It now looks highly unlikely that the Trudeau government will be able to spare SNC-Lavalin from prosecution for having violated the federal Corruption of Foreign Public Officials Act.
But if the worst were to happen and the company were to face bankruptcy, the NDP’s candidate in the February 25 Outremont byelection has some suggestions for an innovative way to save what is good about SNC-Lavalin, while not in any way letting the company off the hook for corrupt practices.
More on that later.
As it stands now, the controversy swirling around former minister Jody Wilson-Raybould’s resignation continues unabated.
There are intimations of political interference in a criminal proceeding, and suggestions that the prime minister threw an Indigenous woman minister under the bus because she refused to do the bidding of his politically appointed senior staff.
In that context, new Attorney General David Lametti, a Montreal-area MP, would be taking a huge political risk if he were to now overrule the director of public prosecutions and order a remediation agreement instead of a criminal trial on charges of bribery for the Montreal-based company.
Even if politics were not a consideration, Lametti would almost certainly face significant legal barriers.
Letter of law likely means SNC does not qualify for deferred prosecution
The Liberal government borrowed a page from Stephen Harper when it passed the law allowing for remediation agreements, stealthily, as the very last item in last year’s voluminous budget implementation bill.
Many speculate that the remediation agreement legislation was intended as a life raft for SNC-Lavalin. However, there are a number of provisions in that hastily drafted legislation which suggest SNC-Lavalin is not an ideal candidate for the special treatment it creates.
For starters, the legislation specifies that if an organization is charged with corrupting foreign officials, which SNC-Lavalin is, the government “must not consider the national economic interest” as a motive for negotiating a remediation agreement.
Aside from economic considerations, what other reasons might there be for giving SNC-Lavalin a break? That is not at all evident.
The legislation also states that before offering a remediation agreement the government must take into account whether or not “the organization — or any of its representatives — was previously convicted of an offence or sanctioned by a regulatory body.”
Unfortunately for SNC-Lavalin, some of its executives have indeed been previously convicted, on more than one occasion.
The remediation agreement legislation also obliges the government to consider “whether the organization has made reparations or taken other measures to remedy the harm caused by the act or omission and to prevent the commission of similar acts or omissions.”
SNC-Lavalin claims it has cleaned house, by getting rid of bad apples. But the company has not, as yet, fully and publicly accepted responsibility for having bribed public officials in Libya. In fact, it has not even clearly and unequivocally admitted that the crime occurred.
Saving what’s good while not in any way condoning corruption
Having said all that, it is true that there could be real harm to Canada’s, and especially Quebec’s, economy if the worst were to happen to SNC-Lavalin.
The company — which is a major, Canadian-owned powerhouse — could become easy prey for foreign takeover. That prospect worries many, especially in Quebec. Right now, in fact, company executives are actively considering their options, which could include selling off the company piece by piece.
Julia Sanchez, former head of the Canadian Council for International Cooperation, is the NDP’s candidate for the February 25 byelection in the Montreal riding of Outremont, formerly held by deposed NDP leader Tom Mulcair. She reports that she has picked up an ambivalent and almost anguished attitude toward SNC-Lavalin on doorsteps in the riding.
Sanchez says voters tell her they do not like the fact that there could have been potential interference in a decision of the attorney general. However, she adds, Outremont voters also appreciate that there might be a rationale for a government decision to support SNC-Lavalin, because it is “too big to fail.”
Some people to whom she has spoken, Sanchez reports, express the stronger view that this attack on a Montreal-headquartered company “is an attack on Quebec.”
Still, Sanchez emphasizes that “the element which complicates the SNC-Lavalin case is that it is serial corruption, not market forces or downturn in the economy, that has put the company in a bad place.”
As to what the Quebec and federal governments should do if SNC-Lavalin’s very survival were to be in jeopardy, Sanchez admits it is difficult and complicated, but proposes that there could be a creative, win-win solution.
“I am concerned that the repeated charges of major corruption at SNC indicate a deep-held corporate culture issue and not just some bad apples. I think the government has to keep this in mind in whatever remedies or arrangement it considers to save the company,” she says.
She adds that despite the too-big-to-fail argument it would be “irresponsible” for any government to “invest taxpayers’ money in a firm that has such a bleak record.”
Having firmly drawn that line in the sand, the NDP candidate muses that “there might be an opportunity for thinking creatively about how to preserve some of the strong aspects of this company under a new arrangement that would root out corrupt practices.”
The SNC-Lavalin case, in Sanchez’s view, could call for governments “to innovate with more cooperative and collaborative models of ownership and management, where accountability is associated with good behaviour and where the bottom line is not solely focused on profits.”
It is a tantalizing suggestion, but it is not clear what Sanchez means by “cooperative and collaborative models of ownership.”
She seems to be implying a solution that would entail government takeover, but not necessarily traditional nationalization. The model might be a combination of social enterprise and a cooperative or, at least, partly employee-owned corporation.
It is important to note that the Quebec government-owned Caisse de depot et placement, the entity that invests Quebec pension-plan money, holds a major equity position in SNC-Lavalin. In other words, the road to some form of public ownership of the company is already partly paved.
And so, what Sanchez proposes sounds promising, but needs a good deal more meat on the bones. In the SNC-Lavalin case, it is time for all political actors to start thinking creatively, and outside the orthodox, private-enterprise box.
The NDP’s candidate in Outremont has at least made a start at that effort.
Karl Nerenberg has been a journalist and filmmaker for more than 25 years. He is rabble’s politics reporter.
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