Canada Letter: The Strange Story Behind the SNC-Lavalin Affair

The Times’s recent Canada-related coverage with back stories and analysis from our reporters along with opinions from our readers. View in [Browser]( | Add nytdirect@nytimes.com to your address book. [The New York Times]( [The New York Times]( Saturday, February 16, 2019 [NYTimes.com/Canada »]( [The Strange Story Behind the SNC-Lavalin Affair]( By IAN AUSTEN Seven years ago, Elisabeth Malkin, my colleague in Mexico City, and I worked on one of the [strangest stories of my career](. It involved a consultant from Mount Forest, Ontario, with no previous experience in the Middle East being sent by construction and engineering firm SNC-Lavalin to assess the turmoil in Libya that eventually led to the overthrow of its dictator, Col. Muammar el-Qaddafi. [Prime Minister Justin Trudeau last month with Jody Wilson-Raybould, who quit his cabinet this week.] Prime Minister Justin Trudeau last month with Jody Wilson-Raybould, who quit his cabinet this week. Patrick Doyle/Reuters For $100,000, the consultant, Cynthia Vanier, wrote a five-page report condemning the NATO-led bombing campaign against Colonel Qaddafi’s forces. She wound up in a Mexican jail, charged with trying to smuggle the dictator’s son into that country, and [remained there for 18 months](. It was among a series of episodes that exposed widespread corruption at SNC-Lavalin, led to the firing of its top executives (several of whom were arrested) and raised questions about the survival of the company. Now, of course, SNC-Lavalin’s time with the Qaddafi family is at the heart of a political mess confronting Prime Minister Justin Trudeau just eight months before a federal election. [Want the Canada Letter in your inbox every week? [Sign up here]( It began over a week ago when The Globe and Mail, [citing anonymous sources]( (subscribers only), reported that when Jody Wilson-Raybould was justice minister, Mr. Trudeau or his aides pressured her to cut a deal that would allow SNC-Lavalin to escape a criminal conviction for bribery in Libya. That was followed this week by the announcement of an [investigation by Parliament’s ethics commissioner]( into Mr. Trudeau’s actions. Then came [the abrupt resignation]( of Ms. Wilson-Raybould from Mr. Trudeau’s cabinet. Let’s step back for a quick overview of SNC-Lavalin’s troubled history, and where Trudeau’s current problem may lead: •What is SNC-Lavalin? SNC-Lavalin was formed in 1991 from two Montreal-based companies. It has 52,000 employees in over 160 countries and reported revenue of 9.3 billion Canadian dollars in 2017. Like Bombardier, SNC-Lavalin’s international success remains a source of pride in Quebec, despite the latter’s issues with corruption, and it employs thousands of people there. [SNC-Lavalin is a source of pride for many Quebecers.] SNC-Lavalin is a source of pride for many Quebecers. Christinne Muschi/Reuters •What did it do? The current controversy comes from [charges laid by the police]( four years ago. They accuse the company of paying 47.7 million Canadian dollars in bribes to officials in Libya to win contracts there, and of defrauding the Libyan government and its agencies of 129.8 million Canadian dollars. But that’s not all. In 2013, the World Bank banned SNC-Lavalin from bidding on contracts for a decade to settle a corruption inquiry into its activities in Bangladesh. An Indian government investigation showed that the company paid bribes there where it built a major hydroelectric dam. Back home, Pierre Duhaime, SNC-Lavalin’s former chief executive, pleaded guilty this month to charges related to [tens of millions of dollars in bribes]( the company paid to secure the contract to build a hospital complex in Montreal. A public official has pleaded guilty to taking bribes from SNC-Lavalin that landed it the contract to renovate the landmark Jacques-Cartier bridge in Montreal. •What’s at stake? If convicted in the Libya case, SNC-Lavalin will be banned from federal government contracts for a decade. Such work is a major part of SNC-Lavalin’s business. Without it, the company could be financially crippled or vulnerable to a takeover by a foreign competitor. •How has it responded? Publicly, the company’s new management claims all bribery and all other forms of lawbreaking are in its past. Privately, it has heavily lobbied politicians at all levels of government and in all parties. The company was looking for changes to criminal law that would allow it to dodge a conviction by paying a large