The Real SNC-Lavalin Scandal: Trudeau Government gives Big Corporations a ‘Get-out-of-Jail-Free’ Card
Disclosure: James Seale served in the Canadian Armed Forces for 30 years. He is presently Director of internal controls at Canada Economic Development for Quebec Regions, currently on leave to run as the People’s Party of Canada candidate in Outremont.
Big corporations can now avoid criminal prosecution in Canada – so long as they’re big enough to afford lobbyists.
As of September 19th, 2018 the Criminal Code of Canada was quietly altered to allow for what’s called a ‘Deferred Prosecution Agreement’ (DPA), essentially a special plea deal for the well-connected.
Don’t remember hearing of this? That’s because the Liberals did their best to keep it quiet by burying a clause allowing DPA’s in a last-minute addition to their 582-page Omnibus Budget Bill.
The Liberals were so successful keeping the DPA clause a secret, that even Liberal MP’s on the House of Commons justice committee studying the Omnibus Budget Bill were surprised.
Liberal MP Greg Fergus said at the time he was worried the change appeared to be designed to give those implicated in white-collar crimes “a little slap on the wrist”
“It seems we’re letting those with the means have an easier time of it than those who don’t have the means,” the Liberal MP opined.
The last minute addition of DPA’s into the omnibus budget bill came to be known as the ‘SNC-Lavalin’ clause, because it was added only after intense lobbying efforts from the Montreal-based construction giant.
Why was SNC-Lavalin so eager to amend the Criminal Code of Canada to allow for DPA’s? Because literally billions of dollars depends on it.
SNC-Lavalin is currently under trial for fraud & corruption charges for its role in bribing Libyan officials under the Muammar Gaddafi regime as well as defrauding Libyan organizations to the tune of $130 million.
If criminally convicted in court for corruption, SNC-Lavalin would be barred from bidding on federal contracts for the next 10 years – a potentially massive multi-billion dollar blow to SNC-Lavalin and its shareholders.
So in 2015, after SNC-Lavalin was formally charged with fraud & corruption, then SNC-Lavalin chief executive Robert Card suggested the company wanted to “arrange a deferred prosecution agreement with Ottawa to avoid prosecution and developments that might jeopardize the company’s work.”
At the time, deferred prosecution agreements (DPA’s) didn’t exist in Canada.
So what’s a large, multi-national corporation bent on saving itself billions of dollars to do? Lobby the federal government, of course!
Starting in 2016, SNC-Lavalin lobbied the federal government more than 80 times on the subject of “justice and law enforcement”. This includes high-level meetings with Finance Minister Bill Morneau, the Economic Development Minister Navdeep Bains, Infrastructure Minister Francois-Philippe, as well as multiple meetings with the PMO, including Gerald Butts and various senior advisers to Justin Trudeau.
It didn’t take long for SNC-Lavalin’s lobbying to see results.
In the 2018 Federal Budget, the Trudeau government quietly included an amendment to the Criminal Code allowing for Deferred Prosecution Agreements (DPA’s). By June 21st, 2018, the government passed omnibus Bill C-74 which included this amendment. As of September 19th, 2018 the Criminal Code now allows for the Deferred Prosecution Agreements that SNC-Lavalin was lobbying for.
But that was just the 1st part of the battle for SNC-Lavalin. Not only did they have to lobby to get DPA’s introduced into the Criminal Code, they also have to lobby to get the prosecutors to invite them to negotiate a DPA instead of continuing with the criminal court case.
This decision fell to the Director of Public Prosecution Service in Canada (PPSC), who on Oct 10. 2018 refused to negotiate a DPA with SNC-Lavalin. As a result of this decision, SNC-Lavalin shares dropped 14% that same day, illustrating how crucial avoiding this criminal court case is for the company.
SNC-Lavalin have since filed a judicial review of the decision, which is still pending; however, the new Justice Minister has suggested he may still force prosecutors to negotiate a DPA with SNC-Lavalin, despite protests from the Director of Public Prosecution Service in Canada.
