Quebec's anti-corruption unit (UPAC) made 14 arrests and laid 47 charges in a series of early morning raids on Tuesday north of Montreal.
The arrests include construction magnate Tony Accurso, who was taken into custody as investigators searched locations in Terrebonne, Mascouche and Laval. A warrant was also issued for Mascouche Mayor Richard Marcotte, who was on vacation in Cuba.
"The arrests and searches came after a 1½-year investigation, which allowed us to establish that a system had been put in place a few years ago allowing certain companies to gain an advantage towards the attribution of municipal contracts," said Quebec provincial police Lt. Guy Lapointe.
The alleged "system" uncovered by investigators also found public officials benefited from gifts and money given in exchange for favourable decisions and privileged information, he said.
Two companies, engineering firm BPR Triax and Transport et Excavation Mascouche, were also informed criminal charges would be filed against them.
The charges against individuals and companies include fraud, fraud against the government, breach of trust by a public officer, municipal corruption, influencing a municipal official and conspiracy.
The accused would be released with conditions on Tuesday, Lapointe said.
Accurso's name has been at the centre of several corruption allegations in recent years. His company was involved in the controversial water meter contract in Montreal that was eventually scuttled, and companies linked to his empire have been convicted of tax fraud.
Accurso's name also surfaced during the 2011 federal election campaign amid controversy surrounding the appointments process at the Montreal Port Authority.
Former Montreal opposition leader Benoît Labonté admitted to accepting $100,000 from Accurso to fund his bid for leadership of his civic party. The admission has all but destroyed Labonté’s political career.
Accurso's arrest represents one of the most significant to date for the province's permanent anti-corruption unit.
"His specific role was, he would give advantages to [public] officials in return for advantages for companies toward bidding on contracts," Lapointe said of the allegations against Accurso.
Accurso faces six charges: fraud, conspiracy, influence-peddling, breach of trust and two counts of defrauding the government.
He was released this afternoon and is expected to appear in court on June 19.
Accurso has previously denied corruption allegations and having inappropriate political ties.
Mascouche city hall raided
The investigation started in October 2010 when two witnesses came forward with information about the attribution of contracts by the City of Mascouche, according to provincial police.
In total, eight search warrants were executed.
In Mascouche, provincial police officers taped off city hall and started searching inside before 7 a.m. ET.
Marcotte is expected to be arrested when he returns to Canada.
Links between Marcotte and a developer were first reported by Radio-Canada two years ago, after he apparently received $40 million in contracts with the town between 2000 and 2009.
The developer allegedly paid for renovations at the mayor's house in return for those contracts.
Marcotte, Mascouche's mayor for more than 20 years, ran as a Liberal candidate in the 2003 provincial election. The next year, the government named him to the board of Quebec's police academy in Nicolet.
He has denied any wrongdoing and refused to step down, even after the allegations were made public.
Premier Jean Charest has called an inquiry into widespread allegations of corruption involving the construction industry in Quebec and its relationship with political parties and the awarding of public contracts. It is expected to begin hearing witnesses in the fall.
It is unclear what impact today's arrests might have on when Charest calls a provincial election. He may be tempted to go to the polls in the spring before the criminal proceedings and the construction inquiry get going.