- SNC-Lavalin Group Inc.'s construction division pleaded guilty to fraud on Wednesday and agreed to a $280-million fine and three-year probation order, concluding a years-long legal saga over the Quebec engineering giant’s past activities in Libya. The settlement came only days after Sami Bebawi, a former executive vice-president with the company, was convicted by a Montreal jury in a separate case.
- Prime Minister Justin Trudeau, whose office was engulfed in controversy last year for its efforts to settle SNC’s case out of court, defended his conduct in a year-end interview with The Canadian Press on Wednesday, but acknowledged he could have handled the SNC file better. “This process unfolded in an independent way and we got to an outcome that seems positive for everyone involved, particularly for the workers," he said.
- Justice Minister David Lametti said federal prosecutors arrived at Wednesday’s guilty plea independently, and he learned of it only a day earlier. “Canadians can have confidence that our judicial and legal systems are working as they should," he said.
- Mr. Lametti’s predecessor, Jody Wilson-Raybould – whose refusal to intervene in SNC’s case led to civil war within Mr. Trudeau’s cabinet and party – welcomed Wednesday’s outcome as a victory for prosecutorial independence. “2019 began with very public questions about the rule of law in our country,” she tweeted. “I am glad to see it end with that principle being upheld. The justice system did its work.”
SNC-Lavalin and Libya: A primer
What is SNC-Lavalin? Based in Montreal, SNC-Lavalin is one of the world’s largest engineering firms, active in more than 160 countries. In Canada, where it employs about 9,000 people, it’s responsible for things like Quebec’s James Bay hydroelectric project and the Canada Line transit system in Vancouver. The Canadian government has invested heavily to help the company succeed over the years: From 2002 to 2018, the company got at least $2-billion in loans from Export Development Canada, making it one of the biggest beneficiaries from the federal export agency, according to data obtained by The Globe. But beyond Canada’s borders, some of SNC’s projects, and the methods allegedly used to obtain them, got it into trouble: Allegations of bribery in Bangladesh got the company barred from World Bank-financed projects in 2013, and this year, a former SNC CEO pleaded guilty to breach of trust in the corruption scandal surrounding a Montreal hospital project.
Why does it matter so much? SNC is perceived to be a major breadwinner for Canada’s (and particularly Quebec’s) economy, but in terms of job numbers, the picture is more complicated. The company has fewer than half as many Canadian jobs now than it did in 2012, and there are four times as many employees outside Canada than inside. Meanwhile, its legal troubles, leadership changes and political hurdles to its business in Saudi Arabia have cost it billions in revenue and left it potentially vulnerable to foreign takeover. The federal fraud case has a high potential cost for SNC, because companies convicted of those charges are barred from federal government contracts for 10 years.
SNC-Lavalin’s employees by area
Rest of world
Note: SNC has provided estimates of its Canadian work
force. The rest of world figure comes from a subtraction
of the Canadian and British numbers from an overall
figure in the company’s 2018 annual report.
MATT LUNDY, THE GLOBE AND MAIL, SOURCE: SNC-LAVALIN
SNC-Lavalin’s employees by area
Rest of Canada:
Rest of world
Note: SNC has provided estimates of its Canadian work force. The rest
of world figure comes from a subtraction of the Canadian and British
numbers from an overall figure in the company’s 2018 annual report.
MATT LUNDY, THE GLOBE AND MAIL, SOURCE: SNC-LAVALIN
SNC-Lavalin’s employees by area
British Columbia: 1,000
Rest of Canada:
Rest of world:
Rest of world
Note: SNC has provided estimates of its Canadian work force. The rest of world figure comes from a
subtraction of the Canadian and British numbers from an overall figure in the company’s 2018 annual report.
