OTTAWA — SNC-Lavalin, facing a 10-year ban from federal business over corruption charges, urged the Liberal government in 2017 to water down the penalty scheme for corporate misconduct to the point a guilty company could completely dodge a ban on receiving public contracts.
In essence, the engineering and construction giant recommended the Liberals leave wiggle room for a "zero debarment" time period under the government's integrity regime.
The regime's current rules disqualify offenders from receiving federal contracts for a decade, though in certain cases the period can be trimmed down to five years.
The request was part of SNC-Lavalin's submission to public consultations that explored the merits of changing Ottawa's tools to deter and punish unethical corporate behaviour. The document was obtained by The Canadian Press under the Access to Information Act.
A forthcoming proposal to update the integrity regime — which Public Services Minister Carla Qualtrough has said will be finalized in about a month — might have major consequences for SNC-Lavalin. It could help the embattled firm avoid a lengthy, economically punishing ban on federal contracts.
The Montreal-based company finds itself at the centre of a national political storm amid allegations prime ministerial aides leaned on former attorney general Jody Wilson-Raybould to help the engineering firm avoid criminal prosecution.
The company was charged in 2015 with corruption and fraud over allegations it resorted to bribery while pursuing business in Libya.
Wilson-Raybould recently told the House of Commons justice committee she came under relentless pressure from the Prime Minister's Office and other federal officials to ensure the company was invited to negotiate a remediation agreement, a sort of plea bargain that could allow it to continue doing business with the government.
Prime Minister Justin Trudeau and his former principal secretary, Gerald Butts, have disputed the notion any inappropriate arm-twisting of Wilson-Raybould took place.
Following public consultations in 2017, the Liberal government ushered in legislation last year to establish the remediation agreement regime.
SNC-Lavalin lobbied the government for the creation of a remediation agreement tool — but the federal director of public prosecutions ruled late last year that its case was ill-suited for such an agreement. Wilson-Raybould agreed with the director's decision and declined to overturn it, though she had the power to do so.
However, the company could still escape severe punishment through an update to the integrity regime, which is aimed at fostering ethical business practices by shunning companies guilty of offences such as bid-rigging, bribery, fraud and money-laundering.
The Liberal government came forward with a proposed new scheme last fall that includes no minimum ineligibility period.
The proposal, which triggered another round of public consultations, was intended to take effect in early 2019, but the government has not yet indicated whether or when it will proceed.
Qualtrough, the minister in charge of federal procurement, told a Commons committee last week the government wants more flexibility in the regime for dealing with companies that have integrity problems.
The 2017 consultations canvassed opinions about the overall federal integrity regime, including input on the sanctions that can prohibit a company from receiving government contracts — a process known as debarment.
In a written submission to the government consultation, SNC-Lavalin called on Ottawa to align its ineligibility guidelines with those of the United States, where an organization could be excluded from bidding on procurement contracts for up to three years, with the possibility of extension.
"This also means that discretion allows for a zero debarment time period," said the October 2017 submission.
SNC-Lavalin argued the current penalties were "sufficiently draconian" to discourage a company from disclosing wrongdoing by rogue employees. It said there should be "little or no consequence" for a firm that condemns bad conduct promptly and punishes the employees in question.
"When it comes to fostering a culture of good ethics in business, as the saying goes: 'One good sacking is worth a thousand memos.'"
In sum, the company said the integrity rules should not result in punishment of companies that have "legitimately disavowed their employee's misconduct in ways that make it clear the company itself had no criminal intent to commit the misconduct."
A federal summary of the integrity regime consultation indicates SNC-Lavalin was not alone in its views about the penalties, saying most participants felt the existing disqualification period was too long. "The principal view was to favour full discretion in the determination of a period of ineligibility, including the ability to reduce the period to zero," the summary says.
