MONTREAL - Quebec's corruption inquiry has exploded onto the provincial stage with allegations of illegal political financing by the recently defeated Charest Liberals, the same party that reluctantly called the probe.

After having already alleged rampant kickbacks, Mafia ties and bid-rigging at the municipal level, a star witness has now made scathing accusations of influence-peddling under the ex-Liberal government.

Former construction boss Lino Zambito says he organized a lucrative fundraising dinner in 2008 featuring then-deputy premier Nathalie Normandeau, which he says raised $110,000, and that he funnelled donations through third parties to keep the contributions within the legal limit which was then $3,000.

He says he suggested his plans to a prominent Liberal bagman.

"I said: 'I want to invite about 20, 25 people and raise $100,000.' (The organizer) told me, 'Don't forget — the law doesn't allow a donation of more than $3,000 per person,'" Zambito said.

"I said, 'That's fine.'"

Zambito explained how he got around the law: middlemen. In one example he cited, he asked the vice-president of his since-bankrupt construction company to write a personal cheque which he promised to reimburse through their business.

When told by an inquiry lawyer that the Liberals ultimately claimed $77,500 on their official books from that January 2008 event, Zambito said he had no explanation for the discrepancy.

Zambito made the allegations in testimony last week that was delivered under a publication ban at the inquiry, which is examining criminal activity in the construction industry and its ties to political parties and organized crime groups like the Mafia.

That publication ban was partially lifted Tuesday.

Zambito was apparently no stranger to Normandeau, who was municipal affairs minister at the time in addition to being deputy premier. She has since left politics.

He said he gave the deputy premier 40 red roses on her 40th birthday; hosted her and members of her entourage at a Celine Dion concert at Montreal's Bell Centre; and gave her tickets to a subsequent Madonna show, although he's unsure if she ever used them.

Zambito says it was a surprise incident that showed him how lucrative it might be to get on the governing party's good side.

In 2007, he says he was approached by someone in the entourage of then-cabinet minister David Whissell — who owned a family construction business and later left cabinet amid a conflict-of-interest controversy.

He says that person solicited a $50,000 cash payment to a Liberal fund in exchange for help with a business problem. He added that the person worked for a major engineering firm and, in a hint of testimony to come, Zambito has said such firms were instrumental in illegal campaign financing schemes

Zambito says the cash request was quickly withdrawn when he complained to a senior party figure, and his business problem was abruptly solved anyway.

He says the issue was resolved during a meeting with longtime Liberal power-broker Pierre Bibeau, who made a phone call to one of his sons who was the top official in Whissell's office.

Zambito says he was thrilled.

"I said (to Pierre Bibeau): 'Is there anything I need to do?' " Zambito recalled.

"He told me, 'Listen, it's settled. Eventually, when I need you, I'll call upon you. Consider this a favour.'"

The fundraiser for Normandeau was organized several months later.

Ex-premier Jean Charest called the current inquiry in 2011 after two years of public pressure; Zambito's testimony is the first to scorch the Charest Liberals.

Zambito has already testified he participated in a cartel that rigged bids, driving up the cost of construction in Montreal.

He has said some of those extra proceeds paid a 2.5 per cent commission to the Mafia; a three per cent kickback to the Montreal mayor's political party; a one per cent payment to a corrupt municipal functionary; and endless other bribes to civil servants.

Earlier last week, Zambito warned that the corruption extended far beyond Montreal and he said he would offer plenty of details about shady political financing and corruption. He began delivering on that promise later last week, under the publication ban.

The testimony so far has only peripherally dragged in the federal government.

Zambito testified he was informed some of the proceeds from Montreal construction collusion were to go to Robert Abdallah, the former city manager.

Abdallah had ties to the federal Tories — with the office of Prime Minister Stephen Harper even promoting him as its preferred candidate to become head of the Port of Montreal.

There was resistance to Abdallah's appointment, and he ultimately did not get the job.

None of Zambito's allegations have been proven in court. However, even as he testified, the scandal spread.

The provincial police anti-corruption squad raided the office and two residences belonging to Laval Mayor Gilles Vaillancourt. Meanwhile, in Montreal, the local police-officers' union urged the mayor there to step aside because he had lost the credibility to lead the force.

The city administration has dismissed the demand and demanded a retraction from the union, which is currently involved in contract talks.

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  • Quebec's corruption inquiry has heard an exhaustive history of the Italian Mafia -- how it was created, how it got into the construction business, and how pervasive it is. One witness, Italian-born criminology PhD Valentina Tenti, shared a document recovered by Italian police that purports to hold the "Ten Commandments" of the Sicilian Mafia, known the "Cosa Nostra" (Our Thing). <em>With files from The Canadian Press</em>

  • 10. No Easy Meetings

    No one can present himself directly to one of our friends ("amico nostro"). There must be a third party to do it.

  • 9. Never Look At The Wives Of Friends.

  • 8. Never Be Seen With Cops

  • 7. Don't Go To Pubs And Clubs

  • 6. Stay Available ALWAYS

    Always being available for Cosa Nostra is a duty -- even if your wife is about to give birth.

  • 5. Appointments Must Absolutely Be Respected.

  • 4. Wives Must Be Treated With Respect

  • 3. Be Truthful

    When asked for any information, the answer must be the truth.

  • 2. Respect The Cash

    Money cannot be taken if it belongs to others or to other families.

  • 1. Keep It Exclusive

    People who can't be part of Cosa Nostra: Anyone who has a close relative in the police, anyone with a traitor for a relative, anyone who behaves badly and doesn't hold to moral values.