A look at the law shows interference wasn’t even necessary
April 2, 2019 2:12 pm
In a column three weeks back I wrote about how Justin Trudeau’s interference in the Attorney General’s handling of the SNC Lavalin fiasco could be compared to a small town mayor interfering with the local police chief to protect his friend from prosecution.
In a column two weeks ago I questioned whether 9,000 jobs were ever at risk at SNC Lavalin, as Trudeau has claimed. Trudeau’s argument was that, if convicted, SNC couldn’t bid on federal contracts for 10 years, and 9,000 jobs were therefore at stake. I broke down the numbers and showed far fewer jobs than that at SNC Lavalin were tied to government contracts, and pointed out that the government contracts fund the jobs—if contracts requiring 9,000 jobs go to AECOM or Stantec instead of SNC, 9,000 jobs haven’t been lost to Canada. They’ve just been lost to SNC. I think most people around here understand that if Enbridge lets a contract to Waschuck or OJ or Banister, the number of jobs isn’t changed, it’s just delivered by a different contractor. Enbridge is funding the jobs on oil construction just as the federal government is funding any jobs associated with engineering federal projects—the jobs aren’t magically created by SNC. After that column was published, the chair of SNC came out and said they had never claimed that 9,000 jobs would be lost, so it’s anyone’s guess where the Prime Minister got that number.
The whole SNC Lavalin case began in February, 2015, before the current government was in office, when the RCMP decided to lay a fraud charge under section 380 of the Criminal Code and a bribery charge under section 3 of the Corruption of Foreign Public Officials Act against SNC-Lavalin. The charges came as the result of an investigation into corruption in SNC’s attempts to gain contracts in Libya dating from 2001 to 2010.
Under both the criminal code charge and the Corruption of Foreign Public Officials Act, the company is liable to fines but, if you read through the laws, there is no ban on bidding on federal contracts for those convicted. When you think about it, that makes sense, not many people and companies charged with federal crimes have any federal government contracts to lose.
The whole controversy around SNC Lavalin is the attempt to get a Deferred Prosecution Agreement under Part XXII.1 of the Criminal Code and the efforts of the Prime Minister’s Office to persuade the former Attorney General to overrule the independent prosecutors in the Public Prosecutions office and offer SNC a deferred prosection, which is a way for the company to pay a fine but not have a conviction on the books.
Now let’s go back to when the charges were first laid. When SNC-Lavalin was charged in 2015, there was no such thing as a deferred prosecution in Canada. After being charged, SNC-Lavalin asked prosecutors if they could resolve the case through a Deferred Prosecution Agreement, which they had done in the U.S. and the U.K. They were told that doesn’t exist in Canada. This led to a lobbying effort by the company to get the law changed. It worked. The government added section XXII.1 of the Criminal Code in a less than totally upfront way—the change to the criminal code was included in the 2018 Budget bill.
The bill was passed in June 2018 and came into effect in September 2018, when the Prime Minister’s Office started pressuring the Attorney General to apply the law to SNC Lavalin based on the national economic interest—the fear of lost jobs or the moving of the SNC head office out of Canada—despite the fact that one of the laws SNC was charged under specifically states “if the organization is alleged to have committed an offence under section 3 or 4 of the Corruption of Foreign Public Officials Act, the prosecutor must not consider the national economic interest.”
Things have now become even messier as the Prime Minister’s Office appears to have leaked information on Jody Wilson-Raybould’s suggestion for the Supreme Court of Canada Chief Justice, in a sloppy attempt to suggest there were other reasons she may have been demoted from Attorney General. The pragmatic Manitoba judge she suggested was painted as an extreme Conservative by the sloppy leakers in the PMO, the judge explained he had actually withdrawn his nomination as his wife had cancer and even Liberals have attacked the leak of what has always been considered entirely confidential discussions around judicial appointments.
But wait, there’s more.
The truly crazy thing about all this—as if everything you just read isn’t crazy enough—is that absolutely none of it was necessary.
The whole point of changing a law and attempting to interfere with independent prosecutors was to try to prevent SNC Lavalin from being barred from federal contracts.
As I have already pointed out, there is nothing in the laws SNC was charged under about being barred from federal contracts.
The ban on bidding on federal contracts for 5 or 10 years is a policy of Public Services and Procurement Canada. The policy has been under review since 2017. The government could have changed this policy at any point in the last five years with a simple directive. No changes to the criminal code hidden in a budget required, no pressure on independent prosecutors required, no demotion of an Attorney General required, no besmirching of a respected Manitoba judge’s reputation required.
Lo and behold, the government is now looking at changes to this Public Services and Procurement Canada policy, and changes are expected before the end of April. According to Minister Carla Qualtrough, the proposed changes will include removing fixed bidding disqualification periods of five and 10 years, replacing them with a discretionary ban, which could be any length of time or could be no ban.
That solves SNC Lavalin’s problem, although it still stinks of corruption—changing a federal policy to prevent one company for paying for its crimes. I’m sure a few people in the PMO and SNC Lavalin are kicking themselves and/or each other, wondering why they didn’t think of this approach four years ago.