Canadian engineering giant at center of Trudeau scandal admits fraud

Montreal (AFP) - A subsidiary of the engineering company at the center of a Canadian political scandal that tarnished Prime Minister Justin Trudeau's first term agreed Wednesday to plead guilty to a single fraud charge linked to its Libya dealings.

In order to avoid a trial, SNC-Lavalin's construction division will pay a Can$280 million (US$210 million) fine in instalments over five years, it said in a statement.

Other charges against the parent firm and its international marketing arm were withdrawn, with the Court of Quebec's approval.

"We feel this settlement is fair, and we deeply regret this past behavior which was contrary to our values and ethical standards," SNC Lavalin chairman Kevin Lynch said in a statement.

SNC-Lavalin and its two subsidiaries were accused of paying Can$48 million in bribes between 2001 and 2011 to secure contracts in Libya during the rule of former strongman Moamer Kadhafi.

It was also charged with defrauding the Libyan government of Can$130 million.

The allegations relate to the world's largest irrigation scheme -- the Great Man-Made River Project -- to provide fresh water to the cities of Tripoli, Benghazi and Sirte.

SNC-Lavalin had openly lobbied the Trudeau administration for an out-of-court settlement, which led to a split between Trudeau and his attorney general, Jody Wilson-Raybould.

She accused the prime minister and his inner circle of meddling in the case.

Wilson-Raybould testified before a House of Commons justice hearing earlier this year that she experienced "consistent and sustained" pressure to interfere in the case, including "veiled threats."

Trudeau rejected her claim, saying he was simply looking out for 9,000 jobs at the Montreal-based firm after the company warned a conviction at trial risked crippling its business.

Months of Liberal party infighting and hearings into the matter eventually lead to Wilson-Raybould and three other senior officials being sacked.

Support for the Liberals, meanwhile, plunged to a low just a few months before a general election that would return Trudeau to office weakened after losing his majority in the House of Commons.

On Sunday, former SNC Lavalin executive Sami Bebawi was found guilty in a separate case of paying off foreign officials, including Kadhafi's son Saadi, to secure contracts for the firm.