With SolarCity IPO, Elon Musk May Get Clean Tech Right

Over the past few years, Silicon Valley has pumped hundreds of millions of dollars into a vast array of “clean technology” companies. You probably can’t name many of them because, on the whole, they’ve been tremendous failures or totally underwhelming. Companies participating in particularly difficult areas such as solar have turned into laughingstocks and symbols of huge investments gone wrong.

There does, however, seem to be one person getting quite wealthy off green technology, and that’s Elon Musk, the chief executive of Tesla Motors (TSLA) and the chairman of SolarCity (SCTY). When SolarCity began trading on Thursday, its shares jumped more than 50 percent in early trading (although the company had lowered its IPO price in recent days due to lackluster demand). Musk is now the largest shareholder in a pair of public clean-technology companies. (Going into the offering, Musk owned 31 percent of SolarCity, according to a Securities and Exchange Commission filing. That would be worth $ 150.8 million at the $ 8 offering price. A second filing said he intended to buy more shares at the offering.)

“It’s possible that Elon’s two clean-tech companies will be the two most successful clean-tech companies in the U.S.,” said Peter Thiel, the entrepreneur, investor, and Facebook (FB) board member in an interview earlier this year. Thiel is an investor in Musk’s SpaceX venture.

Instead of playing in the cutthroat world of solar-panel production, SolarCity, founded in 2006, focused on leasing solar panels to consumers and businesses and making this process easier. It helps people calculate how much money they can expect to save with solar panels, sets up the financing, and coordinates the installation of the panel. Through the first nine months of the year, SolarCity brought in $ 103 million of sales. Its business has been booming, although the company has yet to turn a profit and is likely to see a number of the state and federal tax credits from which it benefits decline over time.

What makes Musk’s clean-technology empire intriguing are the ways in which he intertwines the businesses. Tesla, for example, has begun building out a network of solar-powered charging stations for its cars. People can drive long distances—San Francisco to Los Angeles, for instance—and refuel their Model S sedans for free using a type of superfast charger. Musk has pledged to keep this refueling service free “forever,” and it is SolarCity that helps set up the stations. Beyond this, Musk plans soon to unveil what he’s describing as a “new mode of transportation” that sounds like some kind of solar-powered, super-fast tunnel called the Hyperloop. (He describes it in some detail here.)

Musk helped come up with the business plan for SolarCity, which was then founded by his cousins, CEO Lyndon Rive and Chief Technology Officer Peter Rive. All the men grew up near each other in Pretoria, South Africa, where Musk led them on a variety of entrepreneurial ventures, including selling Easter eggs door to door. Their mothers were born in Canada, and at about age 15, Musk hatched a plan to move the entire clan to the U.S. after first obtaining Canadian citizenship. “Without Elon I would be stuck in South Africa,” Lyndon told me in an interview earlier this year. “His ability to help us leave the country was amazing.”

Lyndon eventually obtained his green card for the U.S. through his skills as an underwater hockey player. (Yes, this sport exists.) “The U.S. has this green card category for people with exceptional abilities, like if you’re really good at sports or an actor,” Lyndon says. “I’ve been playing the sport since I was 14, and to get the exception you have to prove that you’re one of the best players in the world.” Both Lyndon and his wife have played for the U.S. National Underwater Hockey team.

Once in the U.S., the Rive brothers started a data center software company called Everdream, which Musk bankrolled. Dell (DELL) eventually acquired the company for $ 120 million. The cousins took the money, gave their next venture a think, and all settled on SolarCity.

Both Tesla and SolarCity have their challenges. Tesla has just started pumping out its new Model S sedan at a regular rate. The good news is that it has thousands of back orders to fill. The bad news is that it needs to produce the machines profitability and reliably. Earlier this month, Musk revealed that Tesla had enjoyed a week of positive cash flow. Still, Tesla remains one of the most shorted stocks on the market, with big-time investors betting that Musk will fail. Mitt Romney drove this point home during the presidential debates, describing Tesla as a “loser.”

