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A Bombardier Global 6000 business jet is pictured.JOHANNES EISELE/AFP/Getty Images

This column was originally published in March 2018

Richard Poplak is a Canadian journalist and author based in Johannesburg.

Two possibilities present themselves. The first is that Bombardier, Canada’s flagship transportation and aerospace manufacturer, has created a life-sized, working replica of Wonder Woman’s invisible jet — a supersonic marvel capable of swooshing through the skies undetected. The second is that Export Development Canada, the Crown corporation tasked with providing financial support to local companies abroad, blundered badly when it lent $41-million of taxpayer-guaranteed money to a family of South African-based gangsters, with which said gangsters subsequently purchased a Bombardier luxury jet — a product literally designed to fly very fast in the sky — while somehow expecting the gangsters to act like stand-up guys, and thus not to renege on their monthly payments, disable the jet’s tracking device, and Wonder Woman their way around the planet on Canada’s dime.

Let’s come back down to Earth for a moment. Export Development Canada (EDC) is a multibillion-dollar government agency that, much like the jet in question, has flown entirely under the radar. Over the past few months it has made international news for a forehead-slapping gaffe. In December, 2014, according to a massive cache of e-mails and documents initially leaked to South Africa’s Daily Maverick and amaBhungane news outlets, a company called Westdawn Investments, owned by the infamous South African/Indian Gupta brothers, concluded a deal to purchase a spanking new Bombardier Global 6000 luxury jet, replete with bespoke livery and a wood-paneled interior.

Bombardier was not shy in their solicitations and the e-mails make for some nauseous reading. (Random example: “Once again,” wrote Hani Haddadin, the company’s Sales Director for Africa, “I would like to take this opportunity to thank you for you business and our relationship, it is one I am dearly proud off. Welcome to the Bombardier family!” [sic]) There was good reason for used-car salesman shtick, to say nothing of a subsequent discount of about $10-million on the purchase price: the private aircraft industry is viciously competitive, and Bombardier is under pressure to move its product in a crowded marketplace.

But, as The Globe and Mail revealed this week, there are other reasons for welcoming the Guptas into “the Bombardier family.” The brothers are closely associated with former South African president Jacob Zuma, and were deeply embedded in a systemic decade-long looting effort, allegedly siphoning off hundreds of millions of dollars from state-owned companies. None of this was a secret and a slew of court cases and commissions are currently under way, all with the intent of properly interrogating the family’s involvement in what South Africans have termed “state capture” — the degradation of state institutions in order to strip them bare. Bombardier, which has faced bribery allegations in South Korea and Sweden (to name only two examples), was hoping to secure a piece of a US$1.2-billion locomotive contract, of which the Gupta brothers served as gatekeepers. The Globe investigation revealed negotiations with the Guptas that raise questions about whether the jet may have served as sweetener for the locomotive deal, which Bombardier denies.

But there was a problem: The Guptas were so politically toxic, and their business history so checkered—the legal term is “politically exposed persons” — that no financial institution would lend them the US$41-million they required to conclude the jet contract. (The leaked e-mails reveal that negotiations with lenders Guggenheim in New York and Alpha Capital in India collapsed, for reasons that are unclear.) When Bombardier cast about for a financial partner in order to close the sale, they approached the one lender on the planet that would hold its nose and hand over tens of millions of dollars to a family that was world-famous for its corrupt political connections.

Enter Export Development Canada.

EDC, which inhabits a 17-storey building in the centre of downtown Ottawa, is the centre of Ottawa. It’s a multi-billion-dollar financial services monolith, the second- or third-largest export development bank in the world, an entirely opaque megalith of money that has no master. The agency takes pains to point out that it is not taxpayer funded, that it pays hundreds of millions in dividends to the government every year, and that it contributes about 5 per cent to Canada’s annual gross domestic product. It is ostensibly overseen by the Minister of International Trade, François-Philippe Champagne, but it’s never been clear whether the ministry — or anyone in government, frankly — understands EDC’s remit. Oversight is not just scant, it’s non-existent, and there’s good reason for this: While EDC has been subject to the Access to Information Act since 2007, there exists an exemption in the Export Development Act — the piece of legislation under which the agency is mandated — that treats as confidential any information pertaining to a client, along with any documentation that may have been filed during or after the due diligence process.

