Export Development Canada has hired outside legal counsel to review some of its dealings with SNC-Lavalin. The review comes after a company insider told CBC News the engineering giant secured billions in loans from the Crown agency over the years, some of which he alleges was intended to pay bribes.
If true, it could mean taxpayers have unwittingly backed illegal payments.
Export Development Canada is a federal agency that provides financing and insurance to Canadian businesses operating abroad.
The insider, who worked on several large projects funded by EDC, claims it was an “open secret” within SNC-Lavalin that “technical fees” listed in budget proposals included cash to be used as bribes to secure international contracts.
Those line items could total millions of dollars. The insider says EDC’s internal due diligence policies should have detected something was going on.
He says “technical fees” were part of a larger “lexicon of bribes” used within SNC-Lavalin.
EDC has denied knowledge of any improper payments, but last Friday said it is taking a closer look at a 2011 deal with SNC-Lavalin involving a $250-million project to refurbish the Matala hydroelectric dam in Angola. EDC provided the Quebec-based company with “political risk insurance” for the project.
“We would never, under any circumstances, knowingly participate in a transaction tainted by bribery or corruption,” David Bhamjee, EDC’s vice-president of corporate communications, wrote in an email.
“This behaviour goes against EDC’s core values and deep-rooted culture of business integrity.”
The SNC-Lavalin insider’s allegations come as a political storm rages over accusations. Prime Minister Justin Trudeau replaced his attorney general for refusing to intervene and spare the company a criminal prosecution on fraud and corruption charges.
CBC News has agreed not to identify the insider because he fears losing his job.
He says EDC support was vital for the success of construction projects in underdeveloped parts of the world known for corruption. The projects included airports, power plants and dams, and the EDC loans to SNC-Lavalin ranged from a few million dollars to upward of $500 million.
The insider alleges that, prior to 2012 — when the head of SNC-Lavalin’s construction division was arrested in Switzerland for bribery in Libya — EDC was funding numerous projects that featured “slush funds.”