Investigators are probing SNC-Lavalin Group Inc.'s operations in Algeria in a marked expansion of the bribery scandal that has shaken Canada's premier engineering firm.
The investigation focuses on one of the company's agents in Algeria, Farid Bedjaoui, a jet-setting money manager hired to help secure at least $1-billion in contracts with the country's state-run oil company, Sonatrach.
Mr. Bedjaoui, an Algerian consultant who was educated in Montreal and occasionally resides there, is suspected of being a conduit for more than $200-million in suspicious payments, possibly bribes, from multiple multinational corporations in the oil and gas services sector, a joint investigation by The Globe and Mail and Il Sole 24 Ore, Italy's business newspaper, has found.
Sources close to the investigations in Europe and Canada believe that SNC and the Italian oil services firm Saipem SpA relied on Mr. Bedjaoui, the nephew of former Algerian foreign affairs minister Mohammed Bedjaoui, to obtain contracts from Sonatrach.
Mr. Bedjaoui is one of several foreign agents hired by SNC who have fallen under suspicion for allegedly paying bribes.
The blue-chip company, which is Canada's largest engineering firm and is responsible for infrastructure projects from Africa to South America to China, is engulfed in a growing scandal over the lengths to which it went to obtain contracts.
SNC's former chief executive, Pierre Duhaime, has been criminally charged with fraud and using falsified documents in connection with the company's successful bid to build a Montreal hospital.
Its former head of international construction, Riadh Ben Aissa, has been jailed by Swiss prosecutors since April as part of an investigation into an estimated $160-million that flowed from SNC to Saadi Gadhafi, the third-born son of the late Libyan dictator Moammar Gadhafi.
But the investigation by both newspapers has found that the Swiss probe is not confined to Libya, nor is it limited to SNC. Sources close to the operation said that Swiss authorities had been examining alleged payments SNC made to companies controlled by Mr. Bedjaoui and came across similar allegedly suspicious payments to Mr. Bedjaoui's companies from Saipem, a major Italian oil services company and a subsidiary of the country's largest oil and gas producer, ENI SpA. Two weeks ago, investigators in Italy, Switzerland and France executed co-ordinated searches of homes and banks, including Mr. Bedjaoui's Paris apartment and an office of the Swiss private bank EFG. Several Saipem executives are under investigation, including the construction unit's recently suspended chief operating officer, Pietro Varone, who was so close with Mr. Bedjaoui that the two men launched a wine-making company together outside Naples.
In a statement, SNC acknowledged that Mr. Bedjaoui was "involved" with several companies that it had hired in Algeria. "These contracts were negotiated by former employees of the company and, to the best of our knowledge, were ordinary business arrangements at the time," wrote Leslie Quinton, a spokeswoman for the company.
Ms. Quinton did not respond to questions about when the company first contracted Mr. Bedjaoui and what work he did. Mr. Bedjaoui's website was recently shut down. On it he had described himself as an investment adviser, philanthropist and a consultant who offers "strategic advice" in the oil and gas sector. He has been close with Algeria's former energy minister, Chakib Khelil, who left his post in 2010 in a corruption scandal within Algeria. Italian investigators have detailed in court documents that Mr. Bedjaoui allegedly accompanied the former energy minister to a meeting in Paris with the chief executive of ENI SpA. The executive, Paolo Scaroni, told the Italian media Mr. Bedjaoui was introduced at the meeting as Mr. Khelil's "special secretary."
SNC has a long history in Algeria, but its involvement intensified over the past decade when its international construction division, headed by former executive vice-president Sami Bébawi, targeted business in North Africa and the Middle East. From 2000 to 2009, SNC entered into joint ventures with the state-run Sonatrach to build, among other things, natural gas processing plants, gas-fired power plants and even a small village for oil workers. A review of company announcements shows that it received at least $6-billion in Algerian contracts since it launched its strategic North African push.
The most recent came in 2009, when Mr. Ben Aissa, Mr. Bébawi's successor as executive vice-president for construction, announced the firm had been given a $1.2-billion contract to design and build, with Sonatrach, a natural gas processing plant in the Sahara desert.
But about a year after SNC's last major Algerian deal was announced, several high-ranking officials from Sonatrach were jailed in a corruption investigation by Algeria's intelligence service. The company's former chief of staff, Reda Hemche, is considered a fugitive.
Central to this scandal, law enforcement sources allege, was Mr. Bedjaoui, an economics graduate from the Université de Montreal and a former student of the Montreal business school Hautes Études Commerciales.
Investigators say they suspect that Mr. Bedjaoui is one of the primary owners of a Dubai-based oil and gas subcontractor, the Ouais Group Engineering and Contracting, or OGEC, although his name does not appear on any publicly available incorporation records obtained by reporters. OGEC got a subcontract for the 2009 SNC-designed Sahara desert gas plant, and has got several contracts from the Italian company, Saipem.
Several of Mr. Bedjaoui's relatives – including two brothers – live, or have lived until recently, in Montreal. Those contacted for this story either declined or did not respond to requests for comment.
Switzerland, Italy and Canada are all signatories to the OECD's anti-bribery convention, and, as such, have all pledged to enforce laws that forbid companies from paying bribes to foreign governments.