A timeline of the SNC-Lavalin affair
OTTAWA — A chronology of the SNC-Lavalin controversy, according to public documents, reports and testimony to the House of Commons justice committee:
Feb. 19, 2015 - The RCMP lays corruption and fraud charges against Montreal-based engineering and construction firm SNC-Lavalin, over business dealings in Libya. SNC-Lavalin says the charges are without merit and the allegations linked to people no longer with the company. A conviction could bar the company from bidding on federal contracts.
Oct. 19 - The Liberals win a federal election. Two weeks later, Prime Minister Justin Trudeau names Jody Wilson-Raybould minister of justice and attorney general of Canada. She is the first Indigenous person to hold the post.
March 27, 2018 - The Liberals table a budget bill allowing for "remediation agreements," plea-bargain-like deals for corporations to avoid criminal proceedings by making reparations for bad behaviour. SNC-Lavalin had lobbied for such a provision in Canadian law.
Sept. 4 - The Public Prosecution Service rejects SNC-Lavalin's request to negotiate a remediation agreement. Wilson-Raybould is told about the decision. No public announcement is made.
Sept. 6 - According to Wilson-Raybould's testimony, Finance Minister Bill Morneau's chief of staff, Ben Chin, warns his counterpart in Wilson-Raybould's office, Jessica Prince, of job losses during a Quebec provincial election absent a deal for SNC-Lavalin.
Sept. 8 - Justice Department deputy minister Nathalie Drouin provides Wilson-Raybould with a briefing note on the attorney general's powers on remediation agreements.
Sept. 16 - According to Wilson-Raybould's testimony, officials in the PMO call Prince. They say the Crown prosecutor wants to negotiate an agreement, unlike the director of prosecutions, and suggest a solution before the company's board meets in four days.
Sept. 17 - According to Wilson-Raybould's testimony, Trudeau asks Wilson-Raybould to "find a solution" for SNC-Lavalin to avoid job losses, talks about the Quebec election and notes that he is a Quebec MP.
"Are you politically interfering with my role, my decision as the attorney general? I would strongly advise against it," Wilson-Raybould says, according to her justice committee testimony. Trudeau says, "No. We just need to find a solution."
Wernick raises the election as well, but he later testifies that he did so to highlight the long-standing convention for the federal government to stay out of provincial campaigns.
Sept. 21 - The remediation-agreement provisions come into force.
Oct. 9 - The prosecution service confirms it will not negotiate an agreement with SNC-Lavalin. The company challenges the decision in Federal Court.
Oct. 15 - According to Wernick's testimony, he takes a call from Kevin Lynch, the chairman of the board of SNC-Lavalin and a former clerk of the Privy Council. Lynch asks about a remediation agreement and what can be done. He tells Lynch the company's lawyers will have to deal with the prosecutor.
Oct. 26 - According to Wilson-Raybould's testimony, official Mathieu Bouchard muses to Prince about getting outside legal advice on a deal for SNC-Lavalin. Wilson-Raybould later recounts that Bouchard brings up the need for the Liberals to get re-elected in 2019.
Dec. 5 - Wilson-Raybould and Gerry Butts, Trudeau's principal secretary, meet for dinner at the Chateau Laurier. SNC-Lavalin is discussed, but the two later give differing accounts of the tone of the conversation.
Dec. 18 - Prince meets with Butts and Katie Telford, Trudeau's chief of staff. Afterwards, Prince texts Wilson-Raybould, citing Butts as saying, "there is no solution here that does not involve some interference" after being told what is being proposed is political interference in a prosecution. She cites Telford as saying "we don't want to debate legalities anymore."
Butts later tells the justice committee that he didn't — or wouldn't — have used the word "solution" and denies anything nefarious in his comments. The point of the meeting, and anything said, was about getting a second opinion from someone like a former Supreme Court justice because the law had never been applied before.
Dec. 19 - According to Wilson-Raybould, Wernick warns her she is on a collision course with the prime minister and Trudeau wants to get a deal done. Wernick later testifies that he doesn't recall saying that.
