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How a bill becomes law—when SNC-Lavalin pulls the strings

The powerful engineering giant had two former Supreme Court justices, a former Privy Council clerk and the PMO on its side. It got everything it wanted—except a deal to escape a court fight
SNC Lavalin Caisse 201908006
The front lawn of the headquarters of SNC Lavalin is seen on November 6, 2014 in Montreal. Shares SNC-Lavalin Inc. plummeted to the lowest level in nearly 15 years Tuesday a day after its largest shareholder, the Caisse de depot et placement du Quebec, warned that the embattled engineering firm had to move to emergency mode to improve its project execution. THE CANADIAN PRESS/Paul Chiasson

Sixty-seven times a day, typically somewhere in Ottawa, a lobbyist has met a federal official in 2019. The first six months of the year saw 12,219 such meetings, according to lobbying commission data. But most of the folks trying to persuade power brokers will take what they can get. They don’t have two former Supreme Court justices backing them up, regular access to senior advisers to the Prime Minister, a former Privy Council clerk on their side, and a long list of like-minded friends in the corporate world. Not many advocates, in other words, can match SNC-Lavalin’s muscle.

When ethics commissioner Mario Dion published a scathing report this week on Justin Trudeau’s conduct in the SNC-Lavalin affair, his exhaustive account of events offered an inside look at how a Canadian corporation, on the heels of a corruption scandal, helped convince the Prime Minister’s Office that the best way forward was a new law that would allow the company to escape any charges.

READ MORE: Such stark statements: The ethics commissioner faults the PM

A made-in-Canada deferred prosecution agreement regime was SNC-Lavalin’s idea, and the company even pitched the finance minister’s office, early in 2018, on getting it done by slipping the proposal into a budget bill—a matter of days after the conclusion of a public consultation packed with DPA-friendly submissions.

Once that bill became law, SNC and its lawyers lobbied PMO advisors for DPA negotiations relentlessly, often behind the back of then-attorney general Jody Wilson-Raybould. Their lobbying intensified after the director of public prosecutions denied the company DPA negotiations, and continued until this past February, when the Globe and Mail first broke the story that Trudeau had inappropriately pressured Wilson-Raybould to overturn the director of public prosecutions’ decision. Here, we break down the company’s long lobbying campaign, citing paragraph numbers from Dion’s report where applicable.

SNC-Lavalin’s first lobbying on DPAs

Dion’s report recalls that SNC-Lavalin had “made efforts to seek a settlement” with the Harper government in 2015 that would “avoid a lengthy criminal trial.” [para 22] Lobbying records suggest none of the meetings at the time dealt with “justice and law enforcement,” the subject matter that would later become shortcode for meetings about DPAs. Those talks with the Tory government “reportedly stalled,” and the company hit pause on its lobbying efforts until that year’s federal campaign elected a new government.

Months later, SNC signed an administrative agreement with the feds that allowed it to continue work on government-funded projects as it dealt with legal challenges.

In February 2016, lobbying records indicate the first contact between the company and senior Liberal advisors, including PMO staff, on the topic of adopting a DPA regime. Trudeau testified to Dion that he first heard about the company’s desire for a DPA regime in “early 2016,” when he and his top Quebec advisor, Mathieu Bouchard, met with CEO Neil Bruce. [para 26] (Bouchard met with the company three times in the first half of 2016, but lobbying records don’t list a single meeting involving the PM.)

Bouchard told Dion that during the same year, he “started seeking information” on DPAs from other departments, and eventually several key staff across government met internally to discuss a DPA regime. [para 33] That culminated in public consultations that heavily favoured a DPA regime.

RELATED: Where SNC-Lavalin’s push for deferred prosecution came up short

The public consultation on DPAs

Eventually, all the departments involved in Bouchard’s outreach—Finance; Public Services and Procurement Canada (PSPC); Justice; Innovation, Science and Economic Development Canada (ISED); and Global Affairs Canada—agreed to launch a public consultation on DPAs, led by PSPC. A briefing note prepared for the deputy minister at ISED alluded to “direction from the Prime Minister’s Office to undertake consultations over the summer of 2017.” The consultations launched on Sept. 25.

