SNC-Lavalin affair

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The SNC-Lavalin affair (French: L'affaire SNC-Lavalin),[1] also known as the SNC-Lavalin controversy or SNC-Lavalin scandal, and colloquially referred to as LavScam[2], is an ongoing political scandal in Canada involving alleged political interference and obstruction of justice by the Prime Minister's Office. The allegations centre around purported pressure put on Jody Wilson-Raybould, Canada's Minister of Justice and Attorney General at the time, to intervene in an ongoing criminal prosecution case against Quebec construction giant[3] SNC-Lavalin.[4]

During Justice Committee hearings, Wilson-Raybould testified regarding efforts of various members within government to interfere in her duty as Attorney General by pressuring her to offer SNC-Lavalin a deferred prosecution agreement.[5] The Trudeau government has maintained that no undue pressure was applied to the Attorney General, that no laws were broken, that use of a deferred prosecution agreement could save 9,000 jobs in Canada, and that the whole situation resulted from a misunderstanding and "erosion of trust" between Prime Minister Justin Trudeau and Wilson-Raybould.[6][7][8]

Background[edit]

SNC-Lavalin[edit]

On 19 February 2015, the Royal Canadian Mounted Police (RCMP) and the Public Prosecution Service of Canada (PPSC) laid charges against SNC-Lavalin Group Inc., SNC-Lavalin International Inc. and SNC-Lavalin Construction Inc. Each firm was charged with one count of fraud under section 380 of the Criminal Code of Canada and one count of corruption under Section 3(1)(b) of the Corruption of Foreign Public Officials Act. The charges stemmed from the activities of the company in Libya under Muammar Gaddafi's government from 2001 to 2011. It was alleged that the company bribed Libyan public officials with C$48 million and defrauded organizations of an estimated C$130 million.[9][10]

If convicted, under Integrity Regime policy, SNC-Lavalin could be banned from bidding on government contracts for up to 10 years.[11]

In 2016, the company started a lobbying effort with the newly elected Liberal government to avoid the criminal prosecution. The effort lasted two years and involved 51 meetings with government officials, including those in opposition leaders offices as well as the newly elected Coalition Avenir Québec government.[12][13] Targets of SNC-Lavalin's lobbying included the Minister of Public Services and Procurement, Carla Qualtrough, as well as officials in the Prime Minister's Office (PMO).[14] The company advocated for the rapid adoption of legislation allowing deferred prosecution agreements and changes to Ottawa's integrity regime that prevents it from doing business with bad actors.[14]

In 2018, the Commissioner of Canada Elections, on recommendation from the Director of Public Prosecutions, charged former SNC-Lavalin Executive Vice President Normand Morin[15] in the Court of Quebec with orchestrating and soliciting political donations from employees or their spouses to Canadian federal political parties anonymously on behalf of SNC-Lavalin to be reimbursed afterwards from 2004 to 2011. The amounts paid included approximately C$110,000 to the Liberal Party (and C$8,000 to other Canadian political parties).[16][17] Morin pleaded guilty in 2019 to two out five charges of skirting Canada's election financing laws.[18]

Deferred prosecution agreements[edit]

In 2018, Prime Minister Justin Trudeau's government enacted deferred prosecution agreement (DPA) legislation as amendments to the Criminal Code after SNC Lavalin lobbied for such a provision for some years.[19][20] Through a DPA, sentencing and remediation agreements are negotiated, under the supervision of a judge, between federal prosecuting authorities and a corporation charged with an offence, usually in the context of fraud and/or corruption. Following approval and successful completion of the terms of the agreement, a company may apply for a judicial stay of criminal proceedings, and thereby avoid a criminal prosecution, trial, and penalties.[21][22]

Prosecutorial independence[edit]

Prosecutorial independence is a well established principle of Canadian constitutional law. In Miazga v Kvello Estate, the Supreme Court of Canada held, "The independence of the Attorney General is so fundamental to the integrity and efficiency of the criminal justice system that it is constitutionally entrenched. The principle of independence requires that the Attorney General act independently of political pressures from government."[23] Similarly, in Krieger v. Law Society of Alberta, the Supreme Court held, "It is a constitutional principle that the Attorneys General of this country must act independently of partisan concerns when exercising their delegated sovereign authority to initiate, continue or terminate prosecutions."[24] The role of the Attorney General of Canada is bound by the so-called "Shawcross doctrine", based on a statement by Lord Shawcross in 1951. That statement outlines the parameters of what the Attorney General can and cannot take into account when making a decision. The doctrine states that the Attorney General must take into account matters of public interest; that assistance from cabinet colleagues must be limited to advice; that responsibility for the decision is that of the Attorney General alone; and that the government is not to put pressure on him or her.[25][26][27]

