Mafia taxed construction in Quebec: testimony

MONTREAL — Images of an old Mafia don stuffing cash into his socks elicited online jokes from people watching Quebec’s corruption inquiry Wednesday.

But a police officer explained why those videotaped scenes are no laughing matter: they’re part of a monumental scam that drives up the price of construction, he testified.

The stacks of money being stuffed into Nicolo Rizzuto’s socks came from players in a industry that, according to that Montreal municipal officer, would see its costs ramped up by as much as 30 per cent because of a tax imposed by the Mafia.

Eric Vecchio, a Montreal police detective now working for Quebec’s Charbonneau Commission, said he hears that the levy continues to exist despite all the province’s recent construction scandals.

The Mob’s rates have decreased, he said. The fees being charged now are half what they were a few years ago, when the Rizzutos were still at the height of their power, he said. “We’d heard that 30 per cent was billed and now that number is 15 per cent,” Vecchio said. “They’ve brought the number down to an amount they consider to be more reasonable.”

He said there were no clear rules as to who paid what. One entrepreneur might pay two per cent while another might pay five. By the end of a project, Vecchio said, the average cost would have been driven up by about 30 per cent.

The higher cost of construction in Quebec was referred to three years ago, in investigative media reports that raised alarm bells about potential collusion in the industry. Such reports, over time, pushed the provincial government to call the inquiry.

Vecchio went further Wednesday in describing the alleged system.

“It was effectively a tax – a cut that was given to make sure things went well,” said Vecchio, who described the cut as a way to get protection, to buy peace or gain the influence of certain individuals.

“It’s clear the people who were paying this tax believed this – or they wouldn’t be paying it.”

The inquiry was told about, and saw, the cash flowing during hours of police surveillance video shared Wednesday.

Those images were gathered by the RCMP as part of surveillance operations in 2004 and 2005 – and they were largely ignored until now. The memorable scenes included the onetime don of the country’s most powerful Mafia family, the late Nicolo Rizzuto, at meetings with construction-industry players where he received wads of cash and hid them in his socks.

Construction industry bosses were seen handing cash to Rizzuto or other Mafia types; there were also scenes from a Christmas party where businessmen and senior members of the Cosa Nostra exchanged affectionate twocheek kisses as they milled about a snack table.