The SNC-Lavalin scandal has already sparked two resignations, prompted two government probes and continues to dog Prime Minister Justin Trudeau.
This controversy and the two investigations underway — by the federal ethics commissioner and the House of Commons justice committee — centre around one key question: Did the prime minister or someone in his office try to pressure Jody Wilson-Raybould when she was attorney general to step in and resolve the corruption and fraud case against SNC-Lavalin Group Inc. in an effort to spare the Montreal-based engineering giant from criminal prosecution?
The scandal has had significant political ramifications. It has cost Trudeau his principal secretary, Gerald Butts, who resigned from that key role but has denied any wrongdoing. His resignation came nearly a week after Wilson- Raybould said she was stepping down from her post as veterans affairs minister.
The House of Commons justice committee has agreed to investigate what, if any, pressure Wilson-Raybould was subjected to regarding the SNC-Lavalin case. Wilson-Raybould is set to testify at that committee, but it is unclear how much she will be able to say, as she has said she is bound by solicitor-client privilege. And the Liberals on the committee blocked efforts to have Butts speak at the hearing.
Meanwhile, the ethics commissioner is investigating whether there was a breach of Section 9 of the Conflict of Interest Act. It prohibits any official responsible for high-level decision-making in government from seeking to influence the decision of another person so as to “improperly further another person’s private interests.”
Here is what you need to know about the ever-widening controversy.
What is alleged?
The controversy began with a Globe and Mail story, published on Feb. 7, that alleged Trudeau’s office had “attempted to press” Wilson-Raybould to intervene in the corruption and fraud prosecution of SNC-Lavalin.
The story, quoting unnamed sources, reported that despite pressure from the Prime Minister’s Office, Wilson-Raybould refused to ask federal prosecutors to make a plea bargain deal with SNC, also known as a deferred prosecution agreement, that would spare the company a trial and possible criminal conviction.
SNC-Lavalin faces charges of fraud and corruption in connection with nearly $48 million in payments made to Libyan government officials between 2001 and 2011. If convicted, the company could be blocked from competing for federal government contracts for a decade.
Wilson-Raybould is expected to testify before the House of Commons justice committee, which is looking into whether she was pressured by the Prime Minister’s Office to influence the SNC case. (Adrian Wyld/Canadian Press)
It’s not known how, or if, the PMO pressured Wilson-Raybould. The Globe and Mail story uses different terms to describe the alleged actions of the PMO toward Wilson-Raybould — that they “attempted to press” and “urged” her and that she “came under heavy pressure.” But precisely what those terms mean is unclear.
Earlier this year, Wilson-Raybould was shuffled out of her role as attorney general and put in charge of Veterans Affairs Canada, a move widely considered a demotion.
What is a deferred prosecution agreement?
Last year, the Trudeau government amended the Criminal Code to establish remediation agreements, also known as deferred prosecution agreements (DPAs).
This amendment, which SNC-Lavalin had lobbied the government to introduce, would allow companies accused of certain economic offences — such as bribery, fraud and corruption — to be spared criminal charges.
Watch: A timeline of the SNC-Lavalin scandal
Instead, these companies could admit wrongdoing and pay a financial penalty. Part of the reasoning behind the amendment, according to the Criminal Code, was to “reduce the negative consequences of the wrongdoing for persons — employees, customers, pensioners and others — who did not engage in the wrongdoing.”
In the case of SNC-Lavalin, which employs nearly 9,000 Canadians across the country, the concern has been that a successful criminal prosecution against the company could cost many jobs and damage the economy, particularly in Quebec.
However, the section of the Criminal Code that lays out the conditions for remediation agreements states that the prosecutor, when considering such an agreement, must not factor in the “national economic interest” or “the potential effect on relations with a state other than Canada.”
What was the nature of the alleged pressure?
SNC-Lavalin had hoped that its fraud and corruption charges could be resolved with a DPA and had lobbied federal officials for such an outcome, according to the Globe.
But in October, the Public Prosecution Service of Canada determined SNC had not met the criteria for a DPA.
According to the Globe and Mail, Wilson-Raybould then “came under heavy pressure” to persuade the Public Prosecution Service of Canada to change its mind. But she was unwilling to instruct the director of the public prosecution service to negotiate the agreement, the Globe reported.
The director works “under and on behalf” of the attorney general, who can issue directives regarding specific prosecutions, as long as those directives are in writing and made public.
So what if the government tried to influence its own AG?
The attorney general is supposed to be an independent, non-partisan role, and the most important part of that non-partisan role is the oversight of federal prosecutions. This independence is a trait not shared by other cabinet roles.
