10/23/2012 11:31 EDT | Updated 12/23/2012 05:12 EST

Ex-Montreal engineer pocketed thousands in kickbacks beginning in 2000

MONTREAL - A retired City of Montreal engineer says collusion became rampant on local sewer contracts at the turn of the century and that he was pocketing kickbacks galore.

Gilles Surprenant was back on the stand for a third day at the Charbonneau Commission on Tuesday, going over 91 contracts in which he was involved between 2000 and 2009.

Calmly and with a clearer memory than he'd exhibited in the first two days, Surprenant said the majority of public works contracts he helped plan were rigged and that he was compensated each time, either directly or through a construction boss acting as a middleman.

Surprenant testified he received kickbacks from construction bosses ranging from $3,000 to $10,000. At least twice, he pocketed about $22,000.

By the commission's count and Surprenant's own admission, he walked away with between $50,000 and $60,000 in 2000 alone.

Surprenant has admitted he collected as much as $600,000 in kickbacks over a 20-year period. He returned $122,800 to the inquiry in August and says he gambled away and used up the rest.

He also received numerous tropical holidays, expensive meals and concert and hockey tickets. Surprenant has testified he golfed on two occasions with Vito Rizzuto, the former godfather of the Montreal Mafia.

Surprenant said collusion was rampant and occurred on contracts big and small. After some prodding from commission lawyer Denis Gallant, Surprenant admitted that many people at city hall were in the know.

"From what I hear, perhaps it was an open secret, as you say," Surprenant said.

He said he artificially increased the price of contracts determined by a computer program to meet the requests of construction companies working in a cartel.

He added explanatory notes to the plans to justify the extra costs. Surprenant said no one ever questioned why the computer-generated contract estimates were always being revised upward.

"It was always accepted, at all levels, right up to the executive committee," he said of the inflated contracts, sometimes as high as 35 per cent. Surprenant said his immediate superior, Yves Themens, and Robert Marcil, Themens' boss at the time, were in the loop on the price hikes.

Themens has been named in previous testimony by Lino Zambito as having provide sensitive information to contractors. With the allegations, Themens has been suspended from his job pending an investigation. Marcil no longer works for the city.

Surprenant said that in 2000, the list of bidders was made public, which helped construction companies collude. The amounts were higher and the same companies were winning contracts.

"If the lists weren't made public, this phenomenon probably wouldn't have existed," the engineer said.

While it may have been an "open secret," Surprenant repeated that his bosses always signed off on his work. And no one did anything to stop the rising costs.

"It was spoken about in the office, it was known to everyone but no one from the administration or my bosses ever came to see me."

Surprenant never told anyone about the amounts he was receiving and said he was never completely comfortable with the kickback scheme.

He has denied he was collecting one per cent of the contracts, as had been previously stated by Zambito. But when contractors weren't quick with paying out a cut, he would sometimes call to arrange a meeting.

He said the cuts destined for his pockets were collected in a variety of places, from street corners to restaurants to the headquarters of major construction companies.

Surprenant has testified he began taking kickbacks as of the early 1990s but that the practice really only took off as of 2000. Surprenant said it was common place in contracts dealing with sewers, which was his job, but also prevalent in other areas like sidewalks and roads.

Surprenant said some people were more comfortable living a lavish lifestyle.

Previous witness Zambito has testified that Surprenant's colleague, Luc Leclerc, was also collecting kickbacks.

Surprenant said Leclerc was aware Surprenant was getting kickbacks and has said it was Leclerc who let him know the Mafia and the city's "executive committee," an elected decision-making board, were taking cuts.

Zambito has said the money was destined for the mayor's political party, Union Montreal.

Surprenant testified that Leclerc owned a home on the same block as construction boss Paolo Catania of F. Catania Constructions. The latter had built the home for Leclerc in a trendy housing project south of Montreal. Leclerc's neighbours included Frank Catania, Paolo's father.

It was a beautiful house, Surprenant admitted. But he could never see himself in such a home on his salary of about $82,000 a year. By comparison, Leclerc only made about $15,000 more.

"I didn't want it to change my family's lifestyle or those of my kids," said the divorced father of three.

The inquiry also heard that Themens, Leclerc and Surprenant, who used to vacation frequently together, continued to see each other after the last two men retired.