SNC-Lavalin's management teams have been investigated in a number of allegations under the Corruption of Foreign Public Officials Act regarding contracts beginning with the SNC-Lavalin Kerala hydroelectric dam scandal (1995–2008) through to the allegations involving the bribing of Libyan officials between 2001 and 2011.
SNC-Lavalin won a large infrastructure contract to renovate and modernize hydroelectric power stations with the Current Chief Minister of Kerala Pinarayi
Vijayan Indian government in 1995 which resulted in an alleged net loss to the Indian exchequer of 3745.0 million rupees, but led to no charges against the firm. SNC-Lavalin was subsequently accused of bribery and financial fraud related to the contract in 2008. A government investigation resulted in the expulsion of several Indian government officials.
Former Federal Bridge Corporation CEO Michel Fournier was charged with taking $2.35 million in bribes from SNC-Lavalin in return for the contract to repair the Jacques Cartier Bridge in the early 2000s. Fournier pleaded guilty and sentenced in 2017 to five years for his part in the bribery scheme. The RCMP launched a subsequent investigation called Agrafe 2 into potential criminal charges against the company concerning the bridge contract. Two of the company's subsidiaries and two former executives, Normand Morin and Kamal Francis, were charged in September 2021. The prosecution encouraged the company to negotiate a plea deal, given the top management had completely changed since the offences had occurred. Bribery payments were made through a Lebanese intermediary to Fournier, and were disguised as fictitious work on projects in Algeria and Libya. In May 2022 the company negotiated a deferred prosecution agreement and agreed to pay fines, surcharges and victim compensation totalling $29.6 million to settle the matter.
In 2016, commissioner of Canada elections was probing political party donations made by SNC-Lavalin employees. According to the source that provided information to CBC News, the investigation found that SNC-Lavalin reimbursed all of those individual donations—a practice forbidden under the Canada Elections Act—but Elections Canada reached an agreement with the company to avoid prosecution.
In May 2018, former SNC-Lavalin executive vice president Normand Morin was charged with making illegal donations to Canadian federal political parties, on recommendation from the director of public prosecutions, in the Court of Quebec. The charges allege that from 2004 to 2011, Morin orchestrated and solicited political donations from employees or their spouses to Canadian federal political parties anonymously on behalf of SNC-Lavalin, to be reimbursed afterwards. The amounts paid included about CA$110,000 to the Liberal Party and CA$8,000 to other Canadian political parties. In November 2018, Morin pleaded guilty to two of the five charges, and was fined $2,000. The remaining three charges were dropped by the prosecution.
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Libya (2011)
A 2012 CBC News report, said that the first reports of murky affairs surfaced against the company in 2010 in relation to contracts in Libya. According to a CBC News article, a Libyan bribery and fraud scandal involving crimes that took place from 2001 to 2011 led to charges in "connection with payments of nearly $48 million" to Libyan public officials. In the same article, it was reported that the company was also accused of "defrauding Libyan organizations of an estimated $130 million".
In 2015, SNC-Lavalin was charged with bribing Libyan officials in exchange for construction contracts between 2001 and 2011. In 2011, the RCMP began an investigation called Project Assistance which was triggered by a tip from Swiss authorities. According to an August 16, 2013 Financial Post article, Michael Novak, who had been the head of SNC International, had "signed several of the contracts between SNC and commercial consultants for work in Africa" having declared that "he believed he was dealing with veritable consultants" and having been later cleared of any wrongdoing by investigators, as reported by La Presse. This included a contract with former Libyan dictator Muammar Gaddafi's controversial government. By the summer of 2013, police alleged that the "unknown commercial consultants" had never existed and that Ben Aissa had "set up shell companies so he could pocket the [$56 million] himself". By July 2014, Aissa was jailed in Switzerland for "suspicion of corruption, fraud and money-laundering in North Africa". When SNC-Lavalin pulled out of Libya in 2011, it left behind $22.9 million in Libyan banks. In 2013, Roy filed a countersuit for wrongful dismissal, claiming lost wages and damages to his reputation, alleging that he had been framed and scapegoated by higher-level executives whose directives he was obliged to follow.
