The settlement announced Wednesday, in which SNC-Lavalin appears to have dodged the existential threat of being banned from bidding on federal contracts for 10 years, is going to trouble many Canadians.
How else are they to react to the fact that, after successfully lobbying the Trudeau government to create the option of a deferred prosecution agreement (DPA) for companies facing corruption charges, and then learning that option wasn’t available in connection with a vast bribery scandal in Libya involving its construction division, SNC-Lavalin is essentially getting what it wanted in the first place?
By having SNC-Lavalin Construction Inc. plead guilty to the commonplace charge of fraud more than $5,000, parent company SNC-Lavalin Group seems to have skirted the risk of being debarred from bidding on federal contracts under the Government of Canada’s Integrity Regime.
The regime was created in 2015 to punish suppliers that violate parts of the Criminal Code, the Corruption of Foreign Officials Act or a number of other federal laws when trying to land government contracts in Canada and around the world.
One of the laws whose violation can lead to debarment is fraud “committed against Her Majesty” – a Canadian government, in other words.
But on Wednesday, SNC-Lavalin Construction Inc. pleaded guilty to a single charge of fraud against the “Great Socialist People’s Libyan Arab Jamahiriya,” a.k.a. the former dictatorial government of Libya, and several of its ministries. Her Majesty escaped unharmed.
From that, it would appear that SNC-Lavalin will continue to be able to bid on federal contracts, and it won’t have to lay off 9,000 people in Canada as it once claimed.
SNC-Lavalin’s sole consequential punishment will be the $280-million fine it negotiated with federal prosecutors – an amount that could have been as high as $705-million, according to the court settlement, but which was reduced because SNC-Lavalin Construction Inc. copped a plea.
SNC-Lavalin also got credit for efforts to clean house, remake its executive suite and bring in measures to combat corruption – efforts that most parties agree are sincere and have been effective.
The question for Canadians is, did SNC-Lavalin get a sweetheart deal from federal prosecutors, or does the settlement serve the public interest? Thanks to Prime Minister Justin Trudeau, the issue is muddied.
The federal ethics commissioner found in August that Mr. Trudeau tried to influence the federal prosecution of SNC-Lavalin. The Prime Minister’s officials repeatedly put pressure on former attorney-general Jody Wilson-Raybould to overrule the Public Prosecution Service of Canada and give the company its much-desired DPA – a campaign the ethics commissioner said was “contrary to the constitutional principles of prosecutorial independence and the rule of law.”
Wednesday’s settlement is just more proof of how off-base Mr. Trudeau was. While it’s fair to argue that SNC-Lavalin got off lightly, the bottom line is that the justice system appears to have done its job, independently. The push for a politically engineered solution was as unnecessary as it was wrong.
SNC-Lavalin will effectively forfeit the profits it made in Libya, estimated to be about $150-million, and will pay what amounts to an additional fine of $130-million.
As well, it is on court-monitored probation for three years. And two former employees who funnelled almost $48-million to the Caligulan son of the late dictator Moammar Gadhafi to secure construction contracts have been prosecuted and found guilty on multiple charges.
Meanwhile, the shareholders and employees of a major Canadian company, who did nothing wrong, have been spared any more fallout.
That’s why DPAs – which involve steep fines and probation periods – are available in countries around the world, including the United States and much of Europe. Companies whose employees are caught bribing officials or rigging bids must be held accountable, but not to the point that the public interest is harmed.
The lesson of the SNC-Lavalin saga is that prime ministers and their henchmen need to respect the rule of law and leave it to prosecutors to find balanced resolutions to corruption cases. When politicians stick their noses where they don’t belong, they are the ones undermining the public interest, by casting doubt on the justice system. It’s a system that works.