SNC-Lavalin Inc. announced this morning it has replaced president and CEO Bob Card with Neil Bruce, and told CBC News the move is "completely unrelated" to new allegations, published today, in a civil suit that claims giving bribes to win contracts was part of the past practices of the company.
The Montreal-based engineering firm, which Card took over in the spring of 2012 to clean up past issues, faced new allegations Monday from a former executive who claims the company has made him a "scapegoat," and alleges other top executives for years endorsed bribes and lavish gifts — including a yacht and even prostitutes — to win contracts from Libya's Gadhafi regime.
The serious allegations by Riadh Ben Aïssa, SNC's former executive vice-president of construction, are contained in a newly filed court pleading as he defends himself against one of a number of civil lawsuits by the company, which itself is facing criminal charges of foreign corruption.
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"SNC is only trying to use Ben Aïssa as a scapegoat by presenting him as solely responsible for acts that SNC was fully aware of, accepted and encouraged," the court pleading states, naming a list of former CEOs, executive vice-presidents and the former chief financial officer.
"After having behaved as such for many years, SNC now tries to escape unscathed by blaming all its acts on Ben Aïssa."
An SNC press release Monday morning said the transition from Card to Bruce, the chief operating officer who came to SNC in January 2013, is part of a "smooth transition" at an "important stage in SNC-Lavalin's development," stated Lawrence Stevenson, SNC's board chair.
"Bob's tenure left a strong legacy during a critical time for the company, with a far-reaching transformation that changed the face of the executive team, repositioned the company strategically ... as well as turned its ethics and compliance system into a benchmark for the industry."
Bribes won billions in work
Ben Aïssa is back in Canada after serving 2½ years in a Swiss jail, having admitted to corruption and money laundering tied to SNC projects in Libya. He's awaiting trial alongside former CEO Pierre Duhaime on charges of fraud for $22.5 million in alleged bribes paid to win SNC the contract to build a Montreal superhospital.
SNC-Lavalin, which was heavily invested in Libya, has been embroiled in controversy since the violent overthrow of the Gadhafi dictatorship in 2011, and has sued Ben Aïssa, blaming him for many of its troubles.
This pleading from the Tunisian-born executive offers the first extensive account of his actions at SNC and marks a major counterattack against his former company. None of the allegations in it have been tested in court.
SNC is seeking to reclaim $2 million from him, former vice-president of finance Stéphane Roy and consultant Cyndy Vanier, alleging they defrauded the company and conspired in a secret, illegal plot to move Moammar Gadhafi's son Saadi and his family to Mexico, contrary to UN travel bans at the time. Ben Aïssa flatly denies any such plot.
Ben Aïssa is also named in a second lawsuit by SNC seeking $127 million from him and his predecessor, alleging embezzlement.
In the new statement of defence, Ben Aïssa describes being tasked in 1995 under then-CEO Jacques Lamarre to develop new markets in North Africa, and then using his widely known friendship with Saadi Gadhafi to help SNC enter into a "50-50 joint venture" with a Libyan government agency known as the Great Man Made River Authority. Ben Aïssa sets out a long list of SNC contracts in Libya, worth billions, that arose from the partnership and that he alleges were won through kickbacks paid to side agents.
"Most of SNC's senior executives knew that the so-called agency contracts were in reality bribes paid to Libyan foreign officials in exchange for the award of the sole-source contract," the former construction executive alleges.
What's more, Ben Aïssa declares the money was "fraudulently charged back" to the Libyan government by embedding the costs in the project before SNC submitted its offers.
Gifts: yacht, prostitutes, Spice Girls
Ben Aïssa claims SNC's senior management — including Lamarre, Duhaime, former chief financial officer Gilles Laramée, ex-chairman of SNC-Lavalin International Michael Novak and former executive VP Sami Bebawi — knew about Saadi' Gadhafi's "importance in helping SNC securing lucrative contracts in Libya for a long time."
To cement ties, Ben Aïssa alleges specific SNC executives signed off on or approved numerous favours to help Gadhafi, including:
- providing SNC staff and hiring university professor as tutors;
- helping to obtain a Canadian visa;
- considering appointing Saadi Gadhafi an SNC vice-president;
- officially sponsoring his Italian Serie A professional soccer team.
One of the largest expenses included the purchase of a Palmer Johnson yacht worth $38 million for Saadi Gadhafi "organized and validated by CFO Laramée and approved by the then CEO Lamarre," Ben Aïssa alleges in the court document.
Saadi Gadhafi visited Canada in 2008, and SNC Lavalin picked up the bill — more than $2 million, Ben Aïssa claims. Expenses included hotels, restaurants, limousines and security.
Ben Aïssa alleges some of those expenses were invoiced through security company Garda, and then submitted and paid by SNC, including bills for more than $25,000 in clothes from Harry Rosen, "services of prostitutes and tickets to a Spice Girls concert."
The Gadhafi son visited again the following year, and SNC hired American rapper 50 Cent to entertain at a party for Saadi and SNC employees, which cost the company $550,000, Ben Aïssa states.
Beyond covering travel expenses, Ben Aïssa alleges SNC paid for a Toronto condo for Gadhafi and that Toronto employees were "mandated by the then CEO Lamarre to take charge of the design and decoration fees."
"Many of SNC's senior executives were aware, encouraged, and accepted Ben Aïssa's actions, which were all done for SNC's benefit," the pleading states.
CBC/Radio Canada attempted to contact the various executives named, all of whom are no longer with the company. Most declined to comment. Duhaime and Laramée declined to comment. Former CEO Lamarre would only say he stands by previous comments to CBC that he was betrayed by Ben Aïssa. Michael Novak, former head of SNC-Lavalin International, denied knowing the details of financial arrangements in SNC's construction division and rejected his former colleague's claims.
Denies smuggling plot
In the summer of 2011 as civil war was toppling Libya's Gadhafi regime, Ben Aïssa states the company "was going through extraordinary lengths to accommodate and compensate members of Saadi Gadhafi's family," including placing his wife temporarily on the payroll of SNC's offices in Morocco. "Duhaime and Laramée, then CEO and CFO of SNC, were aware of and accepted this," he alleges.
In early 2012, Ben Aïssa and VP finance Roy were forced out of SNC, after allegations surfaced they were connected to an alleged plot to smuggle Saadi Gadhafi's family out of Libya to Mexico. They had hired a Canadian mediator Cyndy Vanier who in November 2011 was arrested and jailed in Mexico accused of arranging planes, fake passports and safe houses. She was released after a court ruled her rights had been violated and she has returned to Canada.
Ben Aïssa, in his lawsuit pleading, flatly denies involvement in any such conspiracy.
He admits to meeting Vanier to hire her for a "fact finding" mission to Libya during the conflict. But he claims it was a legitimate contract for on the ground information gathering and advice as SNC scrambled to deal with 4,500 employees affected by the civil war.
Ben Aïssa's legal defence concludes by calling SNC's suit against him "nothing less than an after-the-fact re-writing of history,... a blame-shifting exercise by SNC made solely for public relations purposes."