‘It’s sad’ no one asked questions while SNC profits soared: Ex-Caisse execApril Fong | BNN Bloomberg
The long series of scandals ensnaring SNC-Lavalin Group Inc. has one former executive of the Caisse de dépôt et placement du Québec calling for more accountability when it comes to corporate bribes for global contracts.
Michel Nadeau, a former deputy chief executive of Caisse – the largest shareholder in SNC – told BNN Bloomberg on Wednesday that when he left his role in 2003, the Quebec pension fund was not aware of any corruption or fraud activity related to SNC’s construction projects in Libya at the time.
Nadeau noted that under former SNC chief executive Pierre Duhaime, who pleaded guilty Feb. 1 for his role in a bribery scandal around the construction of a Montreal hospital, the company’s average profit rose substantially.
“When you double your profits, shareholders, directors – they will never ask, ‘Why are you doubling the profits? What is the secret?’” said Nadeau, now executive manager with the Institute for Governance of Private and Public Organizations in Montreal.
“It’s because you have contracts which are much more profitable than your usual activity. Nobody is raising questions on how you’re making much more profits. And it’s sad, but we should be aware.”
SNC’s average profit from 2006 to 2008, three years prior to Duhaime becoming president and CEO in 2009, was $208 million. Between 2009 to 2011, with Duhaime at the helm, the company’s average annual profit nearly doubled to $404.95 million.
In February 2015, SNC and two of its subsidiaries were charged with paying nearly $48 million to public officials in Libya between 2001 and 2011 to influence government decisions. The RCMP has also charged the company, its construction division and a subsidiary with one charge each of fraud and corruption for allegedly defrauding various Libyan organizations of roughly $130 million. If found guilty, SNC could be barred from bidding on federal contracts for a decade.
Nadeau added that SNC’s past practices followed many other large engineering firms that pay bribes, which has led some Canadian companies like WSP Global Inc. to focus its business in developed countries.
“Unfortunately, it is a reality,” he said. “I think if you look at large French, German, American corporations, you have to do this if you want to have access to contracts.”
“So that’s why if you want to go into emerging countries, unfortunately in some of them – not all of them – you have to give bribes.”
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