Repeal the Deferred Prosecution Agreements hidden in the 2018 Budget Bill; Save jobs, curb corporate power

Central Executive Committee, Communist Party of Canada, March 1, 2019


The terrible truth in the SNC Lavalin scandal is that both Liberal and Tory governments have bent to the will of the biggest corporations since Canadian capitalists first created these parties to look after their corporate class interests more than a century ago.  They’ve tried hard to hide that fact from the public – but every now and then the truth is exposed.  


Such is the case with SNC Lavalin and the Deferred Prosecution Agreements that came into effect September 10th, 2018, just days ahead of the criminal prosecution of SNC Lavalin for corruption and bribery by federal prosecutors.


SNC Lavalin has a long and ugly history of bribery and corruption, around the world and in Canada.  It’s criminal activities in India, Bangladesh, Cambodia, Libya and elsewhere in the 168 countries where it has contracts and the 51 countries where it has offices, caused the World Bank to ban SNC Lavalin and its 100 subsidiaries from bidding on World Bank contracts for 10 years. 


In Canada, SNC Lavalin was involved in making a covert payment of $2.3 million to secure a contract worth $127 million to build the Jacques Cartier bridge, for which the recipient of the bribe eventually went to jail.  SNC Lavalin was also at the centre of the biggest fraud in Canadian history – a $1.3 billion contract for the McGill University Healthcare Centre, which led to minor jail sentences for some executives and a telling-off for the then-CEO.  


SNC Lavalin also developed a scheme to deliver large and illegal political donations totaling $118,000 to both federal Liberal and Conservative parties between 2004 and 2011, with Normand Morin – a former vice-president of SNC Lavalin paying a $2,000 fine after the company was found guilty of breaching election laws by Elections Canada.  Others who were found guilty were given immunity from prosecution. 


SNC Lavalin was also found out by the Charbonneau Inquiry in Quebec to have made illegal contributions of close to $1 million between 1998 and 2010 divided almost equally between the Quebec Liberals and Parti Quebecois. 


SNC Lavalin has a long and well-documented history of corruption, bribery and criminal activities in Canada and around the world.  This was undoubtedly a major factor in the decision of Justice Department prosecutors – supported by the Attorney General Jody Wilson Raybould – to proceed with the criminal prosecution of SNC Lavalin on charges of corruption and $48 million in bribes, resulting in the theft of $130 million by SNC Lavalin from various organizations in Libya.  


While prosecutors in Canada prepared their well-documented case against SNC Lavalin, the corporations’ Executives and lobbyists went to work to get the federal government to amend the  Criminal Code by legislating Deferred Prosecution Agreements which act to derail criminal prosecutions of large national and transnational corporations like SNC Lavalin.  DPAs  have been adopted in the US and UK, and are being pushed in Australia and New Zealand – the Five Eyes countries – including Canada.


The history of DPAs in the US and the UK is instructive, and was very likely considered by Canadian prosecutors in their decision not to enter into a DPA with SNC Lavalin.  As reported in the New York Times, 51 banks in the US and UK entered into DPA agreements over a 15-year period, and had to enter into similar agreements again after they had violated the same laws that had led to the earlier agreements.  This is clear evidence that the British and American banks regarded the DPA’s and the fines that were levied in lieu of prosecution as simply a cost of doing business.  A damning indictment of Deferred Prosecution Agreements, and of the Liberal government which legislated them into Canadian criminal law anyway.


In the 20 months between February 2016 and September 2018, SNC Lavalin logged more than 80 recorded meetings with top government officials including the PMO, the Privy Council, Export Development Canada, Global Develop and Innovation, Public Services and Procurement Canada, Public Treasury Board, Natural Resources and Environment, and Public Safety, lobbying the government to introduce Deferred Prosecution Agreements in Canada, and to do it before the prosecution of SNC Lavalin would start in September 2018. 


In response, DPA legislation was included on page 200 of the Liberals’ February 2018 Budget Bill, passed into law in June, and came into effect September 10, 2018.  During this time SNC Lavalin made major efforts to get federal prosecutors to cut them a deal under a Deferred Prosecution Agreement, abandon a criminal prosecution of their well-documented and extensive crimes, and avoid the 10 year ban on bidding on

government contracts that was a certain consequence.      

September was the beginning of the orchestrated campaign by the Prime Minister, his staff, Cabinet and the Clerk of the Privy Council to force Wilson-Raybould to order federal prosecutors to abandon their criminal prosecution case and instead cut a deal with SNC Lavalin using a Deferred Prosecution Agreement.  To her credit, the Attorney General stuck to her guns and refused to bend to the heavy pressure exerted.


In mid-October SNC Lavalin announced it would legally challenge the prosecutor’s decision to prosecute, and the pressure on the Attorney General to stop the prosecution grew more and more intense as Jody Wilson-Raybould testified to the Justice Committee February 27th. 


In mid December, SNC Lavalin announced that “ongoing legal challenges” threatened the jobs of 9,000 SNC employees in Canada, half of them resident in Quebec.  This was in fact a double barreled threat, directed at SNC Lavalin employees and their families in the first place, and at the federal Liberals who expect to win the next federal election with big gains and new seats in Quebec.    


The threat clearly registered, and in early January Attorney General Jody Wilson-Raybould – the lone hold-out – was removed as Attorney General.


On March 1st, the Toronto Star quoted Public Services and Procurement Minister Carla Qualtrough as stating:  “My understanding is when criminal proceedings are ongoing that that option (a Deferred Prosecution Agreement) is always available.”


These events clearly show that the federal government was doing everything in its power to aid SNC Lavalin in its efforts to avoid a criminal prosecution for its well-documented crimes, made even more convincing by its long record of criminal convictions for corruption and bribery in countries – including Canada – around the world.


It would be a mistake for Canadians to conclude that the crimes committed here were only by this federal government or this Prime Minister.  In fact both Liberal and Conservative governments have been involved in illegal activities in the past, including the Airbus affair of the Mulroney Tory government, and the Sponsorship scandal of the Paul Martin Liberals.


In fact this is a crime that’s systemic to capitalism and neo-liberalism.  The intent, and the consequences – are to enable corporations to be more powerful than sovereign states, national governments and national and international laws.  It allows corporations to ride roughshod over all of these, and to do it with impunity.  That’s what these events have demonstrated to Canadians and to the world.


In the long run, the solution is socialism and the elimination of trans-national corporations and their insatiable greed for more and more profits.  

In the short run, the solution is to curb corporate power by prosecuting SNC Lavalin and other such corporations to the full extent of the law; to repeal the Deferred Prosecution Agreements and to toughen the laws governing large national and trans-national corporations operating in Canada, including plant closure legislation with teeth which would force corporations to show just cause before public tribunals with the power to stop closures and jail corporate CEOs and executives for cause.  SNC Lavalin, like General Motors, must be legally prohibited from closing their Canadian operations and throwing thousands onto the unemployment roles, simply because they can. 


Further, continental corporate deals like NAFTA and the USMCA should be torn up as they clearly and negatively impact on Canada’s sovereignty and independence, and on the ability of Canadian governments to stand up to the TNC’s in the interests of the 99% who live and work in Canada.


The Communist Party of Canada makes these demands in the interests of working people across the country who are the first victims of the SNC Lavalin affair and of the government’s capitulation to this  corporation’s threats and diktat.  If the Liberals and Tories will not stand up for the people of Canada, they should get out of the way and make room for a new government that will.


(The above article is from the March 16-31, 2019, issue of People's Voice, Canada's leading socialist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)