The viability of one of Canada’s largest rail engineering companies is in question as Prime Minister Justin Trudeau struggles against accusations of obstruction of justice in allegedly attempting to spare the company from a corruption trial.
If convicted of charges of bribing Libyan officials with C$50 million in payments to win government contracts (and defrauding Libya of another C$130 million), SNC Lavalin would be barred from Canadian government contracts for a period of up to 10 years.
Since those charges were filed by the RCMP (Royal Canadian Mounted Police) three years ago, the accused company successfully lobbied the Trudeau government to legislate an alternative to trial—so-called “deferred prosecution agreements” or U.S.-style plea deals, that would punish corporate malefactors without triggering criminal conviction.
In a clear recognition that the Prime Minister’s tenure in office is at stake, Trudeau’s closest political adviser, Gerald Butts, suddenly resigned Feb. 18, citing the SNC Lavalin scandal as a distraction from his boss’s agenda.
SNC Lavalin has admitted in the past to making illegal payments to Trudeau’s Liberal Party by disguising corporate transfers as legal individual donations by its employees.
The prima facie case of political malfeasance places the Trudeau government squarely in the Liberal Party’s long history of unethical entanglements with corporate campaign donors. SNC Lavalin itself has been the focus of domestic and foreign bribery and corruption scandals for many years.
The obstruction of justice accusation emerged first in The Globe and Mail, whose source is believed to be then-Minister of Justice Jody Wilson-Raybould, an indigenous Canadian whose appointment to the top law enforcement position was seen as a progressive step toward reconciliation with Canada’s native tribes. After resisting Trudeau’s pressure to spare SNC Lavalin from conviction, Wilson-Raybould was demoted to the veterans’ affairs department, a drop from the highest to the lowest ministerial rank. She quit her new post Feb. 12 and sought legal advice as to how much she can reveal about the obstruction of justice accusation.
Wilson-Raybould’s actions have probably inoculated Canada’s justice system against lenient treatment of SNC Lavalin. The likelihood now is that the company will be convicted of corruption and banned from new federal contracts for a decade. SNC Lavalin is currently a prime engineering contractor for Montreal’s Réseau Express Métropolitain (REM) driverless light railway and Vancouver’s 19-km Skytrain extension. (On Feb. 1, the company’s former CEO, Pierre Duhaime, pleaded guilty to
Since no major transportation projects proceed without federal financial participation, SNC Lavalin will be banned from such contracts should the end result be trial and conviction. That would make SNC Lavalin’s survival as a Canadian company difficult, particularly since it is already banned from overseas work funded by the World Bank for corruption of host-country governments. (On Oct. 26, 2018, current President and CEO Neil Bruce posted “An Open Address to Canadians” addressing what he calls “shortcomings that took place prior to 2012, which should have never taken place,” and stating, “The Government of Canada passed legislation in 2018 to allow companies to settle charges via a remediation agreement, and yet the new law is not being made available to SNC-Lavalin for unknown reasons.”)
And, if the RCMP investigation is allowed to proceed normally, the Trudeau himself could face criminal charges for obstruction of justice on evidence revealed by his own former Justice Minister. At the very least, it will color his campaign in the federal election that must be called for no later than Oct. 21 this year.
Trudeau may well be tempted to advance the vote to this spring before the denouement of the SNC Lavalin scandal, and before the country’s opposition parties can surmount their own leadership frailties.