Briefing

SNC-Lavalin and Trudeau

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A report in The Globe and Mail this morning is alleging that the Office of the Prime Minister (PMO) attempted to press former justice minister Jody Wilson-Raybould to stop prosecuting Montreal-based SNC-Lavalin Group on fraud and corruption charges.

When asked at a press conference this morning in Vaughan, Ont., Prime Minister Justin Trudeau said the story was false, and that his office didn’t “direct” Wilson-Raybould to cease prosecution, but did not say whether it tried to influence her, which is what The Globe is alleging. (Globe and Mail)

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Backstory:

In 2015, RCMP prosecutors alleged that SNC paid millions of dollars in bribes to public officials in Libya between 2001 and 2011 to secure government contracts. The engineering company said culpable executives have left the company, and it has since reformed ethics and compliance rules.

What’s at stake in one word: Jobs

Montreal-based SNC-Lavalin had 8,762 employees across Canada as of Jan. 8, 2018, according to its website. The company employs 40,000 people in 50 countries.  

The Trudeau government amended the Criminal Code in 2018 to allow prosecutors to suspend criminal charges against Canadian companies found to have committed wrongdoing.

From The Globe:

Liberal insiders said Ms. Wilson-Raybould knew this legislative change was meant to help SNC-Lavalin out of the legal troubles that were weighing on the price of its shares. A conviction on the fraud and corruption charges could result in a 10-year ban from federal government contracts – a development that would lead to layoffs.

Sources at SNC told The Globe that the PMO was furious with the justice minister’s intransigence on the remediation agreement, and that the company was pleased to see her moved out of the portfolio.

“That is between me and the government as the government’s previous lawyer,” Wilson-Raybould told The Globe when asked whether the PMO pressured her.

Why leak to The Globe now? In one chart:

Google

Less than a week ago, SNC’s stock plummeted the most it has in at least 27 years after warning that it would miss profit targets, wiping $2.4 billion in market value.

Late 2018, SNC CEO Neil Bruce told BNN Bloomberg Television that the lack of a deal with Canada probably cost the company more than $5 billion in lost revenue, and continued to damage its reputation internationally.

SNC-Lavalin and Ottawa

  • In 2016, the federal Liberals and Conservatives were forced to repay illegal donations from SNC-Lavalin. The Liberals had received $109,615; the Conservatives had gotten $8,187. The company admitted wrongdoing, but avoided federal charges by entering into a compliance agreement with Elections Canada.
  • SNC-Lavalin has received 1,362 federal government contracts worth about $1.3 billion since 2011, according to the government’s own data. Most recently, the company was awarded a $7-million contract on Dec. 21, 2018.

Who to watch

Kevin Lynch could play the role of peacemaker. The former chief officer of the Privy Council now chairs the SNC-Lavalin board.