By February 2012, SNC-Lavalin investors had found out that audited financial statements had been delayed to accommodate an internal review relating to SNC-Lavalin's operations. The internal review probed $35 million of unexplained payments in Libya. Prior to the launch of the investigation, there had been months-long media speculation about the company's work in Libya and its ties to the Muammar Gaddafi family. In 2012, the RCMP investigated the company on these charges in the Project Assistance investigation and, in 2015, they charged SNC-Lavalin with "fraud and corruption", which the company indicated they would contest in court.
On December 18, 2019, SNC-Lavalin Construction Inc. pleaded guilty to fraud contrary to section 380(1) a) of the Canadian Criminal Code. The company stated that, between 2001 and 2011, over $47.5 million had been paid to Al-Saadi Gaddafi. The money was directed through two representative companies, both listing Riadh Ben Aissa as the sole beneficial owner. In return for the bribes, Al-Saadi Gaddafi applied his influence to the construction contract bidding process, ensuring contracts were awarded to SNC-Lavalin Construction. Payments of personal benefits totalling over $73.5 million were also made through the representative companies to Ben Aissa and Sami Bebawi, a former vice-president of SLCI. As part of its plea agreement with the Public Prosecution Service, SLCI was fined $280 million and given a three-year probation order. In exchange, the remaining corruption and fraud charges against SNC-Lavalin Group Inc., SNC-Lavalin Construction Inc. and SNC-Lavalin International Inc. were stayed.
After the bribes were discovered, the audit committee of the company's board launched an investigation into the matter, led by directors such as Claude Mongeau, then the CEO at Canadian National Railway. During the audit committee investigation, the Financial Post wrote a story critical of full-time CEOs serving on the boards of directors of other companies, calling out Mongeau specifically.
McGill University; the Arthur Porter kick-back scandal (2011–2014)
Charges were laid against senior executives from 2014 through 2019 in the bribery cases involving Arthur Porter at the McGill University Health Centre. According to a 2012 article in the Globe & Mail, these reports prompted calls for Canada to tighten bribery laws.
According to the National Post, SNC-Lavalin employees allegedly were involved in fraud and forgery in relation to a $22.5 million kick-back described as "consulting fees" to Arthur Porter on the contract to build the new $1.3 billion hospital at the McGill University Health Centre's CEO in violation of the Quebec Health Act. SNC-Lavalin were awarded the contract even though they were outbid by $60 million. The case led to an investigation by the Charbonneau Commission. Porter resigned from the post on December 5, 2011, in light of substantial public pressure. Porter was arrested in Panama on fraud charges on May 27, 2013, which alleged that he took part in the kick-back scheme. The CBC called it the biggest fraud investigation in Canadian history. SNC-Lavalin CEO, Pierre Duhaime in March 2012, was arrested on fraud charges by Quebec authorities on November 28, 2012.
SNC-Lavalin sued Duhaime for millions of dollars in damages, claiming that he stained its goodwill by means of the McGill University Health Centre superhospital scandal. The company claims that Duhaime "facilitated the execution of the embezzlement" of $22.5 million of company funds. Duhaime was charged with several counts related to the bribe. In February 2019 he pleaded guilty to one count of breach of trust. The prosecution vacated some 15 further charges.
