During Libya’s long dictatorship, the Gadhafi regime repeatedly turned to SNC-Lavalin for its construction needs. The Montreal-based company got a $500-million contract to build an airport in Benghazi and a $275-million deal to put up the Gharyan prison.
But there was a cost to doing business with the Libyans: SNC-Lavalin, Canada’s largest engineering and construction company, allegedly funnelled $160-million in kickbacks to Moammar Gadhafi’s son, some of which paid for luxury yachts.
According to a search warrant affidavit unsealed by a Montreal court Friday at the request of the National Post, which first broke the story of the company’s close ties to Saadi Gadhafi, the money followed a convoluted trail through several countries.
In one instance, SNC-Lavalin allegedly transferred $16-million into an account at Fimbank First National in Malta, the island nation off the Libyan coast. From there the money was sent to Geneva’s Crédit Agricole and the Arab Banking Corp. in Milan, Italy.
The RCMP affidavit said the payment ended up in three bank accounts, all of them held by Dorion Business Ltd., a company owned by Saadi Gadhafi. The transfer was labeled, “Consultant commissions paid by the Societé Canadienne S&C Lavalin.”
The man accused of making the payments, Riadh Ben Aissa, was then SNC-Lavalin’s vice-president. He has since left the company and is now jailed in Geneva without charge while the Swiss investigate his financial dealings in North Africa.
The former Canadian executive and Gadhafi “maintained an amicable and mutually beneficial relationship over several years,” said the affidavit, based partly on the results of an ongoing probe in Switzerland, where Ben Aissa did his banking.
Investigators tracked the flow of bribes from SNC-Lavalin accounts in Canada and the United Kingdom to offshore companies controlled by Ben Aissa. The money was then allegedly transferred to offshore companies owned by Gadhafi.
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“It is alleged that these sums of money were paid as compensation for having influenced the granting of major contracts to SNC-Lavalin Int.,” Cpl. Brenda Makad, a member of the RCMP anti-corruption squad, wrote in the sworn statement. “Ben Aissa offered bribes to the dictator’s son with the goal of securing the granting of contracts for construction/engineering within Libya.”
The payoffs “served to buy yachts for the benefit of Saadi Gaddafi,” the corporal wrote. One of the boats was identified by police as the Hokulani. A sleek 45-metre superyacht by that name was sold in 2011. The asking price was $28.5-million. It has two VIP suites, a Jacuzzi, an entertainment room with a flat screen TV and accommodation for 10.
The RCMP alleged that SNC-Lavalin also spent $200,000 decorating Gadhafi’s penthouse suite in Toronto, while the company’s former controller Stéphane Roy paid the condo fees. The company also footed the bill for security, hotel and a private jet when Gadhafi visited Canada, police added.
The 59-page RCMP statement dated April 11, 2012, was used to obtain a warrant to search the Montreal headquarters of SNC-Lavalin. When the search took place on April 13, police would not explain what they were looking for. Nor have Swiss authorities explained why they are holding Ben Aissa.
But a partly-redacted version of the warrant affidavit shows the investigations focus on the company’s ties with Gadhafi, the playboy son of Col. Moammar Gadhafi, the longtime dictator and sponsor of terrorism who was killed in Oct. 2011.
It provides the first look at the substance of police investigations that have rattled the Canadian business icon, shaken the confidence of its investors and triggered two class action lawsuits. The amounts in question are far higher than those previously disclosed by the company as having gone missing.
Ben Aissa has denied any wrongdoing. The police affidavit contains unproven allegations presented to a justice of the peace to obtain a search warrant. Nonetheless, they are sure to raise fresh questions about how alleged bribery on such a scale was able to take place.
In a press release Friday, SNC-Lavalin said the RCMP affidavit included information the company had voluntarily given to the authorities in March 2012 but “also contains some information of which we were not previously aware.”
“We cannot determine the veracity of certain allegations in the affidavit. 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.
“We are eager for this situation to be resolved in the courts and will continue to do everything in our power to assist the authorities to get to the bottom of these issues as rapidly as possible. … Should the allegations relating to any of the individuals in the affidavit be proven, we plan to act swiftly and resolutely to address any damages that may have been caused to the company and its interests.”
Ben Aissa and Roy were forced out of the company in February after an internal audit uncovered $56-million in payments to recipients who could not be traced. Ben Aissa was later arrested in Switzerland on allegations of fraud, corruption and money-laundering. Pierre Duhaime, the CEO of Lavalin, also left the company and was charged with an unrelated fraud in November.
The RCMP search in Montreal followed a request for assistance by Swiss authorities examining Ben Aissa and his Swiss lawyer Roland Kaufmann. A spokeswoman for the Swiss Attorney General said the investigation was continuing.
“Two persons are under investigation and the person you’re interested in is still on remand,” Jeannette Balmer said. “Due to secrecy obligations that we have to respect, we are currently unable to provide you with more detailed information.”
Work on SNC-Lavalin’s projects in Libya was suspended in 2011 after rebels began a revolt to unseat the Gadhafi regime. The RCMP affidavit implicated Ben Aissa and Roy in a subsequent alleged plot to smuggle Gadhafi and his family to Mexico.
National Post with files from Nicolas Van Praet
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