What's at stake for RCMP, prosecutors in the SNC-Lavalin case
Zero convictions despite 7 years and millions spent on SNC investigation, prosecution
The political storm over SNC-Lavalin has sparked important debate over alleged political interference in Canada's justice system and what to do about a huge Canadian company that could fail if convicted of foreign bribery.
As early as Tuesday, Canadians could hear directly from Jody Wilson-Raybould on whether she was inappropriately pressured as attorney general to intervene in the SNC-Lavalin prosecution.
But beyond the political scandal, consider the failures of the RCMP and federal prosecutors in the case. Since 2012, the RCMP have charged eight people tied to allegations SNC engaged in bribery of foreign officials. Seven of those accused have had their cases tossed out of court due to delays or problems with evidence. RCMP and the Public Prosecution Service of Canada have yet to convict anyone from the company.
Many are asking whether they are really up to the job.
"Canada has a very poor record of enforcement," says James Cohen, head of the watchdog group Transparency International Canada. "Canadian companies who engage in corruption have sadly been playing the odds that they will not get caught."
The RCMP and PPSC's umbrella case against the company itself, SNC-Lavalin Group Inc and its subsidiaries, could be prosecutors' last hope.
To put it bluntly they desperately need a win.
Bribing a dictator
SNC-Lavalin's troubles began in 2011, and unravelled like a spy novel.
The company, whose top construction executive for years paid bribes in Libya to win billions in contracts, moved out of the country temporarily when its patron, dictator Moammar Gadhafi, was ousted and killed.
One month later, as Libya burned, authorities in Mexico arrested a group of alleged plotters accused of trying to smuggle one of Gadhafi's sons to a life in hiding. Among those detained but released was an SNC money man, Stphane Roy.
A month after that, a senior SNC-Lavalin employee invited a CBC reporter to a remote ski hill in Quebec. He whispered news of an internal revolt at SNC-Lavalin over allegations the top construction exec for years paid bribes and laundered money for the Gadhafi regime through Swiss banks, all to keep contracts flowing to SNC-Lavalin.
Those stories made headlines, sparked firings, police investigations, and eventually criminal charges.
In April 2012, that executive, Riadh Ben Assa, was arrested in Switzerland where he was held for two and a half years. He pleaded guilty in Switzerland to bribery and laundering millions to win SNC-Lavalin contracts in Libya.
'We've done nothing wrong'
The company has long maintained that any bribes or kickbacks were the work of rogue employees.
The company's latest CEO Neil Bruce told investors on Friday the company will vigorously defend itself against the charge its international construction arm paid bribes.
"We've done nothing wrong as a company and none of our current employees have done anything wrong," Bruce said.
To date, the only conviction of anyone at SNC-Lavalin related to foreign bribery was the guilty plea from Ben Assa secured by Switzerland.
In Canada, so far every single charge the RCMP has laid has either not stuck or not yet been to trial.
This month, a charge of obstruction of justice was thrown out against Sami Bebawi due to court delays.
Bebawi was SNC-Lavalin's top construction executive in the years before Riadh Ben Assa. RCMP charged Bebawi in 2014, accusing him of sending a lawyer to visit Ben Assa in a Swiss prison to offer $10 million if he covered up Bebawi's involvement in Libya. What Bebawi didn't know is that he'd walked into a sting operation. Ben Assa has become a vital co-operating witness for the RCMP.
Bebawi still awaits trial in Montreal on fraud and bribery charges tied to SNC-Lavalin's Libya operations..
Roy, the SNC-Lavalin money man detained briefly in Mexico in 2011, also walked out of court free this month.As vice-president of finance under Ben Assa, Roy was charged with fraud and bribery tied to Libya. But last week a judge tossed all charges due to "unreasonable" delays by the prosecution.
Bangladesh boondoggle
The RCMP and PPSC suffered similar defeats in its case against employees of SNC-Lavalin International in Bangladesh over the company's failed bid to win a $1.3-billion contract to build the Padma Bridge.
The World Bank eventually debarred SNC-Lavalin from bidding on projects for 10 years.
However, Canada's prosecution of five people over the Bangladesh bridge project, including a low level engineer and two executives, eventually failed.
Watch:SNC and a bridge for Bangladesh
Charges were dropped against engineer Mohammad Ismail who became a witness, turning over evidence of a widespread system of secret payments used by the SNC-Lavalin division.
The four others were acquitted, after a judge ruled that RCMP wiretap evidence collected by bugging an executive's office was inadmissible.
Complex investigations, changing priorities
Canada has a sparse record of convicting anyone in foreign bribery cases.
To date, the RCMP and PPSC have only ever secured six convictions under the Corruption of Foreign Public Officials Act since its adoption two decades ago.
The RCMP superintendent who led these international investigations says those convictions nonetheless sent a message to corporate Canada.
"The early cases in Canada which resulted in fines to corporations led to compliance regimes being established country-wide by Canadian firms operating globally," says Biagio Carrese, a 29-year veteran anti-money laundering investigator with the RCMP.
Notably, he says, the three-year prison term handed down to Nazir Karagar of CryptoMetrics Canada for attempting to bribe government officials in India put Canadian executives on notice.
"The impact was immediate. It set a precedent," said Carrese, who has left the RCMP and now works in the private sector.
He declined to comment on the SNC-Lavalin case, but acknowledges foreign bribery cases can fail or struggle due to their international scope, legal and technical complexity, and the need for an intense amount of time, resources and special expertise.
RCMP's National Division had 115 dedicated investigators by 2013. A year later, after the Parliament Hill shootings, and the rise of homegrown ISIS sympathizers, many investigators were reassigned to anti-terrorism, depleting resources in the fight against foreign bribery.
"In a world of ever-changing priorities, this can be difficult. I believe this to be true of police and prosecutors," Carrese said.
Watch: SNC-Lavalin affair unfolds in front of the Justice Committee
Transparency International, in its 2018 report Exporting Corruption, noted a recent deterioration in enforcement in Canada, noting no new major cases launched in recent years.
Convictions in Canada
While no SNC-Lavalin employee has been convicted of foreign bribery, the company has faced humiliating headlines over corruption here at home.
Sret du Qubec and provincial prosecutors won convictions against former CEO Pierre Duhaime and his executive vice-president of construction Ben Assa over bribes paid to win the $1.3-billion contract to build the McGill University Health Centre (MUHC) superhospital.
RCMP is also still investigating SNC-Lavalin over $2.3 million in kickbacks paid to the head of the Federal Bridge Corp. Appointee Michel Fournier (former chief of staff to Jean Chrtien) is serving a five-and-a-half year prison term for accepting payments to Swiss bank accounts coded named "Zorro" while doling out bridge contracts.
Today, as politicians and the public debate the fate of SNC-Lavalin, and whether it ought to be offered an out of court deal to resolve the foreign bribery case, the police and prosecutors who toiled for years no doubt have a thirst to see their work put before the courts.
Beyond the law, the politics, the potential impact on this giant company our public guardians have spent untold millions building a caseand to date have little to show for it.
Corrections
- The original version of this story stated prosecutors have secured four convictions since Canada adopted foreign bribery laws 20 years ago. Since publication, the RCMP issued a news release announcing a court decision in January 2019 that convicted two additional executives, bringing the total number of convictions under the law to six.Feb 27, 2019 4:10 PM ET
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