Members of the New York Mafia have been controlling the construction industry in Quebec and elsewhere by gaining control of building unions and controlling the supply of raw materials, hurting legitimate construction firms and driving up the taxpayer cost of public projects, the Charbonneau Commission into construction industry corruption in Quebec has heard.
On Monday, Joseph Pistone, who spent five years undercover as a Mafia henchman testified at the inquiry into his experience in ‘deep cover’, mostly inside New York’s Bonanno crime family in the late 1970s and early 80s.
Asked about how New York’s five Mafia families insinuated themselves into business and government, Pistone responded by saying that organised crime ‘cannot operate without corrupting someone.’
In building and construction, he says, this usually meant gaining control of unions, typically by having a Mafia representative get elected president or put in charge of a local unit.
Given the high levels of unionization on many large building projects, the Mafia family could use its influence over workers and the labour force to extort payments by telling union members to slow down to point where the company was losing money and demanding payments in return for work to be sped up.
“They’ll start their own union, or there will be an existing union where they’ll have their man, a Mafia guy within the union, become the representative of the union, become the president of the union,” Pistone says.
Alternatively, Pistone says Mafia-run construction firms would submit claims for more expensive unionized labour while actually paying cheaper non-union rates and pocketing the difference.
In many cases, organized crime held stakes in firms which supply cement, steel and other raw materials and were able to use these to profit from public contracts even where the contracts in question went to legitimate construction firms.
Set up in 2011, the Charbonneau Commission is investigating practices relating to corruption in the provision of management and public contracts in the construction industry throughout Quebec.
