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Crown witness Diederik J. Vandewalle is seen at the Palais de Justice in Montreal on Wednesday, Nov. 20, 2019.Dave Sidaway / jpg

One way to understand Libya under dictator Moammar Gadhafis regime, a former SNC-Lavalin executives fraud trial heard Wednesday, is to think of the country as being like the Mafia: unofficial rules governed the economy and everyone knew who not to cross.

I think its actually a very good description of what Libya was, said Diederik Vandewalle, a Dartmouth College professor and expert on modern Libya, during former executive Sami Bebawis fraud and corruption trial.

There were no real institutional rules, no checks and balances, Vandewalle said, and it was very well understood that if you transgressed what Gadhafi wanted, some dire consequences would follow.

Vandewalle explained how, at the time SNC-Lavalin was expanding its business in the country, Gadhafi and his children decided which economic projects moved forward and intermediaries often extracted bribes from foreign companies seeking contracts.

Bebawi, 73, faces charges of fraud and bribing a foreign public official in Libya. The Crown argues the firm paid a series of bribes and kickbacks to Gadhafis son, Saadi, in order to keep receiving lucrative contracts. It contends Bebawi pocketed $26 million through its dealings in the country.

The trial has heard how former executive Riadh Ben Aissa reached out to Saadi Gadhafi when the company was losing money on a contract. It had filed a claim to recoup its losses but wasnt making any progress.

Ben Aissa told jurors he was pressured by Bebawi to settle the claim at any costs necessary, which he says led him to take a political route. The jury has seen how, after the claim was settled, $25 million Deutsche Mark was transferred to what the Crown argues was a shell company set up by Ben Aissa.

That money was divided between Saadi Gadhafi, Bebawi and Ben Aissa, the Crown says.

Vandewalle, called to testify by the Crown, gave jurors a brief overview of Libyas history on Wednesday.

He described Libya as a kleptocracy where those at the top of the political system skim off money for their own profit and take whatever they need irrespective of whatever the impact is on the country.

He explained how the country was one of the poorest in the world following the Second World War, with a per capita income of $25 per person. But that changed when oil was discovered in 1959, he said, with the per capita income rising to $2,000 per person by the time the Gadhafi regime took over 10 years later.

International and United States sanctions later pushed the countrys economy into dire shape before the sanctions were lifted in the early 2000s.

By then, Vandewalle said, Gadhafis children had become powerhouses in a rebuilding economy.

They were very powerful, Vandewalle said. They became these intermediaries and gatekeepers, in a sense. They were the ones that brokered the power. They were able to decide whether or not and under what conditions a particular contract would move forward.

The trial continues Thursday.

jfeith@postmedia.com

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SNC-Lavalin: Libya was 'like the Mafia,' former executive's trial told - Montreal Gazette