EDC investigating claim it backed SNC-Lavalin on corrupt Angola deal [UPDATED]
By CP STAFFEconomy Industry Government Manufacturing agency Angola EDC export government manufacturing SNC-Lavalin trade
Crown agency said it would have never knowingly taken part in any deal involving bribery or corruption.
OTTAWA — Export Development Canada is reviewing its decision to provide up to half a billion dollars worth of insurance in 2011 for an SNC-Lavalin contract in Angola after learning of an allegation the company may have won the bid with help from bribes.
The Crown corporation, which acts as a credit agency for Canadian firms looking to do business abroad, says it could widen its investigation to scrutinize other deals it struck over the years with the construction and engineering firm—likely worth several billion dollars combined.
A report by CBC News, based on allegations from an unnamed SNC-Lavalin insider, said it was well known within the company that “technical fees” in its proposals included cash earmarked for local consultants or agents to help the firm secure international contracts.
The source told the CBC that issues related to technical fees—which could amount to millions of dollars for a given project—should have been detected by EDC as it evaluated SNC-Lavalin’s applications.
The story comes with the beleaguered company at the heart of a political controversy that has engulfed the federal Liberal government for nearly two months. It has cost Prime Minister Justin Trudeau two senior cabinet ministers, his most trusted adviser and the country’s top public servant.
Former attorney general Jody Wilson-Raybould maintains she was improperly pressured by the Prime Minister’s Office last fall to override the director of public prosecutions, who had decided to proceed with a criminal prosecution of SNC-Lavalin on bribery charges related to contracts in Libya.
On Wednesday, SNC-Lavalin spokeswoman Daniela Pizzuto declined to comment on the CBC report, except to say in an email that the allegation in the story “dates back to prior to 2012.”
The company has argued elsewhere that despite past bad behaviour by some executives, it has cleaned house.
EDC has hired an outside lawyer to examine SNC-Lavalin’s contract to work on the Matala Dam in Angola. The agency provided the company with between $250 million and $500 million worth of “political risk insurance” for the deal.
A spokeswoman for the Crown agency said EDC would have never knowingly taken part in any transaction involving bribery or corruption.
“We made the decision to review the Angola matter immediately upon hearing about a new and serious allegation,” Jessica Draker wrote in an emailed statement.
“Specifically, the allegation was that EDC turned a blind eye to improper or illegal payments regarding the Angola project.”
The agency said it might expand the scope to examine other deals with SNC-Lavalin. Since 2002, EDC has provided as much as $4 billion in financing, including guarantees and insurance, to SNC-Lavalin for projects outside North America.
Draker said that, generally speaking, technical fees and agent fees are common, legitimate operational expenses.
“Those who want to conceal payments take great pains to do so, making these payments extremely difficult to uncover through due diligence processes undertaken by a financial institution,” she wrote.