SolarCity has installed panels at more than 45,000 buildings and been at the forefront of an era when getting this type of technology put on a home or office became much, much easier. “Clean energy has taken a big hit, primarily on the solar side, because of a lot of the companies there were producing a commodity,” Lyndon says, referring to the solar-panel and substrate makers. “The stocks were overhyped because of overdemand and undersupply, and then supply caught up. This should not be a measurement of the market’s willingness to adopt clean energy. The market adoption is almost doubling every year.”

Businessweek.com — Top News

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Cuban lawmakers meet to consider economy, budget

HAVANA (AP) — Cuban lawmakers are holding the second of their twice-annual sessions with a year-end report expected on the state of the country’s economy.

Legislators are also to approve next year’s budget.

Cuban leaders have sometimes used the parliamentary gatherings to make important announcements or policy statements.

Observers will be watching for word on the progress of President Raul Castro‘s economic reform plan and efforts to promote younger leaders.

The unicameral parliament will reconvene in February with a new membership following elections. It is then expected to name Castro to another five-year term.

State-run media said Castro presided over Thursday’s session.

It was not open to international journalists.

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AP PHOTOS: Top 10 Search Trends of 2012

NEW YORK (AP) — From the tragic to the downright silly, millions of people searched the Web in 2012 to find out about a royal princess, the latest iPad, a record-breaking skydiver and the death of a pop star.

Google released its 12th annual “zeitgeist” report on Wednesday. The company calls it “an in-depth look at the spirit of the times as seen through the billions of searches on Google over the past year.”

Here’s an Associated Press photo gallery of the top ten trending searches of 2012.

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Mind-body education helps irritable bowel syndrome

NEW YORK (Reuters Health) – Patients who go through a mind-body educational course are better able to manage irritable bowel syndrome (IBS), according to a new study.

The benefits of the course were modest, about as large as what are typically seen from taking medications, said Dr. Emeran Mayer, the senior author of the study and a professor at the University of California, Los Angeles, School of Medicine.

The program doesn’t work for everybody, said Mayer, but for others “it changed their lives.”

The researchers couldn’t describe exactly how patients’ lives were changed, but those in the study reported having somewhat less severe symptoms and a higher quality of life after they went through the program.

Irritable bowel syndrome is a collection of symptoms, including stomach pain and diarrhea, that don’t have a known inflammatory component like inflammatory bowel disease.

According to Mayer’s study, published in Alimentary Pharmacology and Therapeutics, up to 15 percent of people experience IBS.

Although fiber supplements, antidiarrheal drugs and antidepressants can be used to ease some of the symptoms of IBS, there is no cure.

Some studies have found success with talk therapy, meditation and hypnosis (see Reuters Health reports of November 1, 2011 http://reut.rs/uOYJ8l, June 29, 2011 http://reut.rs/kbJOwu, and May 4, 2010 http://reut.rs/h2R0Ac).

In the current study, Mayer and his colleagues developed a group education program, in which patients attended two-hour sessions once a week for five weeks. The discussions centered on the role of the brain in regulating digestion, how responses to stressful events can affect IBS, and strategies to better manage symptoms.

The researchers compared the symptoms, quality of life, and mental health between 34 people who went through the course to 35 patients who were told they were on a wait list.

By the end of the sessions, patients reported that the severity of their symptoms dropped from about 10 down to about 8 on a 20-point scale. And three months after the program ended, these patients reported that the severity of their symptoms was at about 7.

In comparison, the wait-listed group reported that their symptoms went from about 13 to about 11 at the end of five weeks, and down to about 10 three months later.

The researchers could not describe just what these changes mean in day-to-day terms.

Similarly, the quality of life for patients in the education group rose from about 67 to nearly 76 on a 100-point scale by the end of the sessions, whereas the quality of life reported by the wait-listed group had a small drop from about 64 to about 62.

Patients in the mind-body course also showed some signs of better coping skills. For instance, people were less likely make the worst out of a given situation if they had gone through the sessions.

ENOUGH THERAPISTS?

The findings are “part of larger set of data that says that the brain seems to be really important in the brain-gut interactions as they relate to IBS symptoms,” said Jeffrey Lackner, a professor at the State University of New York at Buffalo who was not involved in the study.

Lackner said it’s not entirely clear yet how meaningful the improvements on these measures will be to people’s everyday lives. He said that future research should explore just how much, in a practical way, patients’ lives change.

