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One source told The Globe that Ottawa had been pushing the Trump administration to seek an agreement with Meng Wanzhou, seen here in Vancouver on Nov. 23, 2020, as a way to free Michael Spavor and Michael Kovrig.JENNIFER GAUTHIER/Reuters

The U.S. Justice Department is reportedly in discussions on a plea agreement with lawyers for Meng Wanzhou that would allow her to return to China, and which could open the door for the release of two imprisoned Canadians.

Ms. Meng, chief financial officer for Huawei Technologies, is out on bail in Vancouver and fighting a request from the United States to extradite her to New York to face a multitude of charges including bank fraud and violations of U.S. sanctions against Iran.

One source told The Globe and Mail that the Canadian government had been pushing the Trump administration to seek an agreement with Ms. Meng as a way to free Canadians Michael Spavor and Michael Kovrig, who have been incarcerated in China for 725 days.

The office of Foreign Affairs Minister François-Philippe Champagne declined to comment on the matter before the courts and sources close to Ms. Meng accused the U.S. government of leaking the legal talks. The Globe is not identifying the sources because they were not authorized to discuss the Meng case and attempts to win the release of the two Michaels.

The Wall Street Journal and Reuters reported late Thursday that negotiations between Ms. Meng’s lawyers and the Justice Department have been taking place and involve a possible deferred prosecution agreement.

Under the deal, the U.S. would drop the extradition case in Canada and allow Ms. Meng to return home if she admitted to some of the allegations against her, the Wall Street Journal reported.

On Friday morning, the U.S. Department of Justice refused to comment on the media reports.

A source close to Ms. Meng told The Globe that she doesn’t believe she did anything wrong. “At the moment, the U.S. government wants an admission of liability. There is none we can admit.”

A spokesperson for Huawei in Shenzhen, China said on Friday morning that the company had no comment. Alykhan Velshi, vice-president of corporate affairs for Huawei Technologies Canada, also declined to comment on reports of negotiations.

Prime Minister Justin Trudeau also declined to comment, focusing instead on the release of Mr. Spavor and Mr. Kovrig.

“We’re going to continue to work as hard as we possibly can to bring these two Michaels home,” Mr. Trudeau said on Friday during a news conference outside Rideau Cottage. “It’s been extremely difficult for them, for their families and their loved ones. We will continue to stand up for Canadians in difficulty anywhere around the world.”

Canada’s arrest of Ms. Meng in December, 2018 at Vancouver International Airport caused a deep rupture with China, with Beijing accusing Ottawa of taking part in a “political conspiracy” with the U.S. to undermine Huawei.

Soon after, China retaliated by arresting Mr. Kovrig and Mr. Spavor on espionage charges and imposing sanctions on some Canadian agriculture goods.

If Huawei strikes a deal with U.S. authorities, it would amount to an about face for the company. One year ago, company founder Ren Zhengfei told The Globe in an interview that he would not countenance such a step.

“Not possible,” said Mr. Ren, who is Ms. Meng’s father.

He said “the U.S. is the side that should plead guilty,” rejecting the idea of a bargain even if it would set his daughter free. “It’s not worth it,” he said, calling it “a matter of principle.”

“She has committed no crime,” he told The Globe last year. “And we have full confidence in the judicial system of Canada.”

Since then, Ms. Meng has lost at least one key court battle, with the Supreme Court of British Columbia finding that the extradition case against her met a required standard of double criminality.

Historically, the overwhelming majority of extradition requests from the U.S. result in suspects being removed from Canada.

Ms. Meng, who was arrested by RCMP while transiting through Vancouver, faces charges in the U.S., along with the Chinese telecommunications giant itself. The American charge for which she was arrested in Canada is fraud – lying to a bank – which is a crime in both this country and the United States.

The U.S. alleges that Ms. Meng deceived banks including HSBC about the true nature of the relationship between Huawei and a subsidiary based in Iran, called Skycom, and that this fraud led bankers to clear hundreds of millions of dollars of transactions in violation of U.S. sanctions.

In her fight against extradition, Ms. Wanzhou is accusing the U.S. government of not only using her as a bargaining chip in negotiations with China, but also misleading Canada’s government and courts about the evidence gathered against her.

Ms. Meng’s lawyers are alleging abuse of process by the American government and seeking a stay of extradition proceedings, a request expected to be heard in court in early 2021. They are citing U.S. President Donald Trump’s comments where he said he would “certainly intervene” in the Meng case if it would help get a better trade deal with China.

“These proceedings have been poisoned. They can no longer be reasonably regarded as fair, regardless of the undoubted good faith of the court,” the Huawei CFO’s legal team said in a July, 2020 court filing.

In court, Ms. Meng is challenging key elements of the U.S. case against her, flagging several instances where she alleges that the Americans are distorting the facts to suit their case. She is targeting documents submitted by U.S. prosecutors to describe the evidence supporting the American extradition request.

The United States “has improperly tailored” the record of the case against Ms. Meng “to support its theory of criminal liability,” the Huawei executive’s July, 2020 filings say. This includes selectively quoting evidence.

Michael Kovrig has been in Chinese detention since December 2018, and has been even more cut-off from the outside world since the coronavirus pandemic emerged in China. His wife, Vina Nadjibulla, is spearheading efforts to have him released and returned home to Canada.

The Globe and Mail

- With a file from Canadian Press

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