Jan. 7, 2019 - Trudeau tells Wilson-Raybould she is being shuffled out of the justice portfolio. Wilson-Raybould says the PMO denies the move is over the SNC-Lavalin file.
Jan. 14 - Trudeau shuffles his cabinet. David Lametti, a Montreal MP and former law professor, becomes justice minister. Jane Philpott becomes Treasury Board president. Wilson-Raybould becomes veterans-affairs minister.
Feb. 7 - Citing unnamed sources, the Globe and Mail newspaper reports that Trudeau's aides pressed Wilson-Raybould to intervene in the SNC-Lavalin case. Trudeau calls the allegations false.
Feb. 11 - Trudeau says Wilson-Raybould's continued presence in his cabinet speaks for itself and that he told her any decision on SNC-Lavalin was hers alone. Meanwhile, ethics commissioner Mario Dion launches an investigation.
Feb. 12 - Wilson-Raybould resigns from cabinet. Trudeau says she had a duty to tell him about any undue pressure applied to her in her role as attorney general.
Feb. 13 - The House of Commons justice committee debates its own probe. Liberals use their majority to push for a narrow hearing that doesn't include Wilson-Raybould. The Liberals call it a first step in a cautious investigation. The opposition calls it a coverup.
Feb. 15 - Trudeau says Wilson-Raybould asked him in September whether he would direct her on SNC-Lavalin. He says he told her he would not.
Feb. 18 - Butts resigns. He denies any impropriety but says his presence in the PMO has become a distraction.
Feb. 19 - Wilson-Raybould stuns observers by addressing a cabinet meeting. Cabinet confidentiality means nothing can be revealed about why or what was said.
Feb. 20 - Trudeau says he is confident probes by Dion and the justice committee will provide an airing of the facts. The Liberals use their majority to defeat an opposition motion calling for a public inquiry.
Feb. 21 - Wernick testifies for the first time before the justice committee. He calls allegations of political interference false and even defamatory and says none of his conversations crossed any lines.
Feb. 25 - Trudeau partly waives solicitor-client privilege and cabinet confidentiality so Wilson-Raybould can speak publicly, but not about communication with Kathleen Roussel, the director of public prosecutions.
Feb. 27 - Wilson-Raybould tells the justice committee she came under "consistent and sustained" pressure — including veiled threats — from the PMO, the Privy Council Office and Morneau's office to halt the criminal prosecution of SNC-Lavalin. Trudeau rejects her characterization of events. Conservative Leader Andrew Scheer calls on Trudeau to resign. NDP Leader Jagmeet Singh calls for a public inquiry.
Feb. 28 - Butts asks to testify before the justice committee.
March 1 - Trudeau makes longtime MP Lawrence MacAulay his new veterans-affairs minister, replacing Wilson-Raybould. Marie-Claude Bibeau replaces MacAulay as agriculture minister and Gender Equality Minister Maryam Monsef takes on the additional portfolio of international development. All three express support for Trudeau.
March 4 - Philpott quits cabinet, saying she has lost confidence in the way the government has dealt with the ongoing affair and citing her obligation to defend the cabinet as long as she is a part of it. Trudeau names Carla Qualtrough interim Treasury Board president.
At a rally in Toronto, Trudeau says the ongoing affair "has generated an important discussion" about how ministers, staff and officials conduct themselves. "Concerns of this nature," he says, "must be taken very seriously and I can assure you that I am."
March 6 - Butts tells the justice committee that Wilson-Raybould never complained about improper pressure to halt the criminal prosecution of SNC-Lavalin until Trudeau decided to move her out of her coveted cabinet role as justice minister and attorney general. Wernick disputes parts of her testimony as well. Drouin provides more details about the timeline.
March 19 - The justice committee's next scheduled meeting, which is also federal budget day, when MPs are to debate calling further witnesses. Opposition MPs on the committee have indicated they want to recall Wilson-Raybould as well as several officials from the Prime Minister's Office.
