A former construction company owner says corruption money was used to fund political campaigns for Montreal's mayor.

Lino Zambito, the former head of Infrabec, testified on Monday that his company had to pay officials in the Union Montreal political party a 3 per cent cut of all municipal contracts.

"Starting from 2005 to 2006, there was an amount of 3 per cent of the contracts that I gave back to Mr. [Nicolo] Milioto and I had knowledge that this amount went to Mayor Tremblay's political party," said Zambito.

He also fingered a now-retired official, Gilles Surprenant, for demanding an extra one percent of contracts.

Zambito said he paid Surprenant $200,00 over a decade.

Surprenant, who gave himself the nickname TPS (Taxe Pour Surprenant, a play-on-words for the french acronym for GST), was responsible for preparing budgets and plans for construction projects in Montreal.

Zambito said that the political kickbacks began in 2005 and ended in 2009, when his company was raided by the Surete du Quebec.

However there are indications that some of the politically-related bribes began earlier. The commission was shown photos of Surprenant and a senior city engineering inspector, Luc Leclerc, on vacation in Mexico in a trip that was paid for by construction companies.

Zambito said that Leclerc first warned him that his job was to make Zambito's life difficult. According to Zambito, Leclerc was on the take for 25 per cent of all the cost overruns he approved.

Over ten years, that meant another $200,000 paid to Leclerc.

The entrepreneur said there were some honest officials at city hall, but that corruption was widespread.

"I thought it was ridiculous, everyone knew! It's almost as if it was written on a wall," said Zambito.

Opposition parties demand resignation

Vision Montreal leader Louise Harel and Project Montreal chief Richard Bergeron were both quick to demand the resignation of Mayor Tremblay.

Tremblay said that he had no intention of doing so, and he was confident nobody in his party had done anything wrong, pointing out his party's financial records had already undergone an audit.

However he skirted the issue about whether individuals affiliated with the party had abused the system.

"I wished for the Charbonneau Commission. For me it was very important that we shed light on all the allegations of corruption and collusion in the construction industry," said Tremblay.

"I will not make additional comments on what is going on every day at the commission."

Corruption allegations about the mayor's political party have been lodged for years.

Tremblay's former chief fundraiser, Bernard Trepanier, was nicknamed 'Mr. 3 percent" several years ago when Benoit Labonte, himself a former Union Montreal councillor, said that senior party workers were charging contractors.

Labonte said at the time that he confronted Tremblay about the kickbacks.

In 2009 Tremblay said "I verified the rumours and that hearsay and found no relevant fact to support what he said."

Trepanier was among nine people arrested in May of 2012 by Quebec's permanent anti-corruption squad.


Suppliers increased costs

Zambito said that corruption was so rampant suppliers routinely increased prices of materials destined for Montreal.

On Thursday Zambito explained how his company participated in bid-rigging and paid the mafia 2.5 per cent of contracts it won.

He elaborated on this briefly on Monday, saying he gave Nicolo Milioto substantial amounts of cash 20 or 25 times -- money that was intended for the mafia as payment for participating in bid-rigging.

He also said that bid-rigging was the norm for the city of Montreal and for several boroughs, including St. Leonard, Anjou, St. Laurent and LaSalle.


Zambito's company lost contracts following arrest

Zambito was arrested in 2011 and his company lost several government contracts, including work to redo the Highway 640 interchange in St. Eustache, and sewer work on the MUHC superhospital site.

That arrest led to banks yanking his company's line of credit, and Infrabec lost $28 million.

He is now working full-time as a business partner in a restaurant.

So far Zambito has said his family ties to the Rizzuto clan stretched back to Italy, with parents and grandparents from the same village.

His mother's maiden name is Rizzuto, but he is not related to the infamous Mafia clan.

In fact, he said that despite repeated encounters at weddings and funerals with known or suspected mobsters such as Paolo Renda, it was only by reading media reports that he learned who was involved in organized crime.