Canada’s top bureaucrat suggested to SNC-Lavalin’s chief executive officer that the company should approach the director of public prosecutions, Kathleen Roussel, to discuss the “public interest argument” for avoiding a criminal prosecution of the engineering and construction giant, according to handwritten notes submitted to the House of Commons Justice committee.
In a Sept. 18, 2018, meeting with Neil Bruce, CEO of SNC-Lavalin Group Inc., Privy Council Clerk Michael Wernick also asked if a new law that allowed out-of-court settlements in some cases did not apply for the Montreal company, when would it apply.
The Liberal government amended the Criminal Code in 2018 to allow prosecutors to use deferred prosecution agreements as an alternative to trials. When it introduced the measure, the government said prosecutors would be able to use this tool at their discretion to address certain economic crimes if they considered it to be in the “public interest.”
The notes of the meeting were taken by Catrina Tapley, deputy-secretary of the cabinet for operations, and were submitted to the Justice committee on March 6, when Mr. Wernick testified for the second time. Aside from Mr. Bruce, SNC-Lavalin officials Sam Boutziouvis and Erik J. Ryan were at the meeting.
At one point in the notes, Mr. Wernick is quoted as saying: “Go to Kathleen on public interest argument” and “Will want to get it right.”
Later in the notes, the following is attributed to Mr. Wernick: “Parliament gave this tool; if not here then when would you!”
The Globe and Mail asked the privy council clerk why he advised SNC-Lavalin to go to Ms. Roussel to make a public-interest argument in favour of a deferred prosecution agreement for the company.
The Globe also asked why Mr. Wernick argued in favour of using a deferred prosecution agreement, recently adopted by Parliament, to resolve charges of corruption and fraud against SNC-Lavalin when that would be Ms. Roussel’s decision to make. The day before that meeting, then attorney-general Jody Wilson-Raybould had made it clear to Prime Minister Minister Justin Trudeau and Mr. Wernick that she supported Ms. Roussel’s decision to prosecute the company.
Ms. Wilson-Rabyould told the Justice committee last week she was subjected to “consistent and sustained” political pressure from Mr. Trudeau and other top officials up until late December. In January, she was demoted to Veterans Affairs, which she believes was related to the attempts to get a settlement for SNC-Lavalin.
Mr. Wernick did not reply to The Globe’s request for comment about his discussions with Mr. Bruce and the other SNC-Lavalin executives.
However, Stephane Shank, the manager of media relations in the Privy Council Office, replied: “The clerk has provided testimony to the Justice committee twice. He also indicated that he will co-operate with the Ethics Commissioner. The clerk has no further comment to provide at this time.”
The Globe reported on Feb. 7 that officials in the Prime Minister’s Office put pressure on Ms. Wilson-Raybould when she was justice minister and attorney-general to order a settlement with the Montreal company.
SNC-Lavalin was informed on Sept. 4 that the director of public prosecutions felt it was not appropriate for the Crown to negotiate a deferred prosecution agreement with the company.
Conservative MP Michael Cooper, a member of the Justice committee, said the notes of the Sept. 18 meeting with Mr. Wernick and the SNC-Lavalin executives are deeply troubling.
“It is further evidence that he [Mr. Wernick] was up to his eyeballs in this,” Mr. Cooper said. “He was determined to see that there was an intervention in the prosecution, and it is further evidence that he acted completely inappropriately.”
On Wednesday, the Commons Justice committee heard that SNC-Lavalin chair Kevin Lynch voiced frustration to Canada’s top bureaucrat last October about the government’s refusal to negotiate a deferred prosecution agreement.
Mr. Wernick revealed the Oct. 15 call with Mr. Lynch a week after Ms. Wilson-Raybould testified. Mr. Wernick said Mr. Lynch, who was clerk of the privy council from 2006 to 2009, wanted to know if more could be done to help the company.
“Mr. Lynch, as the chair of the [SNC-Lavalin] board, expressed his frustration that he did not understand why a [deferred prosecution agreement] was not being considered," Mr. Wernick told MPs. “He knew that the board, in its trustee relationships for the shareholders and the company, was going to have to take some tough decisions in October and November. My recollection of the conversation is that he asked, ‘Isn’t there anything that can be done?' ”
The clerk said he told Mr. Lynch during the call – which lasted less than 10 minutes – that he should take his concerns to Ms. Wilson-Raybould, and the director of public prosecutions. "I told him in the firmest, curtest possible terms, ‘No, he would have to go through the attorney-general and the director of public prosecutions through his counsel.’ ”
An SNC-Lavalin spokeswoman said Mr. Lynch had requested a call with the clerk to “inform him” about an Oct. 10 news release the company issued and “to reiterate the sentiment expressed in the company’s statement.” That release informed investors the director of the Public Prosecution Services of Canada had advised SNC it would not be invited to negotiate a deferred prosecution agreement, and said it remained open and committed to striking such a deal.
The government has not revealed why the director decided SNC-Lavalin did not qualify for a deferred prosecution agreement.
Legal experts say a review of the factors the prosecution service must weigh suggests where SNC-Lavalin might have run into trouble.
Prosecutors must consider how the alleged misconduct was discovered. In this case, legal experts say, it was uncovered by Swiss authorities.
“The number one factor that is playing against SNC-Lavalin is that they did not self-report,” University of Ottawa law professor Jennifer Quaid said.
Another factor is the nature and gravity of the alleged misconduct. SNC-Lavalin faces one charge of corruption under the Corruption of Foreign Public Officials Act and one charge of fraud under the Criminal Code. It is alleged that SNC paid millions of dollars in bribes to public officials in Libya between 2001 and 2011 to secure government contracts.
Corruption is “a serious crime of dishonesty,” Prof. Quaid said.
Prosecutors must also consider the impact on victims.
The Sept. 18 notes record Mr. Bruce telling the clerk that the prosecution’s "star witness is the guy who caused the problem.” Former SNC-Lavalin executive Ben Aissa, who pleaded guilty in Switzerland in 2014 to bribery and laundering millions to win SNC-Lavalin contracts in Libya, is now a co-operative witness for the prosecution against SNC-Lavalin.
In 2018, Mr. Aissa plead guilty to a single charge of using forged documents, while the former CEO of SNC-Lavalin, Pierre Duhaime, plead guilty in 2019 on numerous charges in relation to a $1.3-billion Montreal hospital construction project won by SNC-Lavalin.
Sandy Garossino, a former provincial Crown prosecutor in B.C., said the fact SNC-Lavalin is accused of bribing Libyan dictator Muammar Gaddafi’s brutal regime in exchange for lucrative contracts is something that would weigh against the firm.
“It’s not just the Corruption of Foreign Public Officials Act the company is charged under but the circumstance of these particular charges – that relates to an oppressive foreign regime that was notorious for its brutality."
Other factors include whether the company has taken disciplinary action, including firing those responsible, and corrective action to ensure against a repeat of the conduct. SNC-Lavalin says executives who were responsible for the wrongdoing have left the company, and it has reformed its ethics and compliance rules.
Given the nature of the allegations, Prof. Quaid said, Ms. Roussel must have been concerned about SNC-Lavalin’s case being the first use of a deferred prosecution agreements. ”Roussel is thinking: what a terrible first case. What a template we are setting,” Prof. Quaid said.