The changes seen after the educational program are not huge, Mayer said, but they would be noticeable to the patients. “I would prefer to see much larger changes,” he told Reuters Health.

Dr. Arnold Wald, a professor of medicine at the University of Wisconsin who was not involved in the study, said he’s not surprised to see that the program made some difference to people’s illness.

He explained that one of the premises of the mind-body approach to treating IBS “is that the mind and the body are linked, physically, neurologically, as well as emotionally, and that things that affect the mind can affect the gut and vice versa. So if you can do something to alleviate mind stressors, you can improve body functions.”

“Instead of when symptoms happen to them, saying, ‘I’m going to have the worst abdominal pain of my life and I’m not going to make it to this meeting,’…they can say, ‘I know about stress, I can rationally implement specific steps” to reduce it, Mayer said.

But whether such treatments will reach large numbers of people is unclear. Lackner said there are few therapists in the U.S. who focus on IBS.

Mayer’s group is developing online programs to help make his approach more accessible.

SOURCE: http://bit.ly/U8hjKn Alimentary Pharmacology and Therapeutics, online December 3, 2012.

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Big decline in UK unemployment

12 December 2012 Last updated at 08:54 ET

Continue reading the main story

The number of people out of work fell by 82,000 between August and October, to 2.51 million, official figures have shown.

It was the biggest quarterly fall in unemployment since 2001.

The unemployment rate was 7.8%, down 0.2 percentage points from the previous three months.

The Office for National Statistics also said that the number of people claiming Jobseeker’s Allowance fell 3,000 to 1.58 million in November.

Total pay was up 1.8% compared with the same period last year.

Employment rose 40,000 to 29.6 million, which was the highest figure since records began in 1971.

“We see more people looking for work and actually finding work, so I think there’s a really strong labour market there,” Mark Hoban, minister for work and pensions, told the BBC.

“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full-time jobs and no movement at all in the number of part-time jobs.”

David Cameron was challenged in the Commons over “stubbornly high” long-term unemployment

Employment in the public sector fell for the 12th consecutive month, dropping 24,000 to 5.7 million, which was outstripped by a 65,000 rise in private sector employment to 23.8 million.

“The main disappointment was the fact that despite the gains in employment, there is no pick-up in wage growth, which remains at 1.8%, year on year,” said James Knightley at ING.

“The fact that UK employment is rising, consumer confidence is up and anecdotal evidence of retail sales haven’t been too bad, offers some hope that the domestic situation in the UK is stabilising.”

Among the details in the ONS report:

• number in full-time employment rose 44,000


• number in part-time employment fell 4,000


• unemployed 16-to-24-year-olds fell 90,000 to 626,000, excluding people in full-time education


• the biggest regional fall in employment was in Scotland, where it fell 27,000


• the biggest regional rise was in Yorkshire and the Humber, where it rose 48,000

Leader of the opposition Ed Miliband said long-term unemployment was still “stubbornly high” and the problem was of “fundamental importance… to the country as a whole”.

Continue reading the main story

Things seem to be getting better for young people looking for work. Or at least they are not getting worse. Alas, the same cannot be said for average earnings, which have actually now fallen even further behind inflation in October, with average annual growth of just 1.3%, less than half the rate of inflation.”

End Quote

Speaking at Prime Minister’s Questions, David Cameron said that while long-term youth unemployment was down 10,000, the problem showed the importance of the government’s Work Programme. However, “clearly, there is more to do,” he said.

Surprising strength

Many analysts have questioned why unemployment has not been higher, given the general weakness of the economy.

The flexibility of the workforce has been part of that, according to Ross Walker, UK economist at RBS, who points to the large numbers of part-time jobs in previous months, small rises in average wages and the increase in self-employment.

“None of that fully explains the gap – we would still have expected the labour market to have been rather weaker than it has been,” he said.

“Maybe actually, underlying growth is a little bit better than is being reported.”

BBC chief economics correspondent Hugh Pym said the Bank of England had admitted it did not understand why the labour market was so strong.

“They’re a bit worried about low productivity – in other words, more people in work, but not producing proportionally the amount that you would expect,” he said.

Shadow employment minister Liam Byrne: “We are absolutely not out of the woods yet”

“So is that a sign of a weak economy or an economy that’s got potential to grow in the future? They really don’t know.”

