MONTREAL - The Harper government's once-favoured candidate for the presidency of the Port of Montreal has been named in testimony about a corruption scheme during Quebec's public inquiry.
Robert Abdallah is being accused of participating in a kickback scam, during testimony today before the inquiry which is looking into the construction industry and its links to organized crime and politics.
Former construction boss Lino Zambito has alleged that Abdallah, then director general for the City of Montreal, instructed him through a municipal engineer to use piping from a particular firm while working on a major sewer contract.
The piping was more expensive, but Zambito says he was assured by the city engineer that he would be compensated.
Members of the board of the Port of Montreal have said that a onetime senior aide to Harper, Dimitri Soudas, had personally met with them to persuade them to appoint Abdallah. He was not appointed in the end.
The allegations at the Charbonneau commission have not been proven in court.
The latest ones came up during the third day of Zambito's incendiary testimony at the inquiry.
He has described a local construction industry that operated as a tightly controlled bid-rigging cartel that fixed prices and, while taxpayers were getting milked, profits were split with the Italian Mafia, corrupt local bureaucrats and even the mayor's political party.
Mayor Gerald Tremblay has denied any wrongdoing.
Zambito has testified that 2.5 per cent of the value of his municipal contracts went to the Italian Mob. He has also said a top Mafia don, Vito Rizzuto, acted as a mediator when there was a dispute with another company in the bid-rigging cartel.
He has said the cost of doing business also meant: a three per cent kickback from municipal contracts to the mayor's party; a one per cent bribe to a certain local bureaucrat; and countless gifts and cash benefits to other local employees.
Zambito says that after bidding successfully in 2005 on a $10-million sewer contract in east-end Montreal, he was summoned to a meeting one week later and told he had to use concrete piping furnished at a higher cost by supplier Groupe Tremca.
The former construction entrepreneur says his plan relied on a cheaper solution and didn't involve buy pipes.
But Zambito says the order to use Tremca was given to him by an engineer for a private firm who said the order came from Abdallah, then the city's top-ranking bureaucrat.
Zambito said he initially balked because buying from Tremca was more expensive.
But Zambito said he was assured that any extra costs would be covered by the city and he said it was clear to him that Abdallah and Tremca had an arrangement.
"In my head it was clear that there was an arrangement between Mr. Abdallah and Tremca and I had no choice but to buy pipes from Tremca if I wanted the contract," Zambito said.
He said the message was clear: "You either get on board or the contract goes back to tender," was how Zambito interpreted the process.
Zambito decided to get on board since the contract was valuable and he was assured any extra costs would be covered.
He said the engineer, who worked for a private company, was firm with him.
"He said, 'If you want the project to be done, the pipes must be purchased from Tremca.' The price was determined," Zambito told the commissioners.
"We'll compensate you — and the $300,000 difference is the amount that the folks at Tremca will have to give to Mr. Abdallah to ensure the project is granted by the City of Montreal."
Zambito said it was the only time he could remember being told that he had to deal with a specific supplier.
The former owner of Infrabec says he never personally met Abdallah about the contract and crossed paths with him only once at a community fundraising event.
Abdallah, a long-time construction executive, was the city's director general from 2003 until 2006, when he left the job for unspecified reasons.
Abdallah's name became embroiled in a controversy surrounding the appointments process at the Montreal Port Authority and allegations of political pressure from Ottawa.
The Conservatives have acknowledged the government indicated a preference for Abdallah as president of the Montreal port board in 2007, as did the City of Montreal.
But the Conservatives denied any wrongdoing in the matter and said the decision was ultimately up to the Port Authority's board, which selected another candidate.