Bribery by foreign officials, conspiracy to commit fraud and forgery, money laundering, possessing property obtained by crime, and attempts to secretly smuggle the son of a former dictator into safer countries.Sounds like the plot of a twisted crime novel.Yet these are charges laid against former executives at SNC- Lavalin (SNCL), one of Canada's largest engineering and construction firms.

The Royal Canadian Mounted Police allege that over a decade or longer, SNCL funneled more than $120 million through offshore bank accounts as bribes to secure contracts in Libya.Separately, the World Bank, the African Development Bank, Swiss police, and other entities uncovered evidence that SNCL bribed or attempted to bribe government staff and leaders to win contracts in Africa and Asia.SNCL is also being investigated for unethical activities in contract bidding on a major Canadian project involving a Montreal super-hospital.Almost a dozen former SNCL executives, most of whom held senior positions, either face charges of criminal activity or are under investigation.The company and its 100 subsidiaries have been banned for a decade from bidding on World Bank-funded contracts.

The World Bank and other investigators report that in several contracts SNSL processed bribes through an expense line called 'project consultancy cost' or PCC.For example, SNCL recently settled a corruption case filed by the African Development Bank, which had discovered project consultancy cost items representing 7.5 percent of the total contract value of the two SNCL road projects in Uganda and Mozambique.The engineering firm has acknowledged that non-of these expenses are legitimate."Everybody used this term, and all know what that means," admits SNCL's former director of international projects."Sometimes it was 'project consultancy cost', sometimes 'project commercial cost', but the real fact is the intention is a bribe."

SNCL paid many of the PCC bribes indirectly through employees.One SNCL engineer in Nigeria said he was told to us his personal funds to pay a Nigerian official for 'soil investigation'.The official had selected the engineering firm for a contract.The engineer was subsequently reimbursed by SNCL through a fictitious company.When asked why he participated in the kickback scheme, the engineer (who know works in India for another company) replied: "When the boss asks, in that part of the world... what would you do if you were put in mu shoes if you were in a remote area of Nigeria?"

Another way that SNCL executives apparently bribed officials was through 'agent fees'.Retaining a local agent is common and sometimes required for foreign contracts bids to arrange permits, imports, and other activities.However, investigators uncovered numerous questionable transfers of large funds from SNCL to banks in Switzerland, Bahamas, and other countries.

The largest corruption of the 'agent fee' process involved the $120 million over 10 years to a Swiss bank account controlled by a SNCL executive vice-president working in North Africa and later at headquarters in Montreal. The executive was subsequently convicted and served jail time in Switzerland for corruption and money laundering regarding these funds, $47 million of which he handed over to Swiss authorities as a part of the conviction.During the Swiss trial, the executive admitted that he bribed Saadi Gaddafi (a son of Libya's dictator at the time), for having SNCL win 5 major contracts in Libya.In separate charges, an RCMP affidavit claims that the same executive masterminded a failed attempt to smuggle Saadi Gaddafi and his family into Mexico.A former SNCL contractor in Canada spent 18 months in a Mexican prison in relation to that mission.

SNCL is suing the executive convicted in Switzerland and others for the recovery of the transferred funds, claiming that they were intended for legitimate agent fees.The executive counterclaims that the top brass (below the board level) had arranged or knew these funds were being used for bribery payments and the executive was following orders.Separate actions by SNCL's CEO at the time lent support to the jailed executive's claims.Specifically, despite opposition from the chief financial officer and head of international operations, the CEO authorized undocumented totalling $56 million to unknown 'agents' in Libya and Bahamas.Quebec's anti-corruption police say the CEO's largest undocumented payment ($22.5 million sent to the Bahamas) was a bribe to win a major Montreal super-hospital contract.The CEO resigned when an internal review informed SNCL's board of the CEO's actions.The board granted the CEO a severance payout, but the severance payments were later stopped when Quebec's anti-corruption police charged the former CEO with fraud.

Another SNCL vice president now facing several charges also admits to engaging in bribery and related crimes.He explained the SNCL had "a corporate culture where it is common practice to do all that was necessary; including the payment of 'commissions' and other benefits to obtain contracts, including in Libya."The second executive also argued that he was under pressure to engage in these illegal activities because the executive above him said "that he had to follow their instructions to satisfy their expectations."In fact, a few former SNCL executives have tried to sue the company for wrongful dismissal claiming their illegal activities were required by the company to keep their jobs.

SNCL's board of directors seems to have downplayed personal responsibility for these events.Very early in the RCMP investigation, SNCL's board received an anonymous letter describing the bribery activities, yet the board later admitted that it only 'took note' of the allegations, pointing out that they have 'received anonymous letters before that had no creditability'.And when the extent of the wrong doing at SNCL eventually became public, the board chair said: "Clearly, our board of directors cannot govern something that they don't know about or prevent something that they are not aware of."

Assuming the problem in this case is that SNCL has severely ruined its reputation and in turn its long-term viability, use 4 organizational behavioural theories to explain WHY these problems occurred?