The Office for Budget Responsibility, which makes economic forecasts on behalf of the economy, last week cut its forecast for the peak rate of unemployment to 8.2%, although that still suggests a considerable increase in joblessness from the current 7.8%.

Shadow work and pensions minister Liam Byrne welcomed the fall in unemployment, but stressed that there was also bad news in the figures.

“Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices,” he told the BBC.

“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back-to-work programmes are frankly delivering nothing.”

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The Hobbit: Richard Armitage Talks Preparations For Playing Thorin Oakenshield

British actor Richard Armitage admitted it wasn’t a walk in the park to play a J.R.R. Tolkien character in Peter Jackson’s reimagining of “The Hobbit,” the first installment of which is on its way into theaters.

Upon touching down in New Zealand, where the trilogy was shot, the cast had a lot of character preparation to do.

PLAY IT NOW: Martin Freeman Discusses The Hobbit’s ‘Good Chemistry’ & Playing Bilbo Baggins

“We arrived in February 2011 and we went straight into a training program, which was called ‘Dwarf Bootcamp,’ which was literally boots — these huge boots. We learned how to walk, we wrestled with each other, we did archery together, we did sword fighting, hammer fighting, horse riding — everything you could possibly think of,” Richard, who plays Thorin Oakenshield in the film told Access Hollywood at the film’s junket.

In addition, the cast, which includes his former “Cold Feet” co-star James Nesbitt as Bofur, found ways to get to know each other better off set.

VIEW THE PHOTOS: The Hobbit: An Unexpected Journey — New York City Premiere

“We went round to each other’s houses and we cooked food together, we went to the pub and got drunk together, so there was an incredibly great bonding time between the dwarves,” he said.

Richard had plenty of experience sword fighting and horse riding in the BBC America series “Robin Hood,” but it was something else that came in handy during the long days on set.

“I’d done a number of shows where I’d had to use sword fighting and I’d also done horse riding. I’d also pulled guns out of my pocket. That was less useful,” he laughed, likely referring to his recent role in the PBS-import series “MI-5,” where he played a British spy. “But, yeah, you draw on everything. I’d worked at the Royal Shakespeare Company, so the vocal work was really useful to kind of pull that from there. I’d worked in a circus, there were… all sorts of things that were really useful, but the one thing that I do have — for lack of talent — is stamina and that’s the one thing I think everybody needed on this job.”

VIEW THE PHOTOS: Meet ‘The Hobbit’ Cast!

An imagination was useful also, but Richard said what turned out on the big screen was still wilder – and more beautiful – than he dreamed of.

“So many moments… Actually, apart from the eagles — which every single time I’ve seen this film absolutely blows my mind and I can barely keep the tears back and [it has] nothing to do with the pathos of the scene, just that feeling of flight moves me — is the throne of Aragorn, in the beginning of the prologue,” he told Access of the moment that moved him most. “When it got to [filming] that scene, I walked on and… it was just a green cross on the floor with a tiny green chair… [But in the film], they just made this incredible, almost space aged, sort of suspended seat in the middle of this stalagmite. It just blows my mind when I see that.”

VIEW THE PHOTOS: The Brit Pack: Hot Shots Of Stars From The UK!

“The Hobbit: An Unexpected Journey” hits theaters on December 14, 2012, followed by “The Hobbit: The Desolation of Smaug,” on December 13, 2013 and “The Hobbit: There and Back Again,” on July 18, 2014.

– Jolie Lash

Copyright 2012 by NBC Universal, Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Obama election tweet most repeated but Olympics tops on Twitter

(Reuters) – An election victory tweet from President Barack Obama — “Four more years” with a picture of him hugging his wife — was the most retweeted ever, but the U.S. election was topped by the Olympics as the most tweeted event this year.

Obama’s tweet was retweeted (repeated) more than 810,000 times, Twitter said as it published a list of the most tweeted events in 2012. (http://2012.twitter.com/)

“Within hours, that Tweet simultaneously became the most retweeted of 2012, and the most retweeted ever. In fact, retweets of that simple message came from people in more than 200 countries around the world,” Twitter spokeswoman Rachael Horwitz said.

