09/16/2011 10:56 EDT | Updated 11/16/2011 05:12 EST

Quebec Corruption Report: Jean Charest Says His Government Part Of Solution To Problem

MONTREAL - Far from being chastened by the corruption problem plaguing his province, Quebec Premier Jean Charest is taking credit for being part of the solution.

The premier reacted Friday to a devastating report, leaked to the media, that outlines an elaborate web of corruption and Mob influence in the province's construction industry.

There had been some speculation over whether Charest might finally yield to public pressure to call a judicial inquiry.

But the premier made no mention of such a thing. Instead, Charest laid out a list of measures his government had already taken to fight corruption.

He noted that the leaked report would never have been possible without his government — because it was produced by a task force he created.

"We are acting to obtain results," Charest told a formal news conference, flanked by two senior ministers.

"No government before us ever did this much to fight corruption and collusion... And we will continue."

He recited a litany of gestures over the last two years: the creation of a tactical squad in the province's construction commission; new procurement rules; new rules to block criminals from the construction industry; changes to municipal-contracting rules; tougher tax-evasion laws; four political-fundraising bills; a new police anti-corruption squad; and a new anti-collusion task force.

It was the anti-collusion body that produced the 72-page report that has rattled Quebec.

The document says a corrupt and weak civil service has allowed construction companies to drive up the price of public-works contracts in Quebec.

It says that, last year alone, there was a $347-million difference between original contract amounts and the final price tag.

At the end of the process, the report says, some of the companies' profits are plowed into the coffers of political parties.

And that's not even the most explosive allegation. The report also says these construction companies are tied to the Mafia and criminal biker gangs.

It says the criminals act as enforcers for friendly construction companies, preventing rival firms from getting work done with threats or by pulling strings to create red tape.

The benefits for the Mob are two-fold: not only is there extra profit to be made in construction but it's also a chance to turn old cash profits, from the drug trade, into cleanly laundered money set to be funnelled into respectable businesses.

"If organized crime has infiltrated the construction industry it's because there's a lot of cash money flowing through it," the report says.

"It's interesting to note that, in essence, the principal source of revenue for organized crime is drug-trafficking but that construction contracts represent, to criminal organizations, a coveted tool for laundering money. Revenues are then injected into legitimate projects — but not before a percentage gets paid to those who facilitated the manoeuvre."

Reports of corruption are not new in Quebec; the province has been awash in allegations of impropriety for the last two years.

But the level of detail in the leaked report is unlike anything in recent memory — the document was produced by a task force led by a former Montreal police chief, Jacques Duchesneau.

The reactions and potential reverberations have been wide-ranging.

Thirteen cases have been transferred to police for criminal investigations, the document announced. Meanwhile, Quebec's elections watchdog immediately declared plans to probe deeper, saying the allegations represented a setback after 30 years of efforts to clean up political financing.

The revelations are a public-relations nightmare for the Charest government.

Opposition parties have been demanding a public inquiry and calls for such a probe have only grown. But the Charest government has stood its ground and insisted a massive police dragnet is the best way to handle the crisis.

The government has expressed regret that the document was leaked. It says the public release could tip off suspects to the fact that investigators are on to them.

Some of Charest's adversaries now say he has three options: Call a public inquiry, call an election, or resign.

The front-page headline in one Montreal tabloid Friday was, It's Enough. The front page of a local broadsheet included headlines that said, When's the Cleanup? and, Putting the (Interests of the) State Before the Quebec Liberal Party.

Francois Legault, who is expected to create a new and competitive political party before the next election, is inviting legislators to let the Charest government fall if it doesn't hold an inquiry.

Charest's Liberals hold a three-seat majority in the legislature.