SNC’s ‘business model’ in Libya involved kickbacks and bribes: Crown

Facing charges of fraud, bribery of a foreign public official and possession of property obtained by crime, Sami Bebawi pleaded not guilty to the charges Thursday morning

A former top executive at SNC-Lavalin says he was told to do whatever it takes — and pay whoever was necessary — to ensure the firm stopped losing money on a construction project in Libya in the early 2000s.

That demand, the Crown argued on Thursday, is what led to what it says became the firm’s “business model” in Libya: paying millions in kickbacks and bribes, including to dictator Moammar Gadhafi’s son, to keep steering lucrative contracts toward the firm.

Prosecutors said the gifts culminated with the firm buying Saadi Gaddafi a $25-million, 150-foot yacht.

The details emerged during the first day of former SNC-Lavalin executive vice-president Sami Bebawi’s fraud trial at the Montreal courthouse.

Bebawi, 73, faces charges of fraud, bribing a foreign public official and possession of property obtained by crime, including three bank accounts, a condo in Florida and two amounts of roughly $15 million and $12 million. The trial is scheduled to last six weeks.

The first witness called by the Crown, former SNC-Lavalin executive Riadh Ben Aissa, said he first met with Bebawi shortly after he was nominated to his role as executive vice-president.

The meeting concerned losses the engineering firm was incurring through a project and a multimillion-dollar claim it had filed against its client to regain its money.

The client, the Great Man-Made River Authority, was a state institution tasked by Moammar Gadhafi to build infrastructure that could bring water from the desert to coastal cities in the region.

For different reasons, it had turned out to be much more costly than the SNC-Lavalin division in charge of it had first anticipated and the firm was now losing money on it. It filed a claim against the authority to try to recover the additional costs, but the negotiations weren’t going anywhere.

Ben Aissa, who had been leading the project for SNC-Lavalin, said he had exhausted all avenues by the time Bebawi came into the picture. The two met at a top-floor business lounge in a Cairo hotel. Ben Aissa said the message from his new boss that morning was clear: settle the claim and retrieve the firm’s money, by any means necessary, or his job was on the line.

“There was no limit to what I could do,” Ben Aissa said, “as long as I recuperated the money.”

Ben Aissa was arrested in Switzerland in 2012 for his role in the firm’s Libyan dealings. While detained, he signed an agreement to collaborate with Canadian authorities.

Through hours of testimony Thursday, he detailed the pressure he says Bebawi put on him to make sure the firm settled the claim and emphasized that any dealings he had with Saadi Gadhafi were always approved by Bebawi.

He detailed taking a private plane from Tunisia to Tripoli, Libya, where he was first introduced to Saadi Gadhafi at his offices in military barracks. He brought copies of the firm’s contract and claim with him.

Their first official meeting came later over breakfast in Rome. Their relationship from then on, Ben Aissa said, developed from a business relationship to a more personal one.

“You develop affinities and a certain trust,” he said, “but above all, it was a professional relationship.”

The Crown argues Ben Aissa managed to get the firm’s claim paid with the “collaboration, support and interventions” of Saadi Gadhafi and that all involved received payments for getting it done. Gadhafi received 7.5 million Deutsche marks for his role, it said.

Once the claim was settled, the prosecution added, further contracts started heading toward SNC-Lavalin.

“This is a case where a plan was devised and put in place to pay bribes in order to solve a major claim and later obtain lucrative construction contracts in Libya,” Crown prosecutor Anne-Marie Manoukian told jurors in her opening statement. “In fact, this plan became the business model and led to money transfers from SNC-Lavalin of over $113 million (to a company set up by Ben Aissa).

“Mr. Ben Aissa and Mr. Bebawi profited largely from this scheme and pocketed substantial sums of money,” Manoukian said. “You will see that Mr. Bebawi received over $26 million directly or in accounts he controlled.”

The Crown will call 10 witnesses throughout the trial.

Former SNC-Lavalin executives will detail the firm’s dealings in Libya, a professor who’s an expert in Libyan history and government affairs will speak about the Gadhafi family’s role in awarding public contracts in the country, and a police officer who went undercover for the investigation will detail what he witnessed.

Manoukian said the officer will explain that Bebawi offered Ben Aissa $10 million in exchange for more favourable testimony at trial. Video and audio recordings of conversations between the two, she added, will show the jury “just how far Mr. Bebawi was willing to go.”

In his opening remarks to the jury, Superior Court Justice Guy Cournoyer told the 14 jurors —  two will eventually be removed, serving as alternates —  to ignore anything they’ve heard about corruption allegations concerning the SNC-Lavalin engineering firm.

The public debate surrounding what has been called the “SNC-Lavalin affair,” Cournoyer added, “also isn’t pertinent for your decision.”

Bebawi has pleaded not guilty to all the charges he faces. The trial continues Friday.