Twitter users were busiest during the final vote count for the presidential elections, sending 327,452 tweets per minute on election night on their way to a tally of 31 million election tweets for the day.

The 2012 Olympic Games in London had the most overall tweets of any event, with 150 million sent over the 16 days.

Usain Bolt’s golden win in the 200 meters topped 80,000 tweets per minute but he did not achieve the highest Olympic peak on Twitter. That was seen during the closing ceremony when 115,000 tweets per minute were sent as 1990s British pop band the Spice Girls performed.

Syria, where a bloody civil war still plays out, was the most talked about country in 2012 but sports and pop culture dominated the tally of tweets.

Behind Obama was pop star Justin Bieber. His tweet, “RIP Avalanna. i love you” sent when a six-year-old fan died from a rare form of brain cancer, was retweeted more than 220,000 times.

Third most repeated in 2012 was a profanity-laced tweet from Green Bay Packers NFL player TJ Lang, when he blasted a controversial call by a substitute referee officiating during a referee dispute. That was retweeted 98,000 times.

This was the third year running that the microblogging site published its top Twitter trends, offering a barometer to assess the biggest events in social media.

Superstorm Sandy, which slammed the densely populated U.S. East Coast in late October, killing more than 100 people, flooding wide areas and knocking out power for millions, attracted more than 20 million tweets between October 27 and November 1.

European football made the list of top tweets when Spain’s Juan Mata scored as his side downed Italy 4-0 in the Euro 2012 final — sparking 267,200 tweets a minute.

News of pop star Whitney Houston‘s death in February generated more than 10 million tweets, peaking at 73,662 per minute.

Romantic comedy “Think Like a Man” was the most tweeted movie this year, topping “The Hunger Games”, “The Avengers” and “The Dark Knight Rises.”

Rapper Rick Ross who notched his fourth No. 1 album on the Billboard 200 chart this year, was the most talked about music artist.

(Editing by Rodney Joyce)

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Timeline: Key dates ahead as Congress confronts “fiscal cliff”

(Reuters) – Sharp U.S. tax increases and government spending cuts will take effect in January unless Congress and President Barack Obama can agree on a package of deficit reduction measures.

With lawmakers rushing to avert events that could trigger another recession, here is a look at key dates ahead, with estimated impacts based on research by the Tax Policy Center and the Bipartisan Policy Center, both non-partisan think tanks.

* December 14. This was the targeted adjournment date for the U.S. House of Representatives, but it has been postponed. The U.S. Senate has not set an adjournment date.

* December 17. Unofficial optimal date to have a “framework” for a deal in place, congressional aides say, in order to permit time for review and procedural delays in Congress. Congress can go beyond this time without much trouble, however.

* December 21. Target date for a final deal that would permit lawmakers a full holiday break, aides say.

The House could be in session through at least December 21 and will not adjourn “until a credible solution to the fiscal cliff has been found,” according to Republican House leadership.

* December 24. Some skeptical aides say Congress will work to Christmas Eve, possibly reaching a deal, or possibly not.

* December 25. Christmas holiday.

* December 26-31. If no deal has been reached by this time to raise the government’s debt ceiling of $ 16.4 trillion, the U.S. Treasury Department will have to take “extraordinary measures” to put off possible default, as it has done before.

If Congress does not have a “fiscal cliff” deal before Christmas, lawmakers may have to return to Washington this week.

* January 1. Expiration of low tax rates enacted under President George W. Bush and extended in 2010 under Obama. This event would raise taxes an estimated $ 1,600 per U.S. household annually.

Expiration of Obama payroll tax cut of 2011 and 2012. This would raise taxes an estimated $ 700 per household.

Deadline for dealing with “tax extenders” such as the corporate research and development tax credit. These and other items must be extended by year-end to be claimed in 2013.

Deadline for fix to the alternative minimum tax. Without action, the AMT will increase the tax bills for an estimated 27 million more Americans. The Internal Revenue Service will need to reprogram systems and delay refunds for millions of taxpayers until late March if the fix is not passed.

* January 1. New taxes take effect under Obama’s healthcare overhaul. One is a 0.9-percent increase in wage income tax for individuals earning more than $ 200,000 a year. The other is a 3.8-percent Medicare tax on investment income above the same level. These take effect regardless of the cliff outcome.

