09/27/2011 01:00 EDT | Updated 11/27/2011 05:12 EST

Quebec gov't leaves door slightly ajar on holding corruption inquiry - in private

QUEBEC - The Quebec government has left open the possibility of holding a corruption inquiry after two years of steadfast refusal to do so.

The scandal-battered Charest government has stood pat in the face of widespread public outcry and persistent political pressure to call a probe.

But the provincial transport minister said Tuesday he wasn't excluding the possibility of a closed-door inquiry.

Pierre Moreau said he wanted to hear more about the idea from the man who first floated it — Jacques Duchesneau, head of the province's anti-collusion unit.

"Does this work for us? I'm not excluding anything," said Moreau, one of two cabinet ministers to discuss the possibility.

Duchesneau suggested a closed-door inquiry would be a quick, easy way to start investigating claims of rampant corruption in the construction industry.

He made the comment during an appearance on a popular weekend talk show and elaborated on the idea in a suspense-filled appearance Tuesday at the Quebec legislature.

He said a closed-door probe would be less disruptive to police investigations than a standard public inquiry.

Duchesneau produced a devastating report that alleges crime groups like the Mafia, the construction industry and a weak civil service are all responsible for inflating the price of public-works projects.

And, in perhaps the most damning part of his report, the former Montreal police chief stated that political parties receive illegal donations from the expanded profits.

Duchesneau laid out details of his vision for an inquiry during his appearance Tuesday at a legislature hearing in Quebec City.

He expressed hope that things might improve in Quebec and insisted it was not too late to heal a gangrenous construction industry.

In a half-hour introductory declaration, Duchesneau used the expression "not normal" several times to describe various aspects of the wide-ranging scheme.

Duchesneau blamed the provincial government for allowing the Transport Department to wither and lose its best experts to private industry.

He accused the department of becoming a "master of subcontracting" that abdicated oversight of construction projects to engineering firms with a vested interest.

And the construction industry, he said, has friends in low places.

His report said groups like the Mafia and bikers not only use construction companies to launder money — but also act as enforcers for favoured firms.

"It is not normal that many companies in the construction industry have ties to organized crime," Duchesneau said Tuesday. "Organized crime is not simply a parasite but an actual state actor."

The result, he said, is that Quebecers pay too much for too few services.

The money from public-works projects winds up switching hands and some of it ultimately gets kicked over as contributions to political parties at the municipal and provincial level.

In Quebec, donations from companies to political parties have been illegal for almost 35 years. So are donations over $1,000. But his report suggests parties make a mockery of the law through various illegal tactics.

On Tuesday, Duchesneau sought to dispel the image of drug-traffickers stuffing wads of cash into the briefcases of party bosses.

The modern Mafia has graduated to new levels of respectability, he said. Today's Mob is run by pillars of the business community and considered respectable by general society, he said.

The people now pulling the strings are active in their communities and present at political party fundraisers — because, Duchesneau said, they're always looking for powerful friends.

"They've graduated from Secondary 5 to doctorates," Duchesneau said of how the Mafia has evolved since the 1970s.

"It's sad, but it's the hard reality... We're talking about a parallel system ... where money, slowly but surely, makes its way into the political world."

The provincial elections watchdog has already met with Duchesneau and plans to investigate his claims.

Duchesneau says it won't be easy to loosen the influence of crime in public life.

He said today's criminals have such tremendous wealth that the state can hardly compete:"No police service will ever have the means these people have," said Duchesneau, who once headed the Canadian Air Transport Security Authority.

That's why all of society needs to rise up and speak out — with an inquiry serving as an ideal vehicle, he said.

His ideal inquiry would carry two phases: first, a private one, then possibly a public one.

The initial phase would quietly amass evidence of the problem, then the public portion would examine solutions, he said, citing Australian inquiries as a model.

He said he personally witnessed over the last year how sources will be much more forthcoming with information if they believe their identity will be protected.

"Witnesses behind closed doors will be very, very voluble," he said. But in public, he said, "they forget names."

He said 17 cases from his research have already been sent to police for investigation, four more than the number previously cited.

But he said it will take a public inquiry and not just a criminal probe to restore public trust. He added that things could still change in Quebec.

"I will tell you, no, it's not too late."

As an example, he said a year's negative publicity about corruption in Quebec had already appeared to scare some crooked actors into flying a little straighter.

He estimates the province has saved almost $350 million in construction costs over the last 18 months, compared with what projects had been costing previously.