SNC made its submission in October 2017. As we’ve reported, the company had allies during that process—and submissions from companies, which overwhelmingly supported a DPA regime, were reflected heavily in the final report on the consultation. (Read all the submissions here, which Maclean’s obtained via access-to-information.)

At the time, SNC’s vice-president of government relations, Sam Boutziouvis, was pushing departmental officials for face time. He ended up meeting with several officials on Nov. 3, 2017, though no one from Justice (“Shy, are they?” he wrote in an email to a PSPC official). On Nov. 8, Boutziouvis asked Barbara Glover, an assistant deputy minister at PSPC, for advice “on a couple of matters.” Her terse reply: “I’m not in a position to provide informal or off the record advice, which I’m sure you understand.” (Read that email exchange in these documents, released via access-to-information.)

DPAs sneak into the budget

Bruce, the CEO, found an audience with Finance Minister Bill Morneau during World Economic Forum meetings on Jan. 23, 2018. Dion reports the meeting came at the request of SNC. [para 36]

A week later, Morneau’s director of policy, Justin To, met with Bruce and senior SNC officials back in Ottawa. Dion writes the company gave To a “confidential discussion document” that pushed for “timely implementation” of a DPA regime “via the federal budget.” To told Dion he did not share that document with his boss, nor did he discuss the meeting with anyone at the PMO. [para 38, 39]

Five days after the public consultation’s results were made public, the proposed DPA regime found its way into Morneau’s budget speech. Later, the regime was enshrined in that year’s budget bill.

For his part, Trudeau told Dion that he assumed SNC contributed to the consultation—but that “decisions relating to legislation are a matter for Cabinet and government, not for private companies.” [para 50] Trudeau’s lawyers even told Dion, “SNC-Lavalin was not the driving force behind the introduction of remediation agreements.” [para. 233]

RELATED: The one and only person to blame for the SNC-Lavalin scandal

Senior government officials advise SNC-Lavalin’s side

By the late summer of 2018, Ben Chin, Morneau’s chief of staff, was actively pushing SNC’s interests with Jesssica Prince, Jody Wilson-Raybould’s chief of staff. “He had been speaking with SNC-Lavalin,“ writes Dion. “And the company’s perception was that the process of negotiating a remediation agreement was taking too long.” Chin asked if anything could be done to “expedite the process.” He told Dion he “did not recall” why he made that ask. [para 51]

More meetings followed in September, after the director of public prosecution’s decision on Sept. 4 not to negotiate a DPA with SNC, and into October. Dion says SNC met with Privy Council Office and Department of Finance officials to talk about a new tack: “submitting to the Prosecution Service public-interest considerations in support of a remediation agreement.” Dion found that officials in both departments “actively assisted” the company’s crafting of those arguments. [para 305] They even “suggested possible additional factors” after reviewing a PowerPoint presentation prepared by the company. [para 132]

On Sept. 18, then-Privy Council Office clerk Michael Wernick met with Bruce. At that meeting, the SNC-Lavalin CEO warned it would “have to contemplate drastic action” if it faced conviction and a ban on federal contracts. [para 131] Wernick suggested the company could submit new public-interest arguments to the director of public prosecutions. (John Geddes writes about the company’s initial interest, which eventually dwindled, in making that public-interest case for a DPA.)

SNC-Lavalin introduces a “Plan B”

The same officials who offered advice to SNC also got an inside look at the company’s possible “Plan B” in case of conviction, which was outlined in the PowerPoint document. [para 133] (The apparent plan included hiving off the company into two entities, one which could be wound down in the case of conviction, another that was free of wrongdoing.) Around this time, Dion writes, Bruce found another audience with Morneau to talk through concerns. [para 134]

“Thanks for nothing, DPPSC”

Dion unearthed an SNC “research piece,” sent to the PMO on Oct. 11, that reminded senior staff of the company’s declining share price—and offered more inside information, including “details on key financial metrics, as well as a recommendation for investors.” The document was snarkily titled “Thanks for nothing, DPPSC,” in reference to the director of public prosecution’s refusal to pursue DPA negotiations. [para 137]