* January 2. Without congressional action to waive or postpone them, spending cuts of $ 1.2 trillion over 10 years begin. Known as “sequestration,” these were put in place in 2011 after a congressional “super committee” failed to devise a fiscal plan.

* January 3. The new Congress is scheduled to convene.

* January 7-11. Congress scheduled to be out of session.

* January 14. Congress scheduled to reconvene.

* January 20. Presidential inauguration day. A public ceremony is planned for the following day.

* February. White House releases annual proposed budget. Treasury exhausts its “extraordinary measures” and U.S. faces possible rating downgrade again.

* March. Funding of federal government expires with the expiration of a continuing resolution.

(Reporting by Kevin Drawbaugh, Richard Cowan and Kim Dixon; Editing by Fred Barbash and Eric Beech)

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TSX ends higher as financials gain; German data helps

TORONTO (Reuters) – Canadian stocks ended higher on Tuesday, helped by a strong showing from banks and other financial stocks as a German poll showed a sharp improvement in investor sentiment in Europe’s biggest economy.

The Toronto Stock Exchange‘s S&P/TSX composite index <.gsptse> added 51.89 points, or 0.42 percent, to close at 12,282.36.</.gsptse>

(Reporting by Alastair Sharp)

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Corruption probe shrouds Quebec in new darkness

MONTREAL (Reuters) – Half a century ago, a new crop of Quebec leaders sparked the so-called Quiet Revolution to eradicate the “Great Darkness” – decades of corruption that kept Canada‘s French-speaking province under the dominance of one party and the Catholic church.

The revolution’s reforms, including cleaning up the way lawmakers were elected and secularizing the education system, seemed to work, paving the way for decades of growth, progress and prominence as Canada emerged as a model of democracy.

Fifty years later, a public inquiry into corruption and government bid-rigging suggests the province’s politics are not as clean as Quebecers had hoped or believed.

Since May, when the inquiry opened in Montreal, Canadians have been getting daily doses of revelations of fraud through live broadcasts on French-language television stations. Corruption involving the Mafia, construction bosses and politicians, the inquiry has shown, drove up the average building cost of municipal contracts by more than 30 percent in Montreal, Canada’s second-largest city.

Last month, Montreal Mayor Gerald Tremblay resigned as did the mayor of nearby Laval, Gilles Vaillancourt. Both denied doing anything wrong, but said they could not govern amid the accusations of corruption involving rigging of municipal contracts, kickbacks from the contracts and illegal financing of elections.

Tremblay has not been charged by police. Vaillancourt’s homes and offices have been raided several times by Quebec’s anti-corruption squad, which operates independently of the inquiry, but no charges have been filed against him either. Police said the raids were part of an investigation but they would not release further details.

“Quebecers lived for several years under the impression that they had found the right formula, that their parties were clean,” said Pierre Martin, political science professor at the University of Montreal. Now, he said, “people at all levels are fed up.”

The inquiry must submit its final report to the Quebec government by next October. It has exposed practices worthy of a Hollywood noir thriller – a mob boss stuffing his socks with money, rigged construction contracts, call girls offered as gifts, and a party fundraiser with so much cash he could not close the door of his safe.

“Even though we are in the early days, what is emerging is a pretty troubling portrait of the way public contracts were awarded,” said Antonia Maioni, director of the McGill Institute for the Study of Canada in Montreal.

Quebec’s Liberals, the force behind the Quiet Revolution, launched the inquiry as rumors of corruption swirled. The government then called an election for September, a year ahead of schedule, in what was seen as an attempt to stop damaging testimony hurting its popularity.

The tactic did not help. Jean Charest’s Liberals lost to the Parti Quebecois, whose ultimate aim is to take the French-speaking province, the size of Western Europe, out of Canada.

‘IT WASN’T COMPLICATED’

According to allegations at the inquiry, the corruption helped three main entities: the construction bosses who colluded to bid on contracts, the Montreal Mafia dons who swooped in for their share, and the municipal politicians who received kickbacks to finance campaigns.

In Quebec, the Mafia has been dominated by the Rizzuto family, with tentacles to the rest of Canada and crime families in New York and abroad. But recently the syndicate has been facing challenges from other crime groups in Montreal, according to the Toronto-based Mafia analyst and author Antonio Nicaso.

