SNC-Lavalin document provides details of alleged bribes to Gadhfi family

Engineering firm accused of paying Moammar Gadhafi’s son $160 million in kickbacks

CPJanuary 25, 2013

An RCMP officer stood guard at the main security desk last April as the RCMP executed a search warrant at SNC Lavalin in Montreal.

MONTREAL — SNC-Lavalin says an unsealed affidavit used to obtain an RCMP search warrant of its headquarters last April contains new details about the company’s alleged ties with Libya’s Gadhafi family.

However, the embattled engineering giant says it cannot confirm the veracity of the new information and is reviewing the document to see what actions it may take. It has vowed to act swiftly if the allegations are proven.

In the sworn statement unsealed by a Quebec court Friday, former officials with the Montreal-based company are accused of paying the son of the dictator Moammar Gadhafi $160 million in kickbacks to obtain major contracts in Libya, some of which police say paid for luxury yachts.

The search warrant document says the bribes were paid to Saadi Gadhafi by former SNC vice-president Riadh Ben Aissa, who is now jailed in Switzerland.

Published reports say the RCMP document also implicated Ben Aissa and former SNC-Lavalin controller Stephane Roy in an alleged effort to smuggle Gadhafi’s son and his family to Mexico as the regime was failing in 2011.

SNC-Lavalin (TSX:SNC) says the affidavit contains some unspecified information that it voluntarily provided to authorities in March.

“It also contains some information of which we were not previously aware. We cannot determine the veracity of certain allegations in the affidavit,” it stated in a news release.

It noted that affidavits contain “unproven information and allegations” gathered by authorities in the context of an investigation that are submitted to a judge in order to obtain a search warrant.
SNC-Lavalin has taken a number of steps to improve its governance and requirement that employees adopt ethical behaviour.

It hired former Watergate investigator Michael Hershman as an independent compliance adviser to SNC’s president. He will complement the work of former FBI director Louis Freeh’s risk management company, which has been assessing the progress of the implementation of the company’s ethics and compliance program.