Quebec construction boss says he was swayed by easy money

A former construction boss who admitted to his part in a scheme to inflate a public contract told the province's corruption commission he tried to sue his partner for the inflated profits when the other reneged on their deal.

Described bid-rigging scheme that jacked up profits

Piero Di Iorio says he was a willing participant in the inflation of one contract until his partner tried to keep all of the profit. (Charbonneau commission)

A former construction boss who admitted his role in a scheme to inflate a public contract with another company, told the province's corruption commission he tried to sue his partner for the inflated profits when the other reneged on their deal.

That 2005 contract was for work at a municipal waste site not far from the office of Piero Di Iorio's company D. P. Excavations.

While testifying earlier, Di Iorio described an entrenched scheme of bid rigging that allowed for the inflation of bids on city projects, one he says he was excluded from because he wasn't part of a group of Sicilian businessmen who were controlling the plan.

However, at some points during his career, Di Iorio decided to go against the system and bid on projects, particularly when they were close to his offices.

On Tuesday morning, he described one such contract that was tendered by the former Montreal Urban Community, a now-dissolved municipal body that represented the entire island.

Reaching an agreement

At that time, Di Iorio decided to put in a $1.8-million bid for the work, a price he says would leave him about three per cent profit verses the 10 or 15 per cent he generally made off private sector jobs.

Before he was able to submit his bid, Di Iorio said he was contacted over and over by another businessman, Jean-Guy Ste-Croix, who claimed it was his turn to bid on the project and that Di Iorio should back off.

Eventually, Di Iorio gave in and worked out a deal to split the work and the profits with Ste-Croix.

Ste-Croix would submit a bid of $2.6 million for the work, Di Iorio would put in a higher bid and lose the contract and then they would split the inflated profits.

"It was the first time he talked about inflating the contract," Di Iorio said of the meeting with Ste-Croix at his office.

"I'll tell you the truth, I wasn't comfortable with it, but I said to myself, 'My God, If I can make $350,000 in three months, damn, that's worthwhile."

But another company bid lower than they did. Ste-Croix was quick to point out that company's plan violated one of the terms of the tender and the firm was disqualified.

Di Iorio and Ste-Croix were then clear to move ahead with their original agreement, he testified.

Communication stops

But Ste-Croix stopped taking his calls, Di Iorio testified.

The men had nothing on paper, Di Iorio said, but the plan was he would bill St-Croix for $350,000 worth of equipment rental, the amount of profit he was owed, over the course of the contract.

"It's illegal. In my 30 years' experience, I've never seen a guy write on a paper: You and me, this is how much are we going to inflate the bid by and we'll split it by two. I've never seen that," Di Iorio testified.

Ste-Croix continued to avoid him and Di Iorio finally went to his lawyer and filed a suit for the phony rental fees he said he was owed.

The lawsuit was eventually dropped after both parties involved were questioned.

Di Iorio said his lawyer wouldn't go forward because he told him the truth about the agreement.

"He said, 'I can't go to court with this,'" Di Iorio said. "The judge will say, 'This is like a guy who had his drugs stolen and calls the police to report he was robbed of a kilo.'"

Di Iorio has since closed his Montreal excavation business and moved to the Sept-Iles area, where he is working on a project linked to the Plan Nord.

His testimony concluded this morning.