Montreal's towing industry has been infiltrated by organized crime groups that resort to violence and intimidation to secure profits, according to a report released Monday by the city's inspector general.

The report contains witness accounts of an industry in which companies aggressively seek to limit competition in the boroughs where they operate. The names of individuals and businesses were withheld to protect the witnesses' safety.

These companies, many tow-truck owners told the inspector general, have ties to one of the main organized crime networks in the city, be it the Hells Angels, the Mafia or street gangs.

Protection money demanded

The owner of one company said he had to pay between $500 and $700 per week in protection money to a member of the Hells Angels if he wanted to continue operating without competition in his borough.

Failure to pay, the report reads, could result in threats or acts of intimidation. There appears, moreover, to be little desire on the part of organized-crime members to disguise their affiliations.

"The investigation showed that entrepreneurs who are members of criminal organizations, or close to influential organized-crime members, don't hesitate to display their colours in the milieu," reads the report by Denis Gallant, the city's inspector general.

Mayor Denis Coderre admitted he was taken aback by the findings.

"When you're looking at it, and reading, it's scary," Coderre said of Gallant's report. "You're asking yourself, 'What's going on here?'"

Coderre said the city had already taken measures to reduce the influence of organized crime within the industry, including transferring oversight of tow trucks from the city's taxi bureau to the police force.

Coderre accused of being too passive

The opposition at city hall, though, said the mayor could have done more to limit the "wild west" situation in the towing industry.

"What disturbed me was the passivity of the Coderre administration in tackling the problem," said Alex Norris, a councillor for Projet Montréal.

Norris attributed the reach of organized crime to the city's failure to hold calls for tenders in the areas where no firm had won the rights to tow vehicles.

Gallant's bombshell report also details how the owners of some towing companies have managed to skirt measures designed to keep them from receiving public contracts.

A handful of entrepreneurs have been subjected to a five-year ban from bidding on city contracts, for having participated in price collusion schemes.

But Gallant writes that they have been able to get around the ban by using their spouse's name or by setting up shell companies.

Gallant's report includes 11 recommendations, including instituting tougher vetting practices before city towing contracts are awarded.