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Former SNC-Lavalin executives agreed to spend $38-million on the boat to guarantee SNC’s $450-million contract in a water drilling and diversion project in Libya.Supplied

A star witness who orchestrated kickback and bribery schemes for SNC-Lavalin Group Inc. has testified a former company CEO and icon of corporate Quebec approved the purchase of a yacht for the son of Libyan dictator Moammar Gadhafi.

Former SNC-Lavalin vice-president Riadh Ben Aissa testified in court proceedings that were under a publication ban until recently that he, former CEO Jacques Lamarre and former chief financial officer Gilles Laramée agreed to spend $38-million on the boat to guarantee SNC’s $450-million contract in a water drilling and diversion project in Libya.

For most of his time in office, Moammar Gadhafi was an international pariah for human rights abuses, provoking military conflict and backing terrorist attacks, including his admitted responsibility for the 1988 Lockerbie airliner bombing that killed 270 people.

Mr. Ben Aissa said the final decision to buy the boat, for which Al-Saadi Gadhafi had asked, was made at a table in Mr. Lamarre’s Montreal office after Mr. Laramée “ran the numbers” to make sure the purchase made financial sense for the company’s vast Libyan operations. He described the atmosphere in the meeting as “one of amusement at the peculiar request.”

Mr. Lamarre – an officer of the Order of Canada whose family members were Quebec corporate engineering pioneers – is not charged with any crime. He did not return messages on Monday, but he denied Mr. Ben Aissa’s allegations to La Presse, accusing Mr. Ben Aissa and former SNC-Lavalin executive vice-president Sami Bebawi of trying to drag others down with them. “If everyone was a bandit, everyone would have put money in their pockets,” Mr. Lamarre said. “There were only two people who put money in their pockets: Sami Bebawi and Riadh Ben Aissa.”

Mr. Laramée declined to comment to La Presse. He has denied the allegations in separate civil court filings.

Mr. Ben Aissa’s testimony came from the 2017 preliminary hearing of Stéphane Roy, an SNC-Lavalin vice-president acquitted on corruption charges in connection with the company’s dealings in Libya earlier this year due to excessive delay. His acquittal allowed the testimony to be published. The court released recordings of the hearing last Friday in response to media requests.

Mr. Ben Aissa has served prison time for his role in the matter, including repaying millions of dollars in kickbacks, and is now co-operating with authorities. Mr. Bebawi is scheduled to stand trial next fall on charges of fraud and bribery in connection with the company’s dealings in Libya.

Evidence at the preliminary hearing showed SNC-Lavalin paid nearly $2-million in expenses for a trip to Canada by Al-Saadi Gadhafi in 2008, including tens of thousands of dollars for escorts and pornography.

The court heard that a Toronto Hyatt hotel asked the Department of Foreign Affairs (DFAIT) for help getting an unpaid $94,000 bill paid and threatening to sue. (It was not clear who Hyatt intended to sue.)

A Foreign Affairs official called SNC lobbyist Robert Blackburn seeking help getting the bill paid, according to an e-mail read out in court that Mr. Blackburn sent to Mr. Lamarre, Mr. Ben Aissa, and other executives. “DFAIT is concerned that [a lawsuit] would make the situation public with unpredictable results,” Mr. Blackburn wrote. SNC-Lavalin paid the bill.

“He was a very special guest,” Mr. Ben Aissa testified. “It was a country that was vital for the company. Two million in expenses were not going to make a dent in our bottom line.”

SNC-Lavalin is also facing charges of fraud and bribery, and has pressed hard to avoid public trial. The Globe and Mail reported on Feb. 7 that officials in the Prime Minister’s Office and others put pressure on Jody Wilson-Raybould last fall, when she was attorney-general, to order a deferred prosecution agreement for SNC-Lavalin. In the ensuing controversy, Ms. Wilson-Raybould and Jane Philpott resigned from cabinet, and a senior PMO adviser stepped down. The retirement of the Clerk of the Privy Council, Michael Wernick, was announced on Monday.

Mr. Ben Aissa was in charge of finding business in the Arabic-speaking world, and in the 1990s, he got the company a piece of the country’s vast water-drilling and diversion project called the Great Man-Made River.

By 1999, SNC-Lavalin was facing costly penalties for missed deadlines and technical requirements connected to that job. Mr. Ben Aissa testified the company was in deep trouble until a chance encounter on a flight with Slim Chiboub, a businessman and son-in-law of former Tunisian President Zine El Abidine Ben Ali.

Mr. Chiboub set up a meeting between Mr. Ben Aissa and Al-Saadi Gadhafi, who facilitated a $40-million settlement from Libyan authorities, Mr. Ben Aissa testified, adding that about half the money went to SNC, about half went to Mr. Gadhafi through a shell company, and Mr. Ben Aissa pocketed an unspecified sum.

Mr. Ben Aissa testified business took off and it became impossible to say no to Mr. Gadhafi, including the day the dictator’s son summoned him to Cannes to visit a yacht show. “He took me directly to the display of [yacht builder] Palmer Johnson. He knew exactly what he wanted,” Mr. Ben Aissa said. “We were there an hour.”

Mr. Ben Aissa testified that he said he would need higher approval for the purchase. “I was very nervous because I did not want to trigger an imbroglio with Saadi Gadhafi at that moment in our business relationship,” he said. Preliminary approval came quickly and he flew to Montreal to sort out details.

He said the three executives sat at Mr. Lamarre’s “round table” where Mr. Laramée quickly decided the numbers would work, but they should ask for help in return. The yacht would take time to build and they could tie boat installments to having notoriously slow Libyan authorities pay arrears on contracts.

The yacht was built and the bills paid, Mr. Ben Aissa testified.

With reports from Vjosa Isai and Nicolas Van Praet

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