The reputed godfather of the syndicate, Vito Rizzuto, has been subpoenaed to appear before the commission, but the date for his testimony has not been set.

The hearings have zeroed in on four construction bosses and how their companies worked with the Mafia, bribed municipal engineers and provided funds for mayoralty campaigns in Montreal, the business capital for Quebec’s 8 million people.

“It’s not good for the economy,” said Martin. “It’s not good for any kind of legitimate business that tries to enter into any kind of long-term relationship with the public sector.”

Quebec’s anti-corruption squad has arrested 35 people so far this year, staging well-publicized raids on mayoral offices and on construction and engineering companies. The squad has arrested civil servants and owners of construction companies, among others.

“I now must suffer an unbearable injustice,” Tremblay said in a somber resignation speech earlier this month after a decade as mayor of Montreal, saying he could not continue in office because the allegations of corruption were causing a paralysis at City Hall.

Some of the most explosive allegations at the inquiry, headed by Quebec Superior Court Justice France Charbonneau, came from Lino Zambito, owner of a now bankrupt construction company, and from a top worker for Tremblay’s political party, Union Montreal.

Zambito, who is seen as one of the smaller players and who also faces fraud charges, described a system of collusion between organized crime, business cartels and corrupt civil servants, with payments made according to a predetermined formula.

“The entrepreneurs made money, and there was an amount that was due to the Mafia,” Zambito told the inquiry. “It wasn’t complicated.”

Zambito said the Mafia got 2.5 percent of the value of a contract, 3 percent went to Union Montreal and 1 percent to the engineer tasked with inflating contract prices.

Tremblay did not respond to emails requesting comment on the allegations of corruption at city hall.

A former party organizer, Martin Dumont, alleged the mayor was aware of double bookkeeping used to hide illegal funding during a 2004 election.

Dumont said the mayor walked out of the room during a meeting that explained the double bookkeeping system, saying he did not want to know anything about it.

Dumont also described how he was called into the office of a fundraiser for Union Montreal to help close the door of a safe because it was too full of money.

“I think it was the largest amount I’d ever seen in my life,” Dumont said at the inquiry.

GOLF, HOCKEY, ESCORTS

The inquiry also saw videos linking construction company players with Mafia bosses. In one police surveillance video, a Mafia boss was seen stuffing cash into his socks.

A retired city of Montreal engineer, Gilles Surprenant, described how he first accepted a bribe in the late 1980s after being “intimidated” by a construction company owner. Over the years he said he accepted over $ 700,000 from the owners in return for inflating the price of the contracts.

Another retired engineer, Luc Leclerc, admitted to bagging half a million dollars for the same service. He said the system was well-known to many at city hall and simply part of the “business culture” in Montreal. He also got gifts and paid golf trips to the Caribbean with other businessmen and Mafia bosses.

Gilles Vezina, who is currently suspended from his job as a city engineer, concurred.

“It was part of our business relationships to get advantages like golf, hockey, Christmas gifts” from construction bosses, he told the inquiry in mid-November.

The gifts didn’t stop there. Vezina said he was twice offered the services of prostitutes from different construction bosses in the 1980s or early 1990s, which he said he refused.

The accusations are jarring for a country that prides itself on being one of the least corrupt places in the world, according to corruption watchdog Transparency International. But experts say corruption in Montreal was something of an open secret.

“The alarm signals have been going off here for 20 years and no one has done anything,” said Andre Cedilot, a former journalist who co-wrote a book on the Canadian Mafia.

Quebec’s new government has introduced legislation tasking the province’s securities regulator with vetting businesses vying for public contracts and allowing it to block companies that do not measure up.

Anti-corruption activist Jonathan Brun was not optimistic.

“You’ve got to use modern technology,” said Brun, a co-founder of Quebec Ouvert, a group that wants to make all information about contracts freely available rather than asking regulators to oversee individual companies. “You’ve got to change the entire system if you really want to fight corruption.”

(Writing by Russ Blinch; Editing by Janet Guttsman, Mary Milliken and Prudence Crowther)

Canada News Headlines – Yahoo! News

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