That’s what led to the current scandal taking over the media. Trudeau’s former Justice Minister Jody Wilson-Raybould was apparently being influenced by Trudeau’s PMO to force the Director of PPSC into dropping the criminal prosecution of SNC-Lavalin and instead negotiate the special plea-deal known as a ‘Deferred Prosecution Agreement’.
But the real scandal is the fact that a big corporation like SNC-Lavalin was able to successfully alter the Criminal Code of Canada, and is now trying to successfully lobby itself out of a criminal conviction for corruption. This, despite the fact that the law allowing for DPA’s specifically precludes the use of DPA’s in a corruption case.
There’s a lot going on here, but the lesson being learned is that you can avoid criminal prosecution in Canada, so long as you’re a big enough corporation to successfully lobby senior levels of government.
Clearly this is an affront to our judicial system and the very Rule of Law itself. We can’t have two systems of justice, one for the powerful and wealthy and another for regular, non-lobbying Canadians.
This is one of the many reasons I’ve decided to personally run for Parliament as a member of the People’s Party of Canada.
The People’s Party is the only federal political party that is taking a stand against special interests and their corrupting influence on our government.
Allowing SNC-Lavalin to negotiate a ‘Deferred Prosecution Agreement’ instead of a criminal prosecution is a bail out by any other name.
Essentially, SNC-Lavalin has been arguing they are “Too big too fail” or “Too big to jail”
This is faulty logic. If big corporations that have demonstrated corrupt practices get off with just a ‘slap on the wrist’, then it becomes just another cost of doing business and corruption becomes more widespread.
We have to clean up Ottawa and stop the powerful influence of special interests from deciding what our laws will be.
P.S. Wondering why the Liberals are so keen to help SNC-Lavalin?
For one, SNC-Lavalin is now crucial to their new Infrastructure Bank. With a planned budget of $186.7 billion over the next 12 years, the new bank is giving contracts to SNC-Lavalin to build a number of projects funded by the bank, including the $6.3 billion REM light rail project in Montreal.
SNC-Lavalin is also known to be a big political donor to the Liberal Party of Canada. Only three weeks ago, the former vice-president of SNC-Lavalin was charged with an illegal political donation scheme that funneled more than $117,000 to federal political parties through employees of SNC-Lavalin. $109,000 of the donations went to the Liberals.
But surely there’s no connection.
P.S. Max tweeted this today;
The Crown is is requesting that Sami Bebawi, a former executive at SNC-Lavalin, pay back the money he made through illegal actions.
According to the Montreal Gazette, the total sum Bebawi owes is $28 million which prosecutors want the court to collect by making Bebawi give up $4.2 million in assets and pay the rest of the $24 million fine.
Bebawi was sentenced to 8.5 years in prison after being found guilty of five charges. The 73-year-old was found guilty last month in crimes related to dealings with Libya’s Gadhafi regime.
Over the course of the trial, it was said that during the corruption Bebawi had taken $28 million and moved it to many bank accounts and a family trust.
On Tuesday, prosecutors made it clear at the Montreal courthouse that $4.2 million in assets has been located and they will attempt to have them forfeited. The request has not been contested by the defence.
Included in the assets are bank accounts and property that Bebawi and his family own. There is property in Montreal, St-Lambert and a condo in Florida which the American government sold for US$1.17 million.
The request will most likely be ruled on in March by Superior Court Justice Guy Cournoyer.
Anne-Marie Manoukian, the Crown prosecutor, noted that if the fine is ordered and Bebawi fails to pay it by the deadline, he will possibly receive more prison time.
Bebawi was found guilty of corruption, fraud and laundering after being the executive vice-president at SNC-Lavalin from 2000 to 2006.
Jurors were told that Bebawi was backing a transfer of around $113 million that was distributed to shell companies. The money was then used to give to people who were able to secure deals in Libya.