“The role of the AG and prosecutors is to act in the public interest, not in the interest of whoever is in the PMO,” University of Ottawa law professor Craig Forcese wrote in his blog. “They must, therefore, not be under the thumb of the political executive, and indeed must be insulated from political pressures that would, for instance, leave some people favoured in the criminal justice system, and others targeted.”
SNC-Lavalin faces charges of fraud and corruption in connection with nearly $48 million in alleged payments made to Libyan government officials between 2001 and 2011. (CBC)
This means that while cabinet ministers and the prime minister can consult with the attorney general, they cannot instruct or pressure the attorney general to make any specific decision regarding criminal cases.
What’s been the government response to the allegations?
When the story first appeared, Trudeau said the allegations in the Globe story “are false” and insisted that neither he nor any of his staff “directed” Wilson-Raybould to intervene in the case. Critics have pointed out that the Globe story never used the word “directed.”
Trudeau has told reporters that in a conversation with Wilson-Raybould before she resigned, she had confirmed to him the details of a discussion they had in the fall. In that discussion, he said, he’d told her “that any decisions on matters involving the director of public prosecutions were hers and hers alone.”
According to the Prime Minister’s Office, Wilson-Raybould raised the remediation case with Butts in a meeting the two had in December. The PMO said Butts told her to talk to Michael Wernick, the Privy Council clerk.
In Butts’s resignation letter, he denied that he — or anyone else in the PMO — pressured Wilson-Raybould.
Testifying before the justice committee, Wernick said he called Wilson-Raybould on Dec. 19, 2018, and mentioned that the prime minister and a lot of Wilson-Raybould’s colleagues were anxious about the potential job losses of prosecuting the company. But Wernick assured the committee those conversations “were within the boundaries of what’s lawful and appropriate.”
He also slammed the initial Globe and Mail article, saying it “contains errors, unfounded speculation and, in some cases, is simply defamatory.”
Are there any potential criminal implications for the PMO?
Criminal defence lawyer Joseph Neuberger said if there was a genuine attempt by anybody in the PMO, including the prime minister, to speak with the attorney general about ending an investigation or a criminal prosecution of any type, that can amount to obstruction of justice and/or interference with a public official. More specifically, obstructing a public officer or peace officer in the execution of her duty.
He said it would certainly be fair for the PMO or cabinet colleagues to ask the attorney general about the SNC-Lavalin prosecution, including how it was being handled, or even talk about the ramifications of a conviction.
The potential problem, Neuberger said, is if the conversation amounted to an overt or implicit directive to the attorney general.
Couldn’t Wilson-Raybould settle all this?
Wilson-Raybould had said she would not comment on the claims in the Globe story because she is bound by solicitor-client privilege. As attorney general, the government of Canada was her client, so she’s not at liberty to discuss conversations pertaining to legal proceedings.
Jody Wilson-Raybould has been clear that she’s ready to tell her side of the story in the SNC-Lavalin scandal. But what’s standing in her way? Salimah Shiviji explains the complex situation. pic.twitter.com/3s9tAGs1Ma
This is true, according to Andrew Martin, an assistant law professor at the University of British Columbia. The solicitor-client privilege doesn’t end when she’s no longer attorney general, he said.
However, some other legal expertshave questioned whether Wilson-Raybould is bound by those constrictions.
In her resignation note, Wilson-Raybould said she was aware that Canadians wish her to speak on these matters and that she is in the process of obtaining advice on the topics she’s “legally permitted to discuss.” To that end, she has hired former Supreme Court justice Thomas Cromwell to advise her.
In the House of Commons during a vote on a motion to hold a public inquiry into the matter, she rose to say that “privilege and confidentiality are not mine to waive, and I hope that I have the opportunity to speak my truth.”
Couldn’t the government waive its privilege?
Opposition Leader Andrew Scheer has noted that two former prime ministers waived solicitor-client privilege in order to co-operate with different investigations: Stephen Harper during the investigation into Sen. Mike Duffy’s expenses, and Paul Martin, who waived cabinet confidence during the Gomery Inquiry into the federal sponsorship scandal.
Trudeau insists that neither he nor any of his staff ‘directed’ Wilson-Raybould to intervene in the SNC-Lavalin case. (Sean Kilpatrick/Canadian Press)
In an interview with iPolitics, former Conservative justice minister Peter MacKay said Trudeau’s disclosure of his conversation with Wilson-Raybould was an “implied waiver” and that the former cabinet minister should be able to answer the question of whether she was pressured to intervene on behalf of SNC.
UBC law professor Andrew Martin said while MacKay may have a point, given the importance of solicitor-client privilege, lawyers are wise to err on the side of maintaining and not breaching privilege.
Trudeau has said he has asked current Attorney General David Lametti to look into whether the government could waive its privilege in this matter.
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