Opinion-Policy Nexus

How is this ugly SNC-Lavalin affair going to end for Justin Trudeau’s Liberals?

In a word, badly.

It is bad enough already and will only get worse before it gets better – if it does. It has already cost the prime minister a highly prized cabinet minister, Jody Wilson-Raybould, his former minister of justice and attorney general. On Monday, it cost him his principal secretary, Gerald Butts, one of his closest personal friends.

Every scandal demands a scapegoat, or so it seems. In the sponsorship scandal, it was Jean Chrétien’s chief of staff, Jean Pelletier. In the Mike Duffy/Senate expenses scandal, it was Nigel Wright, Stephen Harper’s chief of staff, who went under the bus. Now it is Butts, who met with Wilson-Raybould but, he insists, did not attempt to pressure her in any way.

The SNC/JWR/Butts affair, as it might be labelled, has also cost Trudeau dearly in credibility as some of his core commitments – to transparency in government, to reconciliation with Indigenous Canadians, to the rule of law in the political cauldron of Ottawa, and even to gender equality – are now in question.

To add pain to his plight, he is being lashed daily in the Commons by Conservative leader Andrew Scheer, who sees SNC-Lavalin as his lucky lottery ticket to 24 Sussex Drive in October.

It did not have to unfold this way, and it would not have, if the prime minister and his key advisers had confronted the SNC-Lavalin issue six months ago – before Kathleen Roussel, the director of public prosecutions in  the Justice Department, decided to launch a criminal prosecution against the giant engineering and construction firm for alleged fraud and bribery in  Libya in the days of Muammar Gaddafi.

A bit of background. Over the last two decades or so, a relatively new “global ethic” has gradually emerged among developed countries – a belief that when their corporations do business internationally, they should be bound by the same ethical standards that they are legally required to observe at home. In other words, if they cannot pay bribes to secure contracts at home, they must not be allowed to pay them abroad.

Canada signed on to this international movement to combat white collar crime in 1998 when Parliament passed the “Corruption of Foreign Public Officials Act.” Nothing much happened for more than a decade, despite occasional exposés of “success fees” – the polite term for bribes – being paid abroad by SNC-Lavalin and another Canadian company, Bombardier Inc.

It was not until last year that the success fees paid by SNC-Lavalin to public officials in Libya became a matter for possible criminal prosecution of the company and its officers – the first application of the 1998 act. A conviction could have meant jail time for some of the company’s present or former officers. More seriously, it would have meant that SNC would be banned from bidding on public sector contracts on Canada for 10 years. Given that the company, which has 50,000 employees world-wide, was already barred from receiving contracts awarded by the World Bank, a ban in Canada could have a devastating effect, perhaps causing collapse or forced sale to foreign interests.

The Trudeau government had to be aware of the stakes. It knew there was a perfectly legal alternative to criminal prosecution – one that would punish the company while enabling it to survive. As mentioned in last week’s column, the alternative was a negotiated settlement, or deferred prosecution agreement (DPA). DPAs are used in other countries, including the United and Britain.

The government knew it had this option because it had inserted a DPA provision into the law last year, just as the case against SNC was coming to the boil.

But it waited too long. Once the director of public prosecutions had decided that criminal charges were the route to go, it would have taken a written, and very public, order from the attorney general to change the route. Jody Wilson-Raybould was not prepared to issue what would have amounted to a vote of non-confidence in Kathleen Roussel by directing her to negotiate a settlement.

Yet that is where this controversy will have to go in the end. The Commons justice committee hearings will generate more bluster than light. The ethics commissioner will take forever to make his inquiries, patiently, gingerly, and privately.

In the end, David Lametti, the new attorney general, will order the director of public prosecutions to negotiate a settlement. And the Liberals will look worse than ever.

Posted

Tuesday, February 19, 2019 - 10:50

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