At least $80M in new contracts to SNC-Lavalin since guilty plea over payments to dictator's son: IJF analysis

In the four years since a division of SNC-Lavalin pleaded guilty to fraud for its underhanded dealings in Libya, the engineering firm continues to enjoy a fruitful relationship with the federal government, racking in at least $80 million in contracts, according to an IJF analysis.

SNC-Lavalin was renamed the AtkinsRéalis Group last year after decades of scandal.

Records in the IJF’s new procurement database reveal that the Montreal-based company and its subsidiaries have been awarded those public funds through more than 460 contracts with Ottawa since the fraud settlement on Dec. 18, 2019. 

The IJF's analysis doesn't include earlier contracts that have been renewed or amended since the guilty plea, like the $182 million in additional funds that have gone toward a 2011 contract to service National Defence vessels.

The 2019 plea capped off a year of political turmoil in Ottawa that nearly saw the fall of the Liberal government over allegations Prime Minister Justin Trudeau’s office had tried to interfere in the prosecution. Canadians learned that SNC-Lavalin had repeatedly pushed for a deferred prosecution agreement to avoid a criminal trial and possible ineligibility from winning government contracts.

But even though those efforts failed, the specific charge included in the guilty plea still allowed the company to escape automatic disqualification.

The large volume of taxpayer money still flowing to SNC-Lavalin and AtkinsRéalis came as no surprise to Jennifer Quaid, a law professor at the University of Ottawa who closely followed the criminal case.

“The plea may make for a bad visual for people, but legally there was nothing that prevented the government from contracting with them,” she said.

She pointed out that the criminal settlement was with a now-inactive SNC-Lavalin subsidiary and not the parent company, creating a sort of legal insulation. 

“The real question is: Is there anything you can do to change the process that results in awarding these contracts? And my sense of procurement right now is that oftentimes there are simply not enough bidders,” Quaid said.

“But there is also an ability for some of the players who might otherwise be disqualified to find a way to be qualified anyway.”

In an emailed statement, AtkinsRéalis spokesperson Laurence Myre Leroux stressed that the events leading to the guilty plea all happened before 2012.

“Over the last decade, SNC-Lavalin, now AtkinsRéalis, has gone through a profound transformation culturally, operationally and in its governance, with a new leadership team and a robust and transparent integrity and compliance program,” Leroux said. That program includes mandatory annual code of conduct certification and integrity training for all employees, she added.

Those changes follow numerous allegations of bribery and corruption abroad and at home in the first two decades of the 21st century — some so serious that SNC-Lavalin was banned from contracts with the World Bank for eight years.

Federal government spokespeople did not respond to requests for comment by deadline.

The tally also only covers joint ventures where SNC-Lavalin or AtkinsRéalis was listed as the first vendor on the contract.

Since the 2019 settlement, IJF calculations suggest that SNC-Lavalin and AtkinsRéalis’s annual federal contracts have been valued between at least $14 million and $24 million. In fact, the most lucrative year in that time was 2020, immediately after the guilty plea. So far this year, AtkinsRéalis has been awarded more than $7 million in federal contracts.

The total annual dollar values for the recent federal contracts in the IJF databases are on par with the years immediately before the guilty plea but not as high as some previous years. In 2016, for example, SNC-Lavalin was awarded at least $42 million in contracts.

The largest contract since the plea was awarded in 2020. It’s now valued at $5.7 million with Public Services and Procurement Canada for remediation of contaminated sites in B.C. and Yukon. The company was also awarded about $8.5 million in contracts with governments in B.C. over the same period.

‘A classic Canadian compromise’

SNC-Lavalin Construction’s 2019 guilty plea centred on serious wrongdoing in Libya between 2001 and 2011. It included using shell companies to direct more than $47 million to the son of then-dictator Muammar Ghadafi to secure construction contracts.

Lawyer and University of Toronto adjunct professor Kenneth Jull, whose practice includes financial crimes and corporate compliance, described the plea deal as “deferred prosecution through the back door.” 

“What they arrived at was a classic Canadian compromise,” Jull said. “SNC-Lavalin would enter a plea to the offence of fraud against the people of Libya. Why that’s important is that fraud against people of another country is not a debarrable offence.”

The company did not emerge completely unscathed, though. Several SNC-Lavalin entities were automatically banned from bidding on tenders in Quebec for five years because of policies in that province.

The rules at the national level have changed in a few ways since then. 

Just this May, the Canadian government updated its policy on ineligibility and suspensions for procurement, expanding the types of fraud offences that could disqualify a company from bidding on contracts. 

Jull explained that, previously, suppliers could only be debarred for fraud against the Crown, but now all types of fraud are covered by the government policy. However, the policy only captures convictions, pleas and other agreements made within the last three years.

At the same time, Quaid pointed out that suspension or ineligibility will no longer be automatic, as it was under the old policy. Now, a company’s ability to bid on government contracts will be decided by a new registrar of ineligibility and suspension.

“We're actually entering a phase where debarment may occur even less frequently,” she said.

A history of misconduct

Last year, AtkinsRéalis reported record revenues totalling about $8 billion, a little less than a third of which came from Canada, according to its annual report. The company says that 60 per cent of its revenue in Canada comes from public bodies. The company continues to win large contracts overseas — last year, it was part of a consortium selected to complete a $750-million refurbishment of a nuclear reactor in Romania.

But the company has faced numerous allegations of corruption over its 113 years of existence. 

In 2013, SNC-Lavalin was debarred for 10 years from contracting with the World Bank after an investigation into a bribery scheme in Bangladesh and misconduct in Cambodia. The company was, however, granted an early reprieve from those sanctions in 2021.

Just this spring, a former executive was sent to prison for bribing officials in Montreal to secure a bridge repair contract for the company in the early 2000s. But charges against the company itself were settled in 2022 through a deferred prosecution agreement — the first time a deal like this had been reached in Canada.

SNC-Lavalin’s recent history also includes fraud convictions for company leaders linked to a bid for a major university hospital, in what one Quebec investigator called "the biggest case of corruption fraud in Canadian history."

And there have been allegations of bribery in India, illegal campaign donations in a Canadian election and even claims of a plot to smuggle Ghadafi’s son out of Libya as civil war broke out.

But cleaning up the company’s act was a key part of the 2019 plea deal. Along with a $280-million fine, there was a three-year probation order requiring SNC-Lavalin to strengthen its compliance program, along with other internal practices.

“From all my understanding from what I've seen, SNC-Lavalin has made very significant strides,” Jull said, stressing that he does not represent the company. “They spent a lot of money, and they fundamentally revised their compliance program in a pretty serious way.”

But as Quaid pointed out, now that the probation period has ended, the company’s compliance program is no longer subject to regular reviews by an independent monitor appointed by the court.