The guilty verdict is being appealed by Bebawi and he has been freed from detention for the time being.
Part of the appeal argues that wiretap evidence was wrongly allowed by the presiding judge. From the wiretap came recorded conversations from Constantine Kyres—Bebawi’s lawyer at the time. The conversations revealed that Kyres made an offer of $10 million to a different former SNC-Lavalin executive in an attempt to make him change his testimony.
Conditions of Bebawi’s release forbid him from engaging in any communication with twelve other people—many being former SNC-lavalin executives.
The controversial Quebec-based corporation SNC-Lavalin was awarded a $1.6 billion contract for Ottawa’s LRT train line project despite there being a unanimous consensus amongst auditors that the corporation should not be chosen for the project, according to CBC News.
SNC-Lavalin’s proposal reportedly failed to include necessary features, such as a signalling, train control system, and had no plan for snow removal. As well as this, SNC-Lavalin believed that the trains were run through electricity, not diesel.
The report on SNC-Lavalin’s bid also stated their displeasure with the corporation failed to provide a plan for Ottawa’s existing train lines. The other corporations who were in competition with SNC-Lavalin managed address this.
The auditing team stated starkly that SNC-Lavalin’s plan “failed all four technical categories.”
Despite failing to achieve 70 percent that the firm needed to further participate in the competition, the engineering firm still managed to win it. Later on, the City of Ottawa admitted that SNC-Lavalin only achieved 67 percent.
The reason why SNC’s bid managed to progress was due to their financial evaluations. Its bid was cheaper then the other competitors, and was thus placed as the preferred candidate.
Former SNC-Lavaline executive Sami Bebawi, 73, was found guilty of corruption and fraud charges related to the engineering giant’s ties with former Libyan dictator Moammar Gadhafi.
A Quebec Superior Court jury found Bebawi guilty of the five counts against him, including fraud, corruption of foreign officials, and laundering proceeds of crime.
Bebawi served as SNC-Lavalin’s head of international construction division. Crown prosecutors portrayed Bebawi as “a key figure in an elaborate scheme to bribe Libyan officials,” the CBC reports.
Another former high-level SNC-Lavalin executive, Riadh Ben Aissa, told the courtroom that SNC had transferred over $100 million dollars to a shell company in the late 90s until the death of Gadhafi in 2011.
The executive claimed that the money was intended for Gadhafi’s son, Saadi Gadhafi.
Aissa, who had himself served two years in a Swiss jail for bribing Libyan officials, admitted to being a figure in setting up the company as a reward Gadhafi for aiding SNC-Lavalin to secure expensive construction projects, which resulted in SNC winning numerous Libyan contracts which totalled a whopping $1.85 billion.
Gadhafi’s rewards also included a $25 million yacht and coquettish trips to Montreal and other major Canadian cities.
Interactions between Gadhafi and SNC also remain unfinished, as the company allegedly gave $48 million in bribes to Libyan officials between 2001 and 2011, a direct violation of the Corruption of Foreign Public Officials Act.
Sami Bebawi was sentenced to 8-and-a-half years in prison.
SNC also recently had to pay out a $280 million fine for other corruption charges.
Controversial engineering firm SNC-Lavalin will plead guilty to a corruption charge, say federal prosecutors in a Montreal court on Wednesday.
The Montreal-based engineering giant, who has been no stranger to public controversy in the past year, was facing charges on criminal trial in relation to shady business dealings with Libya.
The company will now be ordered to pay a hefty $280-million fine, which the company will have five years to pay off.
Lawyers for SNC-Lavalin are penned to present their sentencing arguments to the Quebec Superior Court later Wednesday, CTV reports.
This comes only hours after the company’s stock, TSX, was halted for trade.
The halt was announced at 8:16 am by the Investment Industry Regulatory Organization of Canada, though no further details were given surrounding the halt at that time.
The charges also come only days after a former SNC-Lavalin executive was found guilty of charges including fraud, laundering proceeds of crime, and corruption of foreign officials.