As a result, EDC’s disclosure protocols are laughable. Their year-end financials do not provide the exact amount of the loans it extends, nor does it disclose its lending rates or the precise terms of its financial transactions. Critics have long maintained that the price of cheap, abundant, taxpayer-guaranteed credit should be full disclosure, but both EDC and Global Affairs, who stickhandles the agency file for the International Trade Ministry, are comically obtuse in their dealings with the press.

This is unfortunate, because on paper the agency’s mandate is entirely anodyne: Its job is to help Canadian manufacturers and service providers compete in a competitive global marketplace. Let’s say a Canadian company makes funky moose-themed throw cushions, which it hopes to sell abroad. EDC’s job is to open a chequebook. And while most of the agency’s clients are relatively benign, over the course of its 83-year history the vast majority of its loans and financial instruments have benefited the extractive sector — the oil, gas and mining sectors that have traditionally powered the modern Canadian economy.

Until recently, scrutiny of EDC has been largely inadvertent: When civil society activists and journalists were investigating extractive-sector malfeasance, they’d very often find that the agency had underwritten at least a portion of the operations. In 2014 alone, EDC provided a staggering $28-billion-worth of financial instruments for the extractive sector. The past behaviour of its clients does not seem to influence decision making — no company, it seems, has done anything too awful to excite the conscience of EDC’s due diligence or risk analysis departments. And while Canada’s mining giants can be bad enough, EDC has underwritten vast loans to companies such as Brazil’s Petrobras, which was recently embroiled in what has been described as the largest corruption scandal of all time.

For the first time in eight decades of free rein, EDC is facing sustained interest from the Canadian press. But the corporation became the Kevin Spacey of financial institutions last week, following a piece on the Gupta jet debacle that was published in the Washington Post. The national embarrassment has nudged slumbering opposition politicians into action. On March 8, three NDP MPs sent a letter to Mr. Champagne calling for an overhaul of the agency. Unfortunately, their entreaty refers to the EDC-issued loans as “taxpayer-funded” rather than “implicitly taxpayer-guaranteed,” an important distinction that begs the following question: If members of Parliament don’t understand what EDC does and how it functions, how will the agency ever face a significant and meaningful overhaul?

Meanwhile, the invisible Gupta plane keeps ratcheting up the humiliation. On Friday, in South Gauteng High Court in Johannesburg, the agency faced off with a Gupta legal team in an attempt to have the court issue a grounding order for the aircraft. EDC’s counsel, Advocate Alfred Cockrell, wanted the matter heard urgently because, you know, his client wants the plane back. “The aircraft involves a very substantial amount of money,” Mr. Cockrell said. “The risk to my client is very substantial.”

But why the big fuss, asked the Guptas’ counsel, Advocate Owen Cook, as the proceedings took a turn for the absurdist. He insisted that EDC were perfectly aware of the Guptas’ reputation when they lent the money. Using a lengthy Walrus exposé written by this journalist as evidence, he asked what had changed materially since the loan was issued. The Gupta defence went something like this: You knew we were crooked when you gave us the cash, so we’ll just keep the plane for the meantime, thanks.

There is a way out of this mess. This year, EDC’s mandate is up for parliamentary review. The Liberal government is presented with an opportunity to make a real difference when it comes to corporate governance in Canada, which is already far too lax compared with that of our peers.

When parliamentarians do the math, they’ll find that Export Development Canada is the vast Death Star in the middle of the Canadian economy, lending money to companies that have behaved poorly abroad. It is destructive to both Canada’s reputation, and its vaunted values. However inadvertently, EDC has become a vehicle for shunting millions, maybe billions, of clean Canadian cash into the very depths of the global dark economy. It’s time to clip its invisible wings.

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