Padma Bridge (since 2011)
An investigation into an alleged graft related to 2011 bids for the construction of the 6.51 kilometre (four-mile) USD$3 billion road—rail bridge crossing the Padma River in Bangladesh, resulted in the former SNC-Lavalin employees being cleared of all charges by a Canadian court. In May 2011, two former SNC-Lavalin International Inc. (SLII) employees Ramesh Shah and Mohammad Ismail met government officials in Bangladesh to discuss a bid for the $50-million supervision contract to build the Padma Bridge, a project estimated to be worth US$3 billion. Part of the allegations were related to SLII common practice of list project consultancy costs (PCC), also known as project commercial cost, as a line item in internal budgets documents related to the bidding process. As a result of the original investigation by World Bank investigators who worked with RCMP officers, in September 2013, the World Bank blacklisted SNC-Lavalin and its affiliates from bidding on the World Bank's global projects. The World Bank had originally offered to fund $1.5 billion of the $3 billion but pulled back following the allegations. However, on February 11, 2017, the Ontario Superior Court found no proof of the Padma bridge bribery conspiracy, dismissed the case, and acquitted the ex-SNC-Lavalin executives. According to the Dhaka Tribune, Justice Ian Nordheimer rebuked the Canadian police, saying: "Reduced to its essentials, the information provided in the [wiretap applications] was nothing more than speculation, gossip, and rumor."
SaskPower serious design flaws (2015)
In 2015, internal documents from SaskPower (the crown corporation that is the principal electric utility in Saskatchewan, Canada), revealed that there were "serious design issues" in the carbon capture and storage system at its coal-fired Boundary Dam Power Station, resulting in regular breakdowns and maintenance problems that caused the unit to be operational only 40% of the time. SNC-Lavalin had been contracted to engineer, procure, and build the facility, and the documents asserted that it "has neither the will or the ability to fix some of these fundamental flaws". The low productivity of the plant had in turn meant that SaskPower was only able to sell half of the 800,000 tonnes of captured carbon dioxide that it had contracted to sell to Cenovus Energy for use in enhanced oil recovery at a cost of $25 per tonne. In addition to the lost sales, this meant that SaskPower had been forced to pay Cenovus $12 million in penalties. In 2017, Cenovus sold its Saskatchewan operations to Whitecap Resources. By September 2018, "SaskPower and SNC-Lavalin had completed mediation and were headed to binding arbitration". In July 2018, SaskPower announced, in its annual report, that they would not be proceeding with retrofitting the two aging facilities near Estevan—Boundary Dams 4 and 5 (BD4 and BD5) with carbon capture and storage (CCS). According to a February 11, 2019 CBC News article, SNC-Lavalin has "received about $765,800,000 in [Saskatchewan provincial] government contracts from 2009 to 2018".
SNC-Lavalin affair (2019)
Following a 2017 public consultation process, the Government of Canada moved forward with the establishment of a "made-in-Canada version of a deferred prosecution agreement (DPA) regime", called the "Remediation Agreement Regime", which was introduced in the March budget and came into effect in June 2018. By 2019, SNC-Lavalin, still facing criminal charges in regard to several contracts, began investigating the possibility of a DPA under the newly introduced Remediation Agreement Regime, as early as April 2018. On February 10, 2019, the Toronto Star reported that Opposition Leader Andrew Scheer met with SNC-Lavalin CEO Neil Bruce on May 29, 2018, to discuss the remediation agreement. The director of public prosecutions informed SNC-Lavalin on October 9, that its DPA option was rejected because "is not appropriate in this case". According to the National Post, "If the company is convicted it would be barred from bidding on federal contracts for 10 years, potentially costing it billions in forgone revenue." In response, the company's share prices dropped, leaving it vulnerable to a hostile takeover. According to the Montreal Gazette, Quebec Premier François Legault said that SNC-Lavalin was one of ten publicly traded companies headquartered in Quebec that the province considers to be "strategic" and therefore in need of protection from a takeover that would force the company to leave the province.