MATT LUNDY, THE GLOBE AND MAIL, SOURCE: SNC-LAVALIN
What did it do in Libya? During the rule of the late dictator Moammar Gadhafi, SNC was involved in major public-work projects in the North African country, including a prison, an irrigation system and a new airport. In 2011, Swiss authorities and the RCMP began investigating claims that SNC had been bribing Libyan officials to get access to construction contracts. A former SNC executive vice-president, Riadh Ben Aissa, pleaded guilty in Switzerland to bribery and money-laundering in connection with SNC’s Libyan projects, which he admitted involved bribes to Mr. Gadhafi’s son, Saadi.
Who was prosecuting the company? Federal prosecutors charged SNC in 2015 with attempted bribery and fraud over its activities in Libya from 2001 to 2011. SNC tried to strike a deal with the prosecutors, what’s called a “deferred prosecution agreement.” DPAs – an established practice in the United States and Britain, but introduced to Canada only last year through new corporate-crime legislation – let companies admit wrongdoing, pay compensation and, in exchange, avoid trials that might be more costly or damaging to their reputations. On Oct. 10, 2018, the Public Prosecution Service of Canada announced that there would be no such deal. For months, prosecutors then worked quietly on a settlement, until on Dec. 18, 2019, SNC’s construction division pleaded guilty and agreed to a $280-million fine and three-year probation order. Prosecutors dropped another, more serious charge of bribery.
More reading on SNC-Lavalin
What happened to Jody Wilson-Raybould?
Jody Wilson-Raybould was the federal justice minister for three years, the first Indigenous woman to hold that post. In January, 2019, Mr. Trudeau reassigned her to Veterans Affairs in a cabinet shuffle, giving the justice portfolio to David Lametti. She didn’t last long in the new job, quitting from cabinet on Feb. 12, though she continued to serve as MP for Vancouver-Granville. Then, as the SNC affair dragged on, the Liberals booted her and former cabinet colleague Jane Philpott (more on her below) from caucus on April 2. Ms. Wilson-Raybould ran for and won her seat as an Independent in this past fall’s election.
In October, 2018, Ms. Wilson-Raybould had faced a crucial choice about the SNC case when the company lost its bid for a DPA. The Globe and Mail, citing sources familiar with the matter, reported on Feb. 7 that she had come under pressure from the Prime Minister’s Office to intervene and make the Public Prosecution Service of Canada reconsider a deal, but she refused. The Prime Minister and then Privy Council Office chief Michael Wernick later denied that anything improper had happened (more on that below), but Ms. Wilson-Raybould was unable to give her version of events because of solicitor-client privilege. Finally, Mr. Trudeau gave a cabinet order allowing her to speak about her tenure as justice minister, though not events after that, or conversations between her and the PPSC chief. That cleared the way for a dramatic hearing of the House justice committee on Feb. 27, where Ms. Wilson-Raybould alleged, among other things, that:
- She faced four months of “consistent and sustained” pressure from the PMO, PCO and Finance Minister’s office to “politically interfere” in the SNC case, despite her insistence that overruling the prosecutors for political reasons would be inappropriate. Asked several times if she thought this pressure was illegal, she said no.
- Mr. Trudeau, Mr. Wernick, PMO officials and the Finance Minister’s chief of staff repeatedly reminded her or her staff about the then-upcoming Quebec provincial election. They feared a threat that SNC would move its Montreal headquarters, costing thousands of jobs, which would be politically disastrous to the Liberals.
- Mr. Trudeau's principal secretary, Gerald Butts, at one point told her chief of staff there "is no solution here that doesn't involve some interference," and that the Prime Minister's chief of staff, Katie Telford, said "we don't want to debate legalities any more."
- According to directives given to her then deputy minister, the next justice minister, David Lametti, would have conversations with Mr. Trudeau stressing that the SNC file was a priority.
Weeks after she testified in person, she backed up her version of events with a cache of documents submitted to the committee. She also gave them an audio recording of a December conversation with Mr. Wernick in which he said Mr. Trudeau was “in a pretty firm frame of mind” in his desire to settle the SNC case out of court. Ms. Wilson-Raybould replies:
We are treading on dangerous ground here – and I am going to issue my stern warning – because I cannot act in a manner and the prosecution cannot act in a manner that is not objective, that isn’t independent. This is the about the integrity of the government. ... This is going to look like political interference by the Prime Minister.
