Bureaucrat tells Quebec corruption inquiry he accepted $600,000 in kickbacks
By Sidhartha Banerjee, THE CANADIAN PRESS
Published Thursday, October 18, 2012 6:43PM EDT
Last Updated Friday, October 19, 2012 9:51AM EDT
MONTREAL--The man known as "Mr. TPS" to Montreal construction companies says he was pretty ill at ease with the idea of collecting kickbacks from entrepreneurs while helping inflate the price of construction contracts on the island.
But whatever discomfort Gilles Surprenant felt didn't prevent him from taking the ill-gotten money, which by his own admission amounted to nearly $600,000 in cash over almost 20 years, a Quebec corruption inquiry heard Thursday.
Often evasive and nervous on the stand at the Charbonneau Commission, Surprenant couldn't remember the companies with which he worked.
An ex-construction boss testified previously that Surprenant took a one per cent cut called a "TPS" -- the name being a tongue-in-cheek twist on the French-language acronym for the federal sales tax, the GST. In this case, "TPS" stood for 'Taxe Pour Surprenant' (Tax for Surprenant).
Surprenant did not discuss the one per cent but admitted his first "cut" was an envelope containing $3,000 or $4,000 that he received from an entrepreneur in 1991 for a contract he helped pass at city hall.
Surprenant, a chief city planner for many years who prepared plans and budgets for public works projects, followed eight days of headline-grabbing testimony by ex-construction boss Lino Zambito with some of his own.
His first kickback came from Construction F. Catania in exchange for helping a contract go through at Montreal city hall. The company's winning bid of $500,000 came in at double the $250,000 originally allotted for the project.
Surprenant recounted a lunch meeting he had with Frank Catania in which the construction magnate reportedly delivered a message described by Surprenant as intimidating but not threatening.
"The people who keep us from eating, we shunt them aside," Surprenant quoted Catania as saying.
Surprenant said he convinced a superior that the extra costs were entirely warranted. A second meeting with Catania came about six weeks after the first one and once the city had OK'd the deal at Catania's price.
During his lunch break, he drove to Catania's headquarters in suburban Brossard, just south of Montreal, and was handed an envelope.
He recalled he had just several seconds to decide what to do.
"You take the envelope, you put it in your pocket and it's 'thank you, goodbye'," Surprenant said, remembering that first experience. "You don't anticipate what else can happen down the road."
But it would happen again. Inquiry investigators have identified at least 90 contracts where Surprenant got a piece of the pie over the years. And commission lawyer Denis Gallant said it was "non-stop until 2009."
Surprenant said a second kickback came around 1995 and the last one was received in 2008. He said he believes his last "cut" came from the very same entrepreneur who gave him his first.
But Surprenant said he was always uncomfortable taking the kickbacks and wasn't even sure what to do with the money. He kept it at home.
He said he enjoyed a comfortable life on his $80,000 annual salary and wanted to keep a low profile. He's lived in the same house since 1982 and used some of the cash to do renovation work.
But he never wanted a condominium, a boat or a flashy car. He ultimately found other ways to spend the cash, saying he blew about one-half of it at the Montreal Casino.
"It was my way of putting this money back into the coffers of the state," Surprenant said. "It was my way of paying a kind of tax."
About $150,000 went to help a construction company that needed financial help and Surprenant said he only got back $50,000 of that amount. Some money was also spent on different things for his three children.
As for the roughly $123,000 that remained of the cash, Surprenant said he gave it to inquiry investigators in August, adding, with tears in his eyes, that it brought him a great sense of relief.
He had one last chance to see the money on Thursday. An officer showed him an evidence bag stuffed with $122,800 in 20s, 50s, and 100s that was seized. It sat on the table next to him for a few minutes.
"I was glad to get rid of the money," Surprenant said. "This money was just bad memories."
Surprenant's testimony backs up some of the allegations provided by Zambito in his bombshell testimony. He testified that kickbacks were paid in cash directly to Surprenant in various locations and without any witnesses.
Quebec's corruption inquiry heard explosive testimony from Zambito that certain companies, including his own, operated as a cartel and colluded on certain contracts to drive up the cost of contracts.
Various cuts were paid out on those rigged deals with a 2.5 per cent commission going to the Italian Mafia and three per cent to the governing municipal party in Montreal, beginning in 2005.
In addition, there were other bribes and arrangements with various city engineers and bureaucrats, including Surprenant, who benefited from cash as well as holidays and golfing excursions.
Zambito said the illicit practices extended to provincial contracts and contracts in other municipalities in Quebec. Notably, he testified he'd been made aware that a 2.5 per cent cut of contracts in Laval, north of Montreal, went directly to that city's mayor.
Laval Mayor Gilles Vaillancourt has denied the allegations.
Zambito also admitted to illegally funding political parties at the provincial level, using the names of friends and families to circumvent donation rules.
Surprenant will return to the stand next week.