MONTREAL—Quebec's corruption inquiry is retracting evidence that suggested a Parti Quebecois member's company once had a vehicle parked outside a Mafia hangout.

The chief counsel for the commission, Sonia Lebel, says the source of the error was a licence plate number written down incorrectly by the RCMP. An officer transposed several digits.

A firm owned by MNA Andre Villeneuve was among 74 mentioned by police, who took down the licence numbers of company cars parked outside the Cafe Consenza, a hangout for the Mafia that used to be located at a Montreal strip mall.

But Lebel said Thursday that Planchers Mirage Andre Villeneuve Inc., along with Construction LPG, should not have appeared on the list.

At the time, Villeneuve vigorously denied the link and defended his reputation. The PQ jumped to his defence when the link was suggested at the inquiry last September.

Villeneuve, 52, has represented the riding of Berthier since 2008.

The incident involving him comes with the inquiry facing additional scrutiny over the potential for unfair damage to reputations.

Recently, a key witness whose testimony was politically devastating to former Montreal mayor Gerald Tremblay, admitted he'd made up one of the stories he told.

Earlier in the day, Michel Lalonde described in details how he broke every ethical rule for engineers and how he generously distributed money to buy political influence. Justice Charbonneau thanked him for coming clean.

Charbonneau had earlier criticized Lalonde for sugar-coating his role, even if he clearly admitted he defrauded tax payers. Lalonde asked for forgiveness and even shed a tear when he thanked his family for supporting him.

—with files from The Canadian Press.