When Mr. Butts came before the committee on March 6, he gave a different timeline of events, stating several times that he didn’t know Ms. Wilson-Raybould had made up her mind in September until after she had left the job in January. He also talked about events after the cabinet shuffle, things she said she couldn’t talk about. He claimed that Ms. Wilson-Raybould had been offered the Indigenous Services post, but turned it down because of concerns about enforcing the Indian Act, and that while Justice was her “dream job,” Mr. Trudeau had to move her to another post to avoid setting a precedent where ministers could say no to reassignment: “If you allow a minister to veto a cabinet shuffle by refusing to move, you soon will not be able to manage cabinet. It was not possible in this instance for the Prime Minister to go further than additionally offering the Veterans Affairs post.”
MORE READING ON JODY WILSON-RAYBOULD
What is the Public Prosecution Service of Canada?
At the heart of the SNC-Lavalin controversy is the PPSC, an independent agency that oversees federal prosecutions and looks into violations of the Canada Elections Act. Within that mandate, the PPSC’s director, called the Director of Public Prosecutions, essentially acts as the attorney-general’s deputy (though there is also a deputy justice minister in the House of Commons, currently Nathalie Drouin). The justice minister can’t give the DPP orders on election matters, but in any other kind of case, the minister can issue directives to them or even take charge of prosecutions. So in the SNC case, it would be within the justice minister’s power to ask the DPP to reach a settlement even if they had previously decided not to.
More reading on the PPSC
A glossary of denials
The day The Globe’s original story broke, both Prime Minister Justin Trudeau and Mr. Lametti denied the reported allegations. But the wording of those denials is important. Here’s what Mr. Trudeau said, speaking at a news conference on transit funding in Vaughan, Ont., on Feb. 7:
The allegations reported in the story are false. At no time did I or my office direct the current or previous attorney-general to make any particular decision in this matter.
Asked whether the PMO exerted any influence, he focused again on the word “direct”:
As I’ve said, at no time did we direct the attorney-general, current or previous, to make any decision whatsoever in this matter.
The Globe’s initial reporting never said that Mr. Trudeau had directed Ms. Wilson-Raybould to act, only that she was pressed to intervene and declined. On Feb. 7, Mr. Lametti did deny that he or Ms. Wilson-Raybould had been pressed on SNC:
As the Prime Minister said earlier today, neither the Prime Minister nor his office put my predecessor or myself under pressure nor gave any directives.
Then at a Vancouver news conference on Feb. 11, Mr. Trudeau acknowledged that he had discussed the SNC-Lavalin matter with Ms. Wilson-Raybould last fall, but did not address the allegations that she was pressured. Instead, he said he had met twice with Ms. Wilson-Raybould in Vancouver in recent days, and that:
She confirmed for me a conversation we had this fall where I told her directly that any decisions on matters involving the director of public prosecutions were hers alone.
Then on Feb. 15, after Ms. Wilson-Raybould’s resignation, Mr. Trudeau said she had approached him in September of 2018 to clarify whether he was ordering her to make a particular decision on the SNC prosecution. He said her question came amid a major lobbying campaign on the matter that included SNC and the Quebec premier:
Which is why Jody Wilson-Raybould asked me if I was directing her or going to direct her to take a particular decision, and I of course said, ‘No,’ that it was her decision to make and I expected her to make it. I had full confidence in her role.
‘Lawful advocacy’ and ‘inappropriate pressure’
At House justice committee hearings on Feb. 21, Mr. Wernick, the PCO chief, added a new phrase to the lexicon – “lawful advocacy” – which was how he described efforts by Mr. Trudeau and senior officials to persuade Ms. Wilson-Raybould to revisit the SNC settlement, and that there was no “inappropriate pressure” applied:
If you boil it down for Canadians as to what is going on here with the facts that we have and all of the facts that I know from my participation in meetings and conversations, we are discussing lawful advocacy.