fine and proving that it now has clean hands — the United States and Britain have similar “remediation agreements.” While it made no link, the Trudeau government introduced just such a change to the Criminal Code last March, burying it in the hundreds of pages of the federal budget bill. [SNC-Lavalin has been actively pushing for a way to avoid a criminal conviction in a corruption and bribery case.] SNC-Lavalin has been actively pushing for a way to avoid a criminal conviction in a corruption and bribery case. Christinne Muschi/Reuters •What are the allegations against Mr. Trudeau? According to The Globe and Mail, his office improperly pushed Ms. Wilson-Raybould to get federal prosecutors to drop the criminal case and use the new settlement system. The prosecution service is supposed to do its work free of the influence of politicians. Justice ministers in Canada, in their dual role as attorney general, can give prosecutors orders. But that’s only supposed to happen in exceptional cases and the law requires the government to make those orders public through an official notice. In the end, however, nothing happened. SNC-Lavalin is still heading to court. •What’s next? Mr. Trudeau has repeatedly acknowledged that the issue was discussed with his former minister. But he has also insisted that neither he nor his office pressured Ms. Wilson-Raybould, who has yet to give her side of the story, citing solicitor-client privilege. Whatever turns the political storm takes, John W. Boscariol, a lawyer in Toronto who advises companies on corruption issues, told me this week that the outcome is unlikely to please SNC-Lavalin. “Now that it’s exploded, it’s going to be difficult for any company to get a remediation agreement,” he said. Dial In On Feb. 24 we’re holding a special conference call for Canadian and Australian readers with David Sanger, national security correspondent for The Times. He’ll be focusing on the pressure the United States is bringing on Canada and other countries to not use equipment from China’s Huawei when they upgrade their wireless networks. You can find all the details and register [here](. ADVERTISEMENT Trans Canada [Trudeau’s Commitment to Indigenous Groups Tested by Minister’s Resignation]( The loss of Jody Wilson-Raybould from his cabinet may prove to be a step backward in Prime Minister Justin Trudeau’s attempts at reconciliation with Indigenous people. [A Moral Leader ... and Boring? Canadians Respond]( In Opinion, columnist Nicholas Kristof recently praised Canada as a model for the world but also said that we’re “boring.” Some Canadian readers get the last word. [Clean, On Time and Rat-Free: 9 International Transit Systems With Lessons for New York]( A reader from Vancouver describes his city’s transit system in a global comparison with New York. [An Amateur’s Hour]( Jack Ming Jie Lin, a native of Markham, Ontario, and now a student at Columbia University in New York, has some things on his mind in addition to his studies. He has a rare opportunity as an amateur tennis player to test himself against the pros. [Barely Drawing a Whisper Where Hockey Is the Talk of the Town]( Hockey fans in Toronto who are discouraged by the cost and scarcity of Leafs tickets might want to to check out the Toronto Furies of the Canadian Women’s Hockey League. Around The Times [52 Books for 52 Places]( Sebastian Modak, Our 52 Places Traveler, is on the move and one of his first stops was the ice caves near Sault Ste. Marie, Ontario. Our colleagues in Books have put together a list of books for each of his stops. Their Canadian selections are not obvious but clever. [You Don’t Need a Recipe]( As The Times’s food editor, Sam Sifton comes up with a lot of terrific recipes. But he has also been on a campaign to get us cooking without glancing at a tablet or a grubby printout. Sam’s non-recipe recipes have now been collected. [The Secret History of Women in Coding]( Before computers were machines they were people, more often than not women, who performed calculations. When those tasks were mechanized, women often programmed the machines. Then, somehow, men took over. Clive Thompson looks at what went wrong. HOW ARE WE DOING? We’re eager to have your thoughts about this newsletter and events in Canada in general. Please send them to [nytcanada@nytimes.com](mailto:nytcanada@nytimes.com? subject=Canada%20Letter%20Newsletter%20Feedback). LIKE THIS EMAIL? Forward it to your friends, and let them know they can sign up [here](. 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