SNC-Lavalin Corruption Probe Moves to Alberta

The international corruption probe of Quebec-based SNC-Lavalin has now moved to Alberta. SNC, which is building high voltage power lines in Alberta together with its wholly-owned subsidiary (AltaLink) and EPCOR, is now being accused of portraying a $33.5 million payment as a payment related to an Alberta tar sands treatment plant project, whereas the funds were in fact destined for somewhere in the Middle East (Globe and Mail).

The Globe and Mail wrote, “In December, 2011, SNC’s former head of construction, Riadh Ben Aissa, persuaded SNC’s then-chief executive, Pierre Duhaime, to sign off on the transfer of $33.5 million in relation to a bitumen froth treatment plant that the company had recently been contracted to build for Canadian Natural Resources Limited, two sources close to SNC have said in interviews. But internal investigations at SNC, sources said, reveal the money had nothing to do with the froth treatment plant – which was cancelled in December, 2012…Since the RCMP and Quebec’s anti-corruption task force launched investigations into the company, it has emerged in court documents and media reports that the company often transferred millions of dollars to corporations in offshore jurisdictions, such as the British Virgin Islands and the Bahamas, who were purportedly acting as sales ‘agents’ for projects in other countries. Since the scandal has erupted, the company has launched a public-relations blitz, hiring an executive specialist in ethics and reviewing how it pays such agents.”

As the SNC corruption probe widens, there appears to be no end to the lengths SNC-Lavalin has gone to secure lucrative contracts. CBC News recently reported, “Canadian engineering giant SNC-Lavalin is facing a new scandal and a $1.24 million wrongful dismissal lawsuit alleging attempted coverups by executives involving millions of dollars in controversial payments to an agent it employed for a dam project in Angola.” The latest controversy follows the resignation of SNC Executive VP Patrick Lamarre and the dismissal of three SNC employees – Joseph Salim, Jean-Pierre Mourez and John Brown – who are suing SNC.

The net has also recently been cast wider in relation to investigations into alleged bribery payments made by former SNC executives to Libya’s Gadhafi regime (CBC News {2}). Swiss authorities are investigating Sami Bebawi, the SNC executive predecessor to SNC’s former VP Riadh Ben Aissa. It’s also alleged that one or more of the former SNC executives set up several companies, registered in the British Virgin Islands, which received vast sums of money for their personal gain.

Back in Canada, SNC VP Yves Cadotte recently admitted at the Charbonneau Commission – Quebec’s construction corruption inquiry established in 2011 – that SNC helped raise money for Quebec’s political parties despite a three-decade-old law that makes corporate donations illegal in Quebec (Winnipeg Free Press). The Free Press reported, “Yves Cadotte said dozens of SNC executives, and sometimes their spouses, donated just over $1 million to the Quebec Liberal party and Parti Quebecois…A small majority of that cash went to the Liberals, although the PQ got nearly 50 per cent of the amount. He said executives would get bonuses after they donated, with the amount of the bonus greater than the donation amount.” Yesterday, Cadotte testified at the Commission that the illegal political financing and construction industry collusion did not only occur in Montreal but also in the City of Longueuil (CTV News).

Chris MacDonald, Director of the Jim Pattison Ethical Leadership Education & Research Program at the Ted Rogers School of Management, recently wrote an article in Canadian Business titled “Can SNC’s Reputation Recover?” He wrote, “Canadian engineering giant SNC-Lavalin continues to provide plenty of fodder for ethics classroom discussion, and for making news in all the wrong ways… the company needs to see that its reputation has to be built on more than its ability to pull off big engineering projects. SNC needs to be a company all stakeholders – including investors – can trust, because trust is the foundation of business. Given its track record so far, if I were looking for a big engineering contractor I wouldn’t put much trust in SNC at all. If they play fast-and-loose with the rules as much as they seem to, what’s to say they aren’t going to play fast-and-loose with their obligations to me, too? Finally, the company needs to get past its apparent belief that bribery is just part of doing business.”

The Globe and Mail has been closely following the SNC-Lavalin Canadian and international corruption probes and scandals.  This recent Globe article provides a bit of history about the players and the countries involved. Also see this link and Making Money by Making Friends for more information on the SNC-Lavalin corruption probe.

SNC-Lavalin is building the Heartland power line together with AltaLink (wholly-owned by SNC-Lavalin) and EPCOR. The massive towers are up to 253 feet tall. For size comparison, note how small the workers are on top of the tower on the left.

The Heartland towers appear a lot closer together than AltaLink and EPCOR proposed in their application to the Alberta Utilities Commission.

~ by RETA on March 19, 2013.