Mr. Wernick stood by his “lawful advocacy” remarks when he was called back before the committee on March 6. But Ms. Wilson-Raybould’s Feb. 27 testimony to the committee stressed several times that, in her view, the pressure she faced had been “inappropriate.” Mr. Trudeau responded by saying he disagreed with Ms. Wilson-Raybould on that point:
I therefore completely disagree with the former attorney-general’s characterization of events.
‘Normal operations of government’
When Mr. Butts testified on March 6, he denied that anything improper had happened, and that even if something was being done improperly, Mr. Trudeau would have “put a stop to it” had he known about it. In his written statement, he said the talks with Ms. Wilson-Raybould had been lawful and normal:
I am firmly convinced that nothing happened here beyond the normal operations of government. Highly trained legal staff in PMO worked closely with PCO’s legal team on all aspects of the file ... people may have a caricature in their mind based on media coverage about what a relationship between a minister and PMO staff looks like. This was certainly not that.
‘Erosion of trust’
At a March 7 news conference in Ottawa, Mr. Trudeau acknowledged that there had been frictions behind the scenes between his justice minister and the PMO, but said he didn’t know about them until it was too late:
What has become clear over the various testimonies is over the past months there was an erosion or trust between my office, my former principal secretary and the former attorney-general. I was not aware of that erosion of trust. As Prime Minister and leader of the federal ministry, I should have been.
‘I assume responsibility’
Months passed and the SNC affair quieted down while the Ethics Commissioner – whose office kept working while he was on leave for health reasons – pursued an investigation into the matter. When his final report came out on Aug. 14, it concluded that Mr. Trudeau’s actions had been improper and breached Section 9 of the Conflict of Interest Act. The Prime Minister gave a news conference in Niagara-on-the-Lake, Ont., where he took responsibility for his actions, but defended them as an effort to save the jobs affected by SNC’s legal problems, saying he “can’t apologize for standing up for Canadian jobs”:
The buck stops with the Prime Minister. I assume responsibility for everything that happened in my office. This is important because I truly feel that what happened over the past year shouldn’t have happened.
Who’s left the fold
Ms. Wilson-Raybould hasn’t been the only one to leave an important political post since the SNC controversy began: It’s also cost Mr. Trudeau another cabinet minister and a top aide. Here’s more about them.
Alongside Ms. Wilson-Raybould, who became a close friend after the 2015 election, Ms. Philpott was a star in the Trudeau cabinet, serving variously as ministers for health, Indigenous services and finally as president of the Treasury Board. On March 4, she abruptly quit cabinet, saying in her resignation letter she had “serious concerns” about Mr. Trudeau’s alleged behaviour and lost confidence in how he handled the SNC issue:
The solemn principles at stake are the independence and integrity of our justice system. It is a fundamental doctrine of the rule of law that our Attorney General should not be subjected to political pressure or interference regarding the exercise of her prosecutorial discretion in criminal cases. Sadly, I have lost confidence in how the government has dealt with this matter and in how it has responded to the issues raised.
Ms. Philpott was dropped from the Liberal caucus on April 2. Like Ms. Wilson-Raybould, she ran as an Independent in October, but lost her Markham-Stouffville seat to the Liberals’ Helena Jaczek.
More reading on Jane Philpott
Aside from Ms. Wilson-Raybould, the SNC affair has taken another political casualty among the Prime Minister’s inner circle: Mr. Trudeau’s principal secretary and old friend, Gerald Butts. In a Feb. 18 letter, he announced he was quitting his PMO job to protect the office from the accusations of political influence, which he categorically denied:
I categorically deny the accusation that I or anyone else in his office pressured Ms. Wilson-Raybould. We honoured the unique role of the Attorney General. At all times, I and those around me acted with integrity and a singular focus on the best interests of all Canadians.
