It’s been whispered about for years, but now the government’s anti-corruption squad says it has proof that organized crime has infiltrated the construction industry and influenced political parties.
The report by former Montreal police chief Jacques Duchesneau and Quebec’s anti-corruption squad and obtained by Radio-Canada and La Presse comes after a year-and-a-half-long investigation.
The UPAC (Unité permanente anticorruption) report, which does not name any firms or individuals, found that prices are regularly hiked by engineering consulting companies and that contractors regularly overrun their costs.
It said Quebec’s Transportation department is laidback about challenging prices, and when it challenges an invoice, the companies often launch a civil suit because they are aware the department will often settle out of court.
Even more damning, the report alleges that Transportation Ministry employees were paid to provide companies with privileged information so those businesses could win government contracts.
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Radio Canada released the report in its entirety Thursday evening on its website.
“We have discovered a deeply-rooted and clandestine universe, of an unsuspected scope, that is harmful to our society – in terms of security, the economy, justice and democracy,” the report states.
It claims the road construction industry is run by “a small circle of professionals and business people who specialize in bending the rules in place to enrich themselves at the expense of taxpayers.”
However, it is admitted in the report that the extent of organized crime’s involvement in the industry is difficult to gauge.
“A large number of Quebec construction businesses maintain links with criminal organizations,” it states. “We therefore strongly presume that some among them have an influence on the contracts handed out by the government, and that they have even set foot on the (transport) ministry’s work sites. Even though it is impossible to evaluate the extent of it, we can suspect how much the mafia exerts a presence and its influence in the construction industry.”
Quebec report sheds light on ‘corruption and collusion’ (Globe and Mail):
The report, which was leaked to some media outlets, said that organized crime, biker gangs, construction companies and engineering firms conspired to inflate the cost of road-building projects, devising schemes that also involved kickbacks to political parties.
Cost overruns were planned and became common practice in the industry, according to the report. “Cartels” consisting of the Mafia, biker gangs and construction companies conspired to eliminate competition and manipulate the public-tendering process.
“The suspicions are persistent to the point that a criminal empire was on the verge of being consolidated in the area of road construction,” Mr. Duchesneau wrote in the report’s preamble.
Close ties between Mafia-controlled construction companies and engineering firms and political parties were particularly worrisome, the report said.
“The more contracts they get, the more they give; the more they give, the more influence they have; the more influence they have, the more contracts they get. And the influence is exercised everywhere whether it is by becoming members of foundations or doing fundraising for charity organizations. They become almost untouchable,” a former political aide told the investigators.
The report suggests the Transportation Ministry has lost control over roadwork projects by contracting out work to private firms. In doing so, it said, the ministry lost the expertise to supervise the projects properly, allowing collusion and influence peddling to become rampant.
In one example cited in the report, engineers would say 1,000 truckloads were needed to remove contaminated soil from a construction site, knowing that 100 would do, and the unused money would find its way into the pockets of crime organizations, engineering firms and political parties.
“The Ministry of Transportation has no means to sanction engineering firms who make up wrong cost evaluations and poor plans,” the report stated.
New transport minister won’t release damning document (Montreal Gazette):
A new era of transparency was promised by Pierre Moreau when he took over as transport minister.
But, a week into the job, Moreau has refused to make public a damning report into collusion in Quebec’s construction industry that points the finger at organized crime, construction and engineering firms, Transport Quebec and political parties.
An anti-collusion squad led by former Montreal police chief Jacques Duchesneau prepared the report. Transport Quebec hired him in 2010 to investigate allegations of price-fixing and influence peddling in road contracts.
A handful of media outlets have obtained and published excerpts of Duchesneau’s report. But few have read the entire 78-page document.
On Thursday, Moreau told reporters that when he promised more transparency, he was referring to inspection reports – not a document to be used in criminal probes.
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