10/16/2012 10:37 EDT | Updated 12/16/2012 05:12 EST

Lino Zambito: Quebec Corruption Inquiry Witness Offers Advice On How To Clean Up Construction Industry


MONTREAL - A Quebec corruption inquiry that has been loaded with surprises saw yet another one Tuesday: the chief counsel suddenly announced he was quitting because of a perceived conflict of interest.

Sylvian Lussier's departure was announced by the Charbonneau Commission. In a letter to the commission, Lussier said that while any conflict allegations are unfounded he had decided to recuse himself to ensure the integrity of the process.

"As you know, some doubts have been raised about me in regards to a possible appearance of a conflict of interest due to an old file unrelated to the mandate of the commission," Lussier said in a letter, dated Monday.

"After careful consideration, even if these doubts are unfounded, factually or legally, it seems to me that the public interest will be better served if I remove myself as chief prosecutor ... so as to avoid any possibility that my participation may put in question, in any way, the integrity of this work."

In August, published reports indicated that Lussier, as part of his private practice, represented an asphalt company that was cited in documents deposited at the inquiry.

The company cited by La Presse newspaper, Asphalte Desjardins, was raided by police officers with Quebec's anti-corruption squad Tuesday. A witness at the commission named that company as part of a group of firms that over-charged the Quebec government for public-work contracts.

Lussier was also listed as a member of the Plan Nord team on the website of Osler, Hoskin and Harcourt, where he works. The team was created with the goal of helping companies get contracts for the massive, provincially funded northern development project. His name was subsequently removed from the site.

Lussier, one of Quebec's best-known lawyers with a career spanning more than three decades, was the federal government's lawyer during the Gomery sponsorship inquiry.

He said in his letter that he was proud of the work he'd accomplished and felt confident that the lawyers working with the commission could make up for his departure.

Lussier said in the letter that his resignation is effective immediately. He is being replaced on an interim basis by another senior commission lawyer, Claude Chartrand.

The commission thanked Lussier for his work in the past year and expressed regret at the loss of bright legal mind. In a statement, the commission said it understood the decision had been taken with best interests of the inquiry at heart.

Meanwhile, on the witness stand Tuesday, a star witnessed faced pointed cross-examination aimed at shattering his credibility.

Former construction boss Lino Zambito was challenged by a lawyer for the City of Montreal to provide details to back up his claims about widespread corruption in municipal contracting.

When asked for specific details about dates and projects, Zambito struggled.

For instance, Zambito was asked to reveal who told him he'd need to pay a three per cent kickback from contracts to the Montreal mayor's political party — something Zambito has said he had to do.

He said he didn't remember. Zambito replied that he recalled being informed about the new policy at a meeting with other construction companies but couldn't remember who had actually informed him.

He was also asked how he knew for sure that the person he gave the money to actually turned it over to Mayor Gerald Tremblay's party. Zambito's reply: he trusted that the man collecting the money, Nicolo Milioto, was telling the truth.

"I had no reason to doubt Mr. Milioto's word that it wound up with (the) Union Montreal (party)," he said.

City lawyer Martin St-Jean also questioned Zambito about money apparently destined for former city official Robert Abdallah. Zambito admitted, as had during his testimony, that he never actually saw Abdallah receive any money when he allowed more expensive pipes to be used on a job.

Zambito said all he knew was that when he ordered the more expensive pipes, as someone else asked him to do, the city authorized his contract.

St-Jean suggested that Zambito's testimony appeared based mainly on hearsay. In one exchange with the witness, he quipped: "You were the man who saw the man who saw a bear?"

After multiple days on the witness stand, Zambito has painted a portrait of widespread corruption in the construction industry inside and outside Montreal.

He has said companies operated as a cartel. He said they colluded to drive up the cost of contracts; paid a 2.5 per cent commission to the Italian Mafia; paid three per cent kickbacks to a political party in Montreal, additional bribes to local officials and to the mayor of Laval; and illegally funded political parties at the provincial level.

Tuesday marked the first day of cross-examination and either five or six lawyers are expected to quiz Zambito.

Earlier Tuesday, Zambito was asked to share some advice on how to clean up the bid-rigging and collusion he'd spent several days describing.

Zambito said companies or businessmen found to be involved in fraud or bid-rigging should have their licences removed for good.

"It takes stricter laws at the level of the Regie de batiment," said Zambito, referring to Quebec's building-code and construction-permit authority.

"The businessman who is found guilty of fraud or collusion needs to understand the permit provided by that office is a privilege and not a right."

Zambito said authorities must close loopholes that allow businessmen to get back into the industry by starting or buying other companies.

He said the names change but the owners remain the same.

He said the province and municipalities could thwart collusion by hiring more of their own engineers and doing work internally instead of relying so heavily on private firms.

Zambito said municipalities must also do a better job of vetting contracts and look deeper into the background of people who land them.

Things have already improved, he said.

Repeating a point he has made throughout his appearance, Zambito said things cleaned up considerably after a provincial police anti-corruption unit was created following sensational media reports in late 2009.

None of Zambito's allegations before the inquiry have been proven in court.

Also Tuesday, The Liberal Party of Quebec was granted participant status, meaning it will have a lawyer represent them and able to interrogate witnesses. The Parti Quebecois already had a lawyer at the inquiry.

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