... Any accusation that I or the staff put pressure on the Attorney General is simply not true. Canadians are rightly proud of their public institutions. They should be, because they work. But the fact is that this accusation exists. It cannot and should not take one moment away from the vital work the Prime Minister and his office is doing for all Canadians. My reputation is my responsibility and that is for me to defend. It is in the best interests of the office and its important work for me to step away.
The exit of Mr. Butts, an important engineer the Liberals’ 2015 election victory, appeared to leave Mr. Trudeau without one of his two top aides at a crucial time ahead of the 2019 election. But then it turned out he would still be working for the Liberals after all, as an adviser at the Liberal headquarters in Ottawa. The Liberals emerged from October’s election with a minority government.
MORE READING ON GERALD BUTTS
Where the House stands
Opposition: As the SNC revelations came out before October’s election, both the Conservative and NDP leaders attacked Mr. Trudeau and questioned his moral right to govern. Conservative Leader Andrew Scheer pressed several times to have the RCMP look into the matter, while the NDP’s Jagmeet Singh sought a public inquiry.
Liberal caucus: MPs in Mr. Trudeau’s party have generally kept quiet about Ms. Wilson-Raybould’s allegations or publicly backed the Prime Minister. Back in March, The Globe canvassed 179 MPs to see what they thought: More than 30 responded, with most defending Mr. Trudeau’s actions. Here’s a compendium of their responses.
Who’s looked into this, and who hasn’t
RCMP: Ms. Wilson-Raybould has not alleged any criminal wrongdoing on the Liberals’ part, but Mr. Scheer of the Conservatives has repeatedly called for an RCMP probe. The Globe learned that the RCMP had been looking into potential obstruction of justice, and interviewed Ms. Wilson-Raybould on Sept. 11, but cabinet-confidentiality restrictions – which the government refused to lift entirely – left them unable to question all witnesses or gain access to certain documents, according to sources granted anonymity by The Globe. The probe was put on hold during the 2019 election, as per RCMP rules about politically sensitive operations during election campaigns.
Ethics commissioner: At the behest of two NDP MPs, Ethics Commissioner Mario Dion announced on Feb. 11 that he would look into the matter under the terms set out in the Conflict of Interest Act. His report, which came out on Aug. 14, rebuked the Prime Minister and said he had contravened the act by trying to sway Ms. Wilson-Raybould’s and the prosecutors’ decisions.
Anne McLellan: On March 18, Mr. Trudeau named a former Liberal justice minister as a special independent adviser to look into whether the roles of justice minister and attorney-general should be separated. Mr. Trudeau received her findings but didn’t release them until hours after Mr. Dion’s report. She concluded that there was no reason to split up the two portfolios and that there were enough safeguards for prosecutorial independence under the current system.
House ethics committee: When Mr. Dion’s report came out, opposition MPs tried unsuccessfully to get the ethics committee to summon him to testify, as well as nine other witnesses Mr. Dion wrote that he was unable to question properly.
House justice committee: Earlier this year, this committee held a broad study of SNC and deferred prosecution agreements in general, not focused specifically on the allegations of interference. It voted on March 19 not to hear any further witnesses, despite motions from the opposition to keep going. Before that, it heard testimony from Ms. Wilson-Raybould on Feb. 27 and Mr. Butts on March 6, and twice from the Privy Council Clerk and deputy justice minister.
OECD: In 1999, Canada signed on to a global anti-bribery convention overseen by the Organization for Economic Co-operation and Development. The OECD’s working group on bribery announced on March 11 that it is concerned by the SNC allegations and would monitor the outcome of the various investigations.
Analysis and commentary
From the comments: How readers saw this story evolve
Compiled by Globe staff
With reports from Robert Fife, Steven Chase, Kathryn Blaze Baum, Sean Fine, Shawn McCarthy, Janice Dickson, Justine Hunter, Paul Waldie and The Canadian Press