SNC-Lavalin faces U.S. backlash over Libyan ties

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When Illinois county executive Lawrence Walsh learned about SNC Lavalin Group Inc.'s ties to the family of dictator Col. Moammar Gadhafi, he got angry. Then he decided he would do something about it.

Now, the white-haired politician is waging a campaign to stop Montreal-based SNC from building a $300-million (U.S.) airport in his community south of Chicago.

"I just thought, holy smokes – to be doing all that with a country that has been an enemy of the United States of America?" said Mr. Walsh, who is the elected county executive of Will County, which includes about 37 municipalities.

The move is the first signal that the recent allegations surrounding SNC could start to affect its operations. The engineering company has been reeling lately over allegations about its links to Col. Gadhafi's son Saadi, and an alleged plot to spirit Saadi to Mexico at the height of the Libyan rebellion last year.

SNC has denied any connection to the Mexican plot, but the company recently said it dismissed two executives who had been associated with Saadi Gadhafi. One of the dismissed executives, Riadh Ben Aissa, oversaw SNC's operations in Libya and developed close ties with Saadi that helped the company win more than $1-billion in contracts. Mr. Ben Aissa has insisted he resigned from SNC and is planning to sue the company for libel.

SNC has been involved in the Chicago-area airport proposal for several years. The project has been spearheaded by U.S. Congressman Jesse Jackson Jr., whose district has been redrawn and will include much of the county in the next election. It also has the backing of the state government, which is convinced a third Chicago-area airport is needed. Several communities near O'Hare International Airport also support the idea instead of expanding that airport.

Mr. Jackson has formed a group made up of 21 communities, called the Abraham Lincoln National Airport Commission, which is working with SNC and New York-based developer LCOR Inc. on a plan to build an airport with one runway and five gates initially. The airport would be located on a 4,000-acre site that's being purchased by the state near a town called Peotone.

Many county officials are bitterly opposed to Mr. Jackson's plan, arguing that they had no say in the selection of SNC. Mr. Walsh and others are demanding more local control over the project; they have seized on the allegations against SNC to strengthen their case.

"There should be no further involvement in this process as it stands in relation to that company," said Cory Singer, a county board member. Mr. Singer said he was outraged by the allegations raised in The Globe and Mail and other media outlets about SNC's close ties to Saadi Gadhafi and the Mexican plot. The allegations show "that this company has ties to the terrorist wing of the Libyan government," Mr. Singer said. "This is absolutely not what we need in our community."

Mr. Walsh said he wants the tendering process reopened to allow other companies to bid on the project. The Libyan allegations "were just the icing on the cake," he said, referring to his doubts about SNC.

SNC would not comment on the airport project Tuesday. A spokeswoman said: "SNC-Lavalin has done business in Libya for almost 40 years, along with companies from the U.S., England, France and others, and are proud of our long history of building infrastructure around the world. We have a strong code of ethics to which all employees must abide. The allegation that the company authorized any illegal activity in Libya regarding the Gadhafi family is untrue."

Mr. Jackson was not available for comment. But his office issued a statement Friday backing SNC's role in the airport project and noting that the company was not under any investigation.