierre Bibeau, current vice-president of communications for Loto-Québec, in cash in the days following the event, and estimated about 20 people attended the fundraising breakfast for Beauchamp.

Zambito said several close friends, including engineers and others in the construction industry, allowed him to make donations in their names. Zambito said he later reimbursed them.

Bibeau issued a news release on Monday evening denying every allegation made by Zambito.

Beauchamp's former husband said he would hold off on taking legal action until after Zambito's cross-examination at the commission.

"I am convinced that the commission will make the difference between what is true and what is false," said Bibeau.

'I fixed contracts,' Zambito tells inquiry

Zambito expressed remorse for putting his friends and family in an embarrassing position. He said some of the people who found their names on a public donors' list had no interest in politics, but he urged them to participate.

In a dramatic moment of testimony, Zambito blamed a broken system that he says puts unfair pressure on politicians to raise money and on people in the construction industry to deliver it.

'If you don't follow the system, sell your equipment, close your offices, and go work in another industry.' —former construction boss Lino Zambito

"I was not an angel. I fixed contracts. I financed political parties. I corrupted bureaucrats. But the system works in such a way that if I wanted to work in Laval, Montreal, or on the north shore for the [Transport] Ministry, I had no choice but to act in that fashion," he said.

Zambito's construction company, Infrabec, went bankrupt in 2011.

He said Monday he is relieved he is no longer in the industry.

"It's difficult," Zambito testified.  "It's a system that's deep-rooted and leads you to do business in a way that often goes against your principles.

"But — I repeat, it's important — if you wanted to work ... you had no choice but to follow the system. To be precise, if you don't follow the system, sell your equipment, close your offices, and go work in another industry."

"Today I have no regrets that I'm no longer part of that system."

Municipal bidding described as cartel-like

At the municipal level, Zambito described a cartel-like structure that colluded to pick who would win public construction contracts.

He said the system included bribes for municipal officials, kickbacks to certain political parties and a percentage claimed by the Mafia.

Zambito said in 2009, he handed over somewhere between $25,000 and $30,000 in cash directly to Benoît Labonté, then leader of the Montreal opposition party Vision Montreal. He said the exchange happened at a Laval restaurant.

He was not legally allowed to make contributions to Montreal political parties, because he was not a resident of the city.

9 firms colluded, Zambito says

Later Monday, prosecutors at the Charbonneau inquiry walked Zambito one by one through 50 contracts his former firm Infrabec bid on for Quebec's Transportation Ministry.

Zambito said certain contracts were deliberately fixed.  

He gave the example of one case, in which Infrabec got the contract once it came up with $150,000 in cash for Claude Chagnon, a former business associate of former Liberal cabinet minister David Whissell.

Whissell  was forced to resign from his post as labour minister in September 2009 over controversy surrounding his stake in the asphalting firm he owned with Chagnon, ABC Rîve-Nord.

Zambito said most of the contracts awarded by the ministry in the Greater Montreal region went to nine entrepreneurs, whom he described as the main players in a system of collusion.

He named Construction Louisbourg, Simard-Beaudry, Cintra, Asphalte Desjardins, les Entreprises Claude Chagnon, GTS Group, Construction DJL, EBC Inc. and Demix.

Zambito said political party fundraising also played a role in dealings between these construction companies and certain engineering firms, which gave the construction entrepreneurs privileged information to help them win contracts.

Zambito said the engineering firms often had to fulfill fundraising goals for political parties.

"To my knowledge, engineering firms had orders they had to fill for the various political parties, or there were amounts that the engineering firms had to come up," Zambito explained, adding they never took the money from their own pockets.

Instead, they sold tickets for political fundraisers for as much as $5,000 a head.

He also said they partnered up with the entrepreneurs they were working with — authorizing what he called "fake extras" and then taking a cut of as much as 25 per cent of that money.