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Report On Business How Canada is gaining a reputation as a place for bribers to do business

Montreal Mayor Gérald Tremblay resigned after allegations that he ignored corruption.

CHRISTINNE MUSCHI/REUTERS

Martin Dumont, the disgraced star witness of the Charbonneau inquiry, sparked Gérald Tremblay's resignation when he asserted with composure that the Montreal mayor had turned a blind eye to the illegal cash donations that were bursting out of the party's safe. By a sad twist of irony, it was a lie – or an assertion so contorted by contradiction it is now shrouded in doubt.

"I don't need to know this," is what Mayor Tremblay said, according to Mr. Dumont. That was the breaking point for Montrealers, who felt that Mr. Tremblay's resignation was overdue after a series of scandals had stained his administration beyond what any heavy-duty detergent could ever clean.

But what made Mr. Dumont's assertion all the more believable is that we are very good at looking the other way when it serves our purposes. How Canadian companies land contracts in remote countries gangrened with corruption, we didn't want to know. That is, until the companies really got too cozy.

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The federal government has just tabled a stiffer law to prosecute companies that distribute bribes to win contracts abroad, after a series of high-profile cases has drawn attention to the unpalatable costs of doing business in Third World countries.

Calgary-based Griffiths International recently disclosed it paid a $2-million bribe to secure oil and gas exploration contracts in Chad, which led to a more than $10-million fine. The Mounties believe that SNC-Lavalin Group Inc. showered the third son of Libya's late dictator with $160-million worth of gifts, according to a search warrant just unsealed.

Canadians like to think of themselves as a law-abiding people, but the fact is that the country has stood out in the Western world as a convenient place for bribers to do business.

While Canada ratified the OECD convention to combat the bribery of foreign public officials and enacted a law that criminalized such payouts in the late 1990s, no real action ensued.

Only in 2011 did Canada get serious when it fined Niko Resources, a Calgary exploration company, with a $9.5-million penalty. The case was sickening: Niko bribed the junior Bangladeshi Energy Minister responsible for setting the compensation the company was to pay to a village where one of its wells exploded.

Canada is now stepping up its act with maximum sentences for bribing foreign officials that are as severe as the 14-year ones for bribes paid to local politicians. It is joining countries like the United States that are actively pursuing foreign corruption.

Cases involving multinationals now surface with the evenness of a metronome. Tuesday, the Italian police arrested the CEO of defence group Finmeccanica SpA over allegations Giuseppe Orsi paid bribes to secure the sale of 12 helicopters in India. Wal-Mart Stores Inc. is under investigation for the "gestores" that its Mexican affiliate allegedly paid out to local officials. And the U.S. investigation that was launched into Avon Products Inc.'s questionable payments in China was extended to other countries in Latin America and Asia.

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Once the worm is in the apple, as the French saying goes, is it such a stretch to think that the dubious practices that some Canadian companies have used overseas have made their way back home? Or maybe it is the other way around?

Had you suggested this even recently, business lobby groups would have sued you faster than Lucky Luke can draw its gun on the Dalton brothers. But with the Charbonneau inquiry, they now stare in embarrassment at their feet.

Of all the eye-popping stories heard since this inquiry began, Michel Lalonde's recent testimony was the most devastating. The president of Genius Conseil is one of the little guys of the engineering business. But in detailing how firms allegedly colluded and funnelled illegal cash contributions to Gérald Tremblay's party, he implicated just about every engineering company of importance in Quebec: Cima+, Dessau, Groupe SM, Genivar, Roche, SNC-Lavalin, Tecsult (now Aecom) and the list goes on. Big firms gave $200,000, small ones gave $100,000, Mr. Lalonde contends. And everybody got their plumped-up contracts.

Unfortunately, Mr. Lalonde is no flaky Martin Dumont. Genivar uncovered "inappropriate conduct" soon after Mr. Lalonde's testimony and put an executive on leave of absence until it completes its internal investigation.

While none of this has been proven in court, Genivar's latest revelations support the idea that collusion was systemic among the engineering firms that once made Quebec proud.

This is a truth so ugly it is painful to look at.

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