In practice, prosecutorial independence is enforced by maintaining an independent office responsible for prosecutions. Until 2006, Canada's Federal Prosecution Service was located within the Department of Justice, and, thus, was vulnerable to political interference from the Prime Minister or Cabinet. The PPSC was established in 2006, following the enaction of the Director of Public Prosecutions Act, as an agency independent of the Department of Justice.[28][29]

Under the Act, the Director of Public Prosecutions (DPP) is responsible for all federal criminal prosecutions. However, the Attorney General can issue a directive to the DPP regarding an ongoing prosecution or take control of a prosecution. Such directives must be provided in writing and published as a notice in the Canada Gazette.[28][29][30]

In 2018, SNC-Lavalin brought a case to the Federal Court to compel the Public Prosecution Service to offer it a DPA. In a decision issued on March 8, 2019, the court analyzed DPA legislation and affirmed that a decision not to offer a DPA is within the discretion of the prosecutor. As part of the ruling, the courts reconfirmed the principle of prosecutorial independence, and SNC-Lavalin's application to compel a DPA was struck at an early stage as having "no reasonable prospect of success".[31][32]

Discovery and scandal[edit]

On 7 February 2019, The Globe and Mail reported, citing anonymous sources, that the Prime Minister's Office, under the leadership of Trudeau, pressured then-Attorney General Jody Wilson-Raybould to intervene in ongoing criminal legal proceedings against SNC-Lavalin and abandon prosecution.[4]

The article states that after criminal and corruption charges were brought against SNC-Lavalin in October 2017, the company approached officials in Ottawa, including members of the Prime Minister's Office, to secure a deferred prosecution agreement instead, as a guilty criminal verdict would lead to SNC-Lavalin being barred from federal contracts for 10 years, and possibly result in the company's bankruptcy.[4][33]

In October 2018, the PPSC rejected the request.[4] The report claimed that following the rejection, senior members of Trudeau's cabinet attempted to intervene in the case, urging Wilson-Raybould to overturn the DPP's decision.[4]

Trudeau denied the allegations, stating that "at no time did we direct the attorney general, current or previous, to take any decision whatsoever in this matter."[34]

During a cabinet shuffle on 14 January 2019, in a move widely seen as a demotion,[35][36][37][38] Wilson-Raybould was moved from her role as Attorney General to become the Minister of Veterans Affairs.[39] At the time, both Trudeau and Wilson-Raybould denied that she had been demoted.[40][41]

On 12 February 2019, Wilson-Raybould resigned as Minister of Veterans Affairs.[42] At the time, she did not comment on the allegations regarding the case, citing solicitor-client privilege.[43] Trudeau said that he was "surprised and disappointed" by Wilson-Raybould's decision to resign.[44]

Anonymous sources complained Wilson-Raybould "...had become a thorn in the side of the cabinet, someone insiders say was difficult to get along with, known to berate fellow cabinet ministers openly at the table." The Union of British Columbia Indian Chiefs argued that that this was a "racist and sexist" attack on Wilson-Raybould, prompting Trudeau to apologize for the remarks.[45]

Hearings[edit]

During an emergency meeting on 13 February 2019, the Liberal-dominated Justice Committee of the House of Commons voted down opposition bids to hear from the former attorney general and key members of the Prime Minister's Office, stating that the role of the committee is "not an investigative body". Instead, it was proposed to study some of the legal issues at the heart of the matter, such as the Shawcross doctrine and deferred prosecution agreements. As a result, only current Justice Minister David Lametti, Deputy Justice Minister Nathalie Drouin, and Privy Council Clerk Michael Wernick were originally invited to testify.[46]

The Canadian Senate is currently debating a 28 February motion to launch its own study into the affair, though it has not yet voted on it.[47][48]

Hearing on 21 February 2019[edit]

In response to the claims, the Justice Committee held a series of 3 public hearings on the alleged interference. Wernick, the Clerk of the Privy Council, appeared before the committee. He disputed the allegations of undue pressure on Wilson-Raybould, and stated that The Globe and Mail article contained errors and unfounded speculation.[49][50]

Hearing on 27 February 2019[edit]

Former Canadian Attorney General Jody Wilson-Raybould

Wilson-Raybould testified under oath before the committee, corroborating the report by The Globe and Mail and detailing the alleged obstruction campaign.[5][51]

