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The offices of SNC Lavalin are seen in Montreal on Monday, March 26, 2012. The federal elections commissioner says SNC-Lavalin has entered into a compliance agreement for making nearly $118,000 in contributions that violated the Canada Elections Act over a seven-year period.The Canadian Press

The federal Liberal and Conservative parties were forced to reimburse the government after the commissioner of elections found they had received $117,803 in illegal donations from SNC-Lavalin's political slush fund.

The unlawful contributions span from March, 2004, to May, 2011, and showcase how dirty money that funded Quebec political parties also found a home in the federal arena.

The Liberal Party received the bulk of the illegal donations from the Quebec engineering giant, amounting to $109,615, while the Conservatives got $8,187. As part of its reimbursement, the Liberal Party covered $12,529 in donations that SNC-Lavalin gave in 2006 to the leadership campaigns of Michael Ignatieff, Bob Rae, Stéphane Dion and Gerard Kennedy.

Montreal-based SNC-Lavalin has been mired in corruption and bribery scandals over the past decade involving attempts to curry favour with politicians and other influential players to win lucrative engineering and construction contracts in Canada and abroad. The RCMP has raided SNC-Lavalin's offices a number of times over the years.

The Commissioner of Canada Elections, Yves Côté, announced Thursday morning that the company had signed a compliance agreement with the federal agency and committed to put in place a series of steps to ensure it does not make illegal donations in the future.

SNC-Lavalin has already admitted it made more than $1-million in illegal donations to Quebec political parties during the 2000s. Like other engineering firms in the province, managers and family members made personal donations to parties, which were then reimbursed with salary bonuses.

A commission of inquiry found that officials inside the Quebec Liberal Party and the Parti Québécois were aware of SNC-Lavalin's political slush fund, although there is no evidence the federal political parties knew the donations were illegal.

The Liberal Party said it was informed of the illegal donations by the Commissioner of Canada Elections last month, and immediately reimbursed the Chief Electoral Officer.

"The Liberal Party of Canada fully complies with the Canada Elections Act and all Elections Canada regulations for fundraising, and expects all people donating to our party to do so lawfully and to follow the same rules," Liberal spokesman Braeden Caley said.

Conservative spokesman Cory Hann said his party also reimbursed all donations that were flagged. "We expect people donating to the Conservative Party are doing so truthfully and by the letter of the law," he said.

An elections commissioner investigation found that senior SNC-Lavalin executives illegally donated $83,534 to the Liberal Party of Canada; $13,552 to various Liberal riding associations; $12,529 to contestants involved in the 2006 Liberal leadership race; $3,137 to the Conservative Party; and $5,050 to Conservative riding associations.

In the compliance agreement, SNC-Lavalin "acknowledges that, in offering to reimburse its employees for federal political contributions, and in reimbursing such contributions, it was in fact making those contributions itself."

All of the executives involved in the illegal scheme are no longer working for the firm. A compliance agreement usually means that a company will not face charges under the Canada Elections Act.

Michelle Laliberté, a spokeswoman for the elections commission, said the investigation continues and that SNC-Lavalin is co-operating. Charges have not been ruled out against former company officials or anyone else involved in the illegal donations.

"The outcome remains to be seen. The investigation hasn't been completed. It doesn't preclude [charges] later down the road if that is what is required," Ms. Laliberté said.

Corporations are not allowed to make political donations at the federal level and it is illegal for them to channel cash contributions through employees.

SNC-Lavalin said it has taken steps to "prevent unlawful political financing practices," including the creation of a Head of Compliance and Ethics, updated its Code of Ethics and Business Conduct and implemented a policy that states the company must not directly or indirectly compensate employee political donations.

"I am pleased that this agreement was reached. It once again shows our desire and commitment to resolve past issues," SNC-Lavalin president and CEO Neil Bruce said. "Our co-operation with the commissioner reflects the efforts and progress we have made in terms of ethics and compliance since 2012, which our clients and partners now recognize."

SNC-Lavalin, or former officials of the company, have in the past been accused of bribery in Algeria, Bangladesh and Libya, as well as in connection with major projects in Canada.

In March, 2012, then-CEO Pierre Duhaime, who oversaw the illegal donations and was involved in other scandals, abruptly resigned after an independent review found he had signed off on $56-million in payments to undisclosed agents to win contracts.

Later that year, Mr. Duhaime and former SNC-Lavalin vice-president Riadh Ben Aissa were charged with fraud for $22.5-million in alleged bribes paid to win SNC-Lavalin the contract to build Montreal's super hospital. Mr. Ben Aissa served 2 1/2 years in jail in Switzerland for involvement in corruption and money laundering tied to SNC-Lavalin projects in Libya.

Earlier this year, the RCMP laid charges of fraud and breach of trust against Michel Fournier, who was the president of the Federal Bridge Corp. from 1998 to 2006. The RCMP alleged Mr. Fournier received payments of more than $2-million in relation to a $120-million contract that the federal agency awarded to a consortium that included SNC-Lavalin in 2000.

No current or former employees of SNC-Lavalin were charged at the same time as Mr. Fournier, but the RCMP said its investigation was "ongoing."

Facing the threat of getting barred from future federal contracts, SNC-Lavalin signed an "administrative agreement" last year with the Public Services and Procurement Department under the government's new integrity regime. The agreement allows companies that have federal charges pending against them to continue to contract with or supply the government. As part of the deal, SNC agreed to strict conditions and third-party oversight of its business practices.

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