SNC-Lavalin exec admits payments to politicians

15 March 2013

Yves Cadotte, SNC-Lavalin’s general vice-president, speaking at the Charbonneau inquiry

An SNC Lavalin executive has admitted to an inquiry into corruption in the construction industry in the Canadian province of Québec that the contractor donated more than CA$ 1 million (US$ 980,000) to Quebec political parties.

Yves Cadotte, SNC-Lavalin general vice-president of transport, infrastructure and buildings, told the Charbonneau inquiry that managers approved the payments after local political parties requested money on an annual basis.

The payments were made to the the Parti Québécois and Liberal party between 1998 and 2010, the inquiry heard.

It is illegal for corporations to donate to political parties in Quebec, but Mr Cadotte told the inquiry that the law had not always been as explicit as it is now.

Mr Cadotte said the contractor decided to make the payments to ensure it could continue doing business in the province.

“Not contributing could be an intangible risk. Maybe it doesn’t exist. Maybe it does. But in our mind, it’s a risk we didn’t necessary want to take,” he told the inquiry.

But he added that there was no direct link between the political donations and the contracts awarded to SNC Lavalin.

For its part, SNC Lavalin said Mr Cadotte’s testimony did not constitute an admission of guilt.

The Charbonneau inquiry was set up last year in response to concerns about public procurement in Québec's construction industry.

Investigations

The news comes as SNC Lavalin is battling a string of corruption allegations and lawsuits.

Canadian and Swiss authorities are currently investigating the company over a string of suspect payments which were signed off by its former CEO Pierre Duhaime, who is due to stand trial this year on fraud allegations.

Meanwhile, the Royal Canadian Mounted Police (RCMP) and the World Bank are also investigating the company’s involvement in projects in Bangladesh and Africa.

In addition to the various corruption investigations it currently faces, SNC Lavalin is also the subject of several class action lawsuits seeking damages based on the decline in market value of its stock.