Canada

Photo: The Canadian Press. All rights reserved.

A lawyer arrives at the Charbonneau commission in Montreal, September 27, 2012, which is an inquiry looking into corruption and collusion in Quebec's construction industry. THE CANADIAN PRESS/Graham Hughes

A former construction boss has delivered groundbreaking testimony about a system of corruption in the industry that saw him pay Canada's most powerful Mafia family a 2.5 per cent cut on public contracts.

Lino Zambito told Quebec's corruption inquiry about a cartel-like operation lording over the construction industry in the province and he said he had no choice but to participate.

He described a system that drove up the cost of public works during his testimony Thursday, perhaps the most damning to be heard at the inquiry so far.

Only certain companies were allowed to bid for public contracts, he said. They would set their prices artificially high. They reached a group decision on who would submit the lowest bid. Then they took turns winning contracts, he said.

And when it was all said and done, he said, the Cosa Nostra claimed a percentage.

Zambito said that, as far as his own company was concerned, that fee was a 2.5 per cent share of the value of a sewer project, paid to the once-dominant Rizzuto family.

The burly 43-year-old businessman shrugged off a suggestion from an inquiry lawyer that he was paying protection money.

"I saw it as more of a business. Entrepreneurs made money and there was a certain amount owed to people of," he said and, pausing an instant before he completed his sentence, Zambito added, "the Mafia."

Zambito said he knew where the money, delivered through a middleman, ultimately wound up.

He even defended his personal ties to the Mafia.

Zambito said his family knew the Rizzutos from the old country and said they were part of the same tight-knit community whose members helped each other out as newcomers to Canada.

His testimony shed light on allegations made three years ago in media reports that triggered demands for an inquiry that is now underway in Quebec. That inquiry is probing links between the underworld, the construction industry, and political parties.

Zambito is the first person to describe, in such exhaustive detail and so publicly, his own personal involvement in construction-related wrongdoing.