In her prepared statement, Wilson-Raybould said: "For a period of approximately four months between September and December 2018, I experienced a consistent and sustained effort by many people within the government to seek to politically interfere in the exercise of prosecutorial discretion in my role as the Attorney General of Canada in an inappropriate effort to secure a Deferred Prosecution Agreement with SNC-Lavalin." She provided details and dates of the meetings, and named eleven people involved with the alleged efforts to interfere, including Trudeau, Wernick, Gerald Butts, Katie Telford, Bill Morneau, and other high ranking officials in the PMO and Ministry of Finance.[5]

Despite the attempts to convince her to reconsider her stance given the possible economic and political consequences, Wilson-Raybould said she was "undaunted in her position to not pursue a Deferred Prosecution Agreement." She maintains the belief that despite the pressure she felt, she did not believe what transpired was illegal.[51] When asked why she didn't resign from her position during the time she said improper pressure was being applied, Wilson-Raybould said: "I was, in my opinion, doing my job as the attorney general. I was protecting a fundamental constitutional principle of prosecutorial independence and the independence of our judiciary. That's the job of the attorney general."[51]

Wilson-Raybould also reiterated that Order in Council #2019-0105 leaves in place various constraints that prevent her from speaking freely about matters that occurred after she left the post of Attorney General, communications while she was Minister of Veterans Affairs, her resignation from that post, and her presentation to Cabinet after her resignation.[5] She stated she would be willing to testify further if released from those restrictions.[5]

Hearings on 6 March 2019[edit]

Gerald Butts, the former Principal Secretary to Justin Trudeau

On 6 March 2019, the Justice Committee held a hearing on the claims, at which Butts testified. Butts, who had been implicated in the affair by Wilson-Raybould at the previous hearing, served as the Principal Secretary to Trudeau in the PMO.[52] Butts was allowed to testify in defence of Wilson-Raybould’s sworn testimony without having to swear under oath to tell the truth.

During his testimony, Butts said that he did not want to discredit Wilson-Raybould's testimony, but wanted to offer his own "different version of events." He stated his belief that "nothing inappropriate occurred" and that "nothing inappropriate was alleged to have occurred until after the cabinet shuffle." Butts claimed that any conversations between Wilson-Raybould and officials in the PMO were intended only to ensure that she understood the full potential impact of a criminal conviction of SNC-Lavalin, and that at no time did anyone in the PMO attempt to influence Wilson-Raybould's decision. "It was not about second-guessing the decision. It was about ensuring that the attorney general was making her decision with the absolute best evidence possible," Butts testified. Butts also testified that he believed a period of 12 days was too compressed for such an important decision.[52]

Butts further stated that no concerns were raised by Wilson-Raybould until after the 12 January cabinet shuffle had occurred: "If this was wrong, and wrong in the way it is alleged to have been wrong, why are we having this discussion now and not in the middle of September, or October, or November, or December?"[52]

Liberal members of the committee defeated a motion to produce all government communications between Butts and other parties mentioned in the SNC-Lavalin affair.[53]

At the hearing, Wernick testified for a second time, and stated that the decision to consider a DPA is never final, and that he was only reminding Wilson-Raybould to take public interest considerations into account.[54]

Along with Wernick, Drouin also testified at the hearing. When asked, Drouin stated that it was not for her to say if the time taken for the due diligence review was adequate or not, and that she was not part of the due diligence exercise carried out by Wilson-Raybould regarding this case. Drouin also replied that "It's the responsibility of a prosecutor to assess and reassess... in light of new facts and evidence put in front of the prosecutor."[54]

Drouin also said that at the end of October 2018, the Privy Council Office (PCO) asked her department for advice on the potential impact on SNC-Lavalin if a deferred prosecution agreement was not pursued. That advice was "not provided to PCO at the request of the minister's office".[54]

Hearing on 13 March 2019[edit]

During the Committee hearing, Liberal MPs blocked an effort by the opposition to immediately invite Wilson-Raybould back to speak further about the government’s effort to put pressure on her, despite the former justice minister’s willingness to testify again. Instead, Liberal members voted to reconvene the Justice Committee in-camera on 19 March to consider whether they will invite Wilson-Raybould and other senior government officials to testify.[55]

Closure of Justice Committee hearings[edit]

