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Mr. Ben Aïssa has been formally indicted in Switzerland and two lower-ranking former SNC executives also face corruption charges related to a separate bridge project in Bangladesh. But Wednesday’s arrest of Mr. Duhaime brings SNC’s troubles into its own backyard and concerns taxpayer money in public procurement, not merely the shareholder losses seen in other major cases of corporate malfeasance.

“It’s much harder for the company to point a finger now and say ‘This is a bunch of emerging world countries that haven’t caught up’” to the Western world’s corruption standards, Mr. Moore said. “This is embarrassing.”

The company dismissed Messrs. Duhaime and Ben Aïssa this past winter after an internal probe found they were involved in $56-million worth of untraceable payments to commercial agents for two specific projects. Mr. Ben Aïssa allegedly requested the sums while Mr. Duhaime approved them.

Toronto’s Veritas Investment Research, which conducted an analysis of the SNC probe’s finding, has said the payments are likely bribes.

SNC has never publicly confirmed what the projects were. Montreal’s La Presse newspaper has reported that one of them is the McGill superhospital project and that police are focusing on $22-million in so-called “irregular” payouts authorized by SNC executives in order to win the contract.

Investigators with the police corruption squad in September raided the MUHC’s headquarters in Montreal, as well as those of Infrastructure Quebec, the government agency overseeing the hospital project.