On February 8, 2019, the Globe & Mail reported that sources close to the government said that the Prime Minister's Office allegedly had attempted to influence Jody Wilson-Raybould's decision concerning SNC-Lavalin's request for a DPA, while she was Minister of Justice and Attorney General. When asked about the allegations, Justin Trudeau said that the story in the Globe was false and that he had never "directed" Wilson-Raybould concerning the case. Wilson-Raybould refused to comment on the matter citing solicitor-client privilege. Under pressure from the Conservative Party of Canada and the New Democratic Party (NDP), on February 11, 2019, the conflict of interest and ethics commissioner launched an inquiry into allegations of political interference and a possible violation of the Conflict of Interest Act in the SNC-Lavalin case.
On February 18, 2019, Gerald Butts, Trudeau's principal secretary, resigned and denied that he or anyone else in the Prime Minister's Office attempted to influence Wilson-Raybould.
On February 27, 2019, Wilson-Raybould spoke about the SNC-Lavalin controversy at a hearing of the House of Commons justice committee. In her first substantial public statement on the matter, she testified that she was inappropriately pressured to prevent the Montreal-based company from being prosecuted in a bribery case.
On August 14, 2019, Mario Dion, conflict of interest and ethics commissioner, released a report that said Trudeau contravened section 9 of the Conflict of Interest Act by improperly pressuring Wilson-Raybould. The report details lobbying efforts by SNC-Lavalin to influence prosecution since at least February 2016, including the lobbying efforts to enact DPA legislation. The commissioner has also found that Trudeau acted improperly when using his position of authority over Wilson-Raybould in an effort to have her overrule the director of public prosecution's decision not to negotiate a deal with SNC-Lavalin that would see the company avoid criminal prosecution over charges of corruption and fraud stemming from an RCMP investigation. The report analyses SNC-Lavalin's interests and finds that the lobbying effort advanced private interests of the company, rather than public interests. The report's analysis section discusses the topics of prosecutorial independence and Shawcross doctrine (dual role of Attorney General) to draw the conclusion that the influence was improper and a violation of Conflict of Interest Act.
Company responses
SNC-Lavalin CEO Pierre Duhaime resigned in March 2012 and was arrested by Quebec's anti-corruption squad on charges including fraud on November 28, 2012. He was replaced by Ian A. Bourne, who was also the chairman of Ballard Power Systems and a member of the CPP Investment Board. Bourne sat on SNC-Lavalin's board of directors beginning in 2009, before the "allegations of fraud and corruption in Libya" were made. As interim CEO from May 2012 to October 2012, Bourne oversaw a "major overhaul" of SNC-Lavalin's culture. Bourne resigned as chairman and as a director in March 2015 and was replaced by Lawrence N. Stevenson, who sat on SNC's board from 1999 until 2018.
Just before retiring from SNC-Lavalin in May 2012, Gwyn Morgan—who had been chair since 2006—hired American civil and environmental engineer Robert Card as CEO. Card was instructed to revamp the company's "ethics and compliance standards" and oversee the departure of existing management that had been involved in the scandals. During this period, over 10,000 Canadian employees left the company, many of them voluntarily. By 2013, when Card had completed his "strategic offensive" against previous SNC-Lavalin management, Neil Bruce, a native of Scotland, replaced Card. By August, four senior executives had departed, including Gilles Laramée, former CFO, Ric Sorbo, former head of SNC's oil and gas business, Patrick Lamarre, head of the power unit, and Michael Novak. SNC-Lavalin also dismissed financial controller Stéphane Roy.
Bruce undertook a campaign to improve ethics and compliance at all levels of the company management. This included using Transparency International's corruption rankings as a guideline in deciding which countries with which SNC-Lavalin would do business. In June 2019 Bruce retired from the company.
In 2019, the investigations continued to affect the company and its CEO Bruce. SNC-Lavalin continued to face criminal charges in 2019 in regards to alleged bribes contracts between 2001 and 2011. The company failed to receive a remediation agreement that would have provided a reprieve from criminal charges and now faces a potential conviction. A new investigation involving potential bribery in relation to a repair contract in the early 2000s, has been reported by La Presse.