On 19 March 2019, the Justice Committee held an in-camera meeting where Liberal members introduced and passed a motion to end any further probe into the SNC-Lavalin scandal, indicating that they preferred to leave any remaining investigation to the ethics commissioner. In a written letter to the committee chair, the Liberal members stated that "No witness was prevented from providing evidence on any relevant information during the period covered by the waiver", and concluded that "Canadians can judge for themselves the facts, the perspectives and relevant legal principles."[56] In total, the Justice Committee held 11 meetings over five weeks, accumulating 13 hours of testimony from 10 different witnesses.[57] However, the committee had not yet heard from some individuals implicated in the controversy by Wilson-Raybould, including Telford, Trudeau's chief of staff, and senior staffers Ben Chin, Elder Marques, and Mathieu Bouchard. The Conservative Party and New Democratic Party (NDP) also maintain that Wilson-Raybould should have been called back to committee to respond to testimony from Wernick and Butts.[58]

Reactions and aftermath[edit]

On 11 February 2019, after mounting pressure from the Conservatives and NDP, Mario Dion, Canada's Ethics Commissioner, launched a federal investigation into the alleged interference.[59] The scope of the ethics review is to look into any possible contravention of rules prohibiting public office holders from using their position to influence decisions that could further another person’s private interest.[60]

Elizabeth May, the leader of the Green Party, called for an independent, RCMP-led investigation into the allegations, stating that the "Ethics Commissioner is not the right place to seek such an inquiry; neither is the justice committee".[61]

Following the Justice Committee hearings on 27 February, Andrew Scheer, the Leader of the Official Opposition, issued a statement calling for Trudeau's resignation, saying that the he had "lost the moral authority to govern".[62] On 28 February, Scheer sent a letter to RCMP Commissioner Brenda Lucki, calling for an investigation into Trudeau’s actions in relation to the controversy.[63]

Trudeau gave a short press conference in Montreal following the hearings on 27 February, denying the allegations. "I and my staff always acted appropriately and professionally," he said. "I completely disagree with the characterization of the former attorney general about these events...The decision around SNC-Lavalin was Ms. Wilson-Raybould’s and hers alone. This decision is the attorney general’s alone."[64]

Following Butts' testimony, Trudeau gave a press conference in Ottawa on 7 March. He again denied all allegations of inappropriate or illegal pressure, and said that an "erosion of trust" and "breakdown in communications" had developed between him, his staff and the former Attorney General.[8] Trudeau also confirmed that during a 17 September meeting he asked Wilson-Raybould to "revisit her decision" not to negotiate an out-of-court settlement with SNC-Lavalin,[65] and asked his staff to follow up regarding Wilson-Raybould's final decision.[66]

On 11 March, the OECD Working Group on Bribery, of which Canada is a member, wrote to the Canadian government outlining its concerns about potential political interference in the case, and saying that it would "closely monitor investigations into the SNC-Lavalin affair by the House of Commons justice committee and the federal ethics commissioner". The Working Group did clarify it had no reason to doubt the approach the Canadian government is taking, and noted Canada's willingness to keep it fully informed of the proceedings at its next meeting in June 2019.[67][68]

On 18 March, Trudeau announced that Anne McLellan would serve as a Special Advisor on whether a single minister should continue to hold the positions of Minister of Justice and Attorney General, as well as analyzing the current roles, policies and practices when interacting with the Attorney General. McLellan is to provide independent recommendations to the Prime Minister by 30 June 2019.[69][70]

Following the 19 March Justice Committee meeting, opposition parties asked the House of Commons Ethics Committee to launch its own investigation into the affair, starting by calling Wilson-Raybould to testify by no later than March 27. This motion is likely to be defeated, as the Liberals are a majority of votes on the committee.[47][71]

On 20 March, the CEO of SNC-Lavalin, Neil Bruce, claimed in an interview with The Globe and Mail that the company was "fully reformed" and "does not understand why it was not given a deal." Bruce stated that Canadians had appeared to have "given up" on SNC-Lavalin and asserted that the general public doesn't understand the potential economic consequences of a 10-year ban on federal contracts. He said that "Nobody appears to give a crap about whether we fail or not in Canada."[72]

Resignations[edit]

Gerald Butts denied that Wilson-Raybould had been pressured but resigned from his position on 18 February, claiming that the accusation that he had pressured Wilson-Raybould was distracting from the work of the PMO.[73]

Jane Philpott, the President of the Treasury Board, resigned from her post in Trudeau's cabinet on 4 March. In her statement she said that she had "lost confidence in how the government has dealt with this matter and in how it has responded to the issues raised."[74] Philpott was considered to be one of Trudeau's most trusted ministers.[75][76]

Michael Wernick announced on 18 March that he would be retiring ahead of schedule from his position as the Clerk of the Privy Council and Secretary to Cabinet "due to recent events,"[77] namely the erosion of trust and being seen as partisan which would affect the civil service as a whole and cast serious doubt on his position should an opposition party form the next government.[78]

See also[edit]

References[edit]

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External links[edit]