READ MORE: 9,000 SNC-Lavalin jobs at risk, give or take 9,000

The former PCO clerk steps in

A few days later, on Oct. 15, Dion reports that Wernick spoke to Kevin Lynch, a predecessor as Privy Council clerk who happened to serve as chair of SNC-Lavalin. Lynch asked Wernick for advice, and Wernick “offered no views on ways forward other than through the judicial process.” [para 138] Around the same time, Lynch and Robert Prichard, SNC legal counsel, had a conversation with then-Treasury Board President Scott Brison “on an unrelated matter”—but raised the company’s position on DPAs. [para 139]

SNC-Lavalin ramps up its lobbying

Dion says the next month, November, saw SNC “increase their communications” with the PMO and other government officials. The company was “close to escalating measures” in their nebulous “Plan B.” Dion reports the conversations were “centred on the company’s request for a judicial review” of the denial of a DPA. [paras 162, 163]

The retired Supreme Court justices weigh in

The same month, two former Supreme Court justices enter the scene. Frank Iacobucci, SNC’s legal counsel, “prepared a legal opinion” for Wilson-Raybould’s consideration that “outlined the legitimacy for her to intervene.” On Nov. 2, Prichard sent Iacobucci’s opinion to Brison, who forwarded it to the PMO. Brison told Dion he wasn’t the only cabinet minister who received that opinion. [paras 165, 166]

The day before, Iacobucci asked his longtime colleague on the bench, John Major, for his own opinion on the lawfulness of the director of public prosecutions’ refusal to provide an explanation for not going ahead with a DPA. Iacobucci and Major served together on the Supreme Court for most of 12 years. Dion says the company “hand-delivered” Major’s opinion to Chin, as well as the PMO, in mid-November. [paras 167, 168]

Beverley McLachlin’s name comes up

Around the same time, at a meeting with Morneau in Beijing, Lynch introduced the idea of “third-party legal experts” who could shed more light on the appropriateness of a DPA. Morneau told Dion that Lynch “may have brought up” the name Beverley McLachlin, the former chief justice of the Supreme Court. [para 173]

Bouchard and Elder Marques, another PMO senior advisor, met with Prichard, the SNC lawyer, on Nov. 27. Dion says the three men discussed the opinions of the two former Supreme Court justices, as well as the prospect of SNC dropping its judicial review application in exchange for DPA negotiations. McLachlin’s name was also raised. Dion writes that Iacobucci had already reached out to McLachlin, and the former chief justice “had responded that she would meet with Ms. Wilson-Raybould.” [paras 190-193]

At the same meeting, SNC proposed an arrangement that would see McLachlin negotiate a DPA on behalf of the federal government. Bouchard and Marques reportedly briefed Katie Telford, Trudeau’s chief of staff, on the meeting. Word apparently never reached Trudeau, who denied to Dion that he knew anything about McLachlin serving as mediator. [paras 193, 194]

RELATED: The SNC-Lavalin scandal is proof our system of government is working. Seriously.

By December, Dion writes, both SNC and a senior PMO staffer had “personally reached out” to McLachlin. All of these discussions were happening without Wilson-Raybould’s knowledge. Writes Dion: “Although Ms. Wilson-Raybould had been made aware of the possibility of obtaining advice from “someone like” Ms. McLachlin, she did not know until I mentioned it to her during her interview that preliminary discussions between the former Chief Justice and SNC-Lavalin’s legal counsel and a senior advisor in the Prime Minister’s Office had already taken place.“ [para 273]

Dion summarized McLachlin’s major concerns with getting involved in the SNC matter: “She was no longer a lawyer and could not offer legal advice. She would also require a proper briefing. Mr. Bouchard also noted that Ms. McLachlin would need to be invited by the Attorney General; Ms. McLachlin did not want to be retained by the Government of Canada.” In the end, McLachlin was never offered a role. [para 199]

Lobbying continues until the story breaks

SNC didn’t let up—that is, until the Globe and Mail broke the story wide open. Writes Dion: “Senior staff in the Prime Minister’s Office continued to have discussions with SNC-Lavalin’s legal counsel on next steps and possible solutions until the allegations that Ms. Wilson-Raybould had been pressured on the matter were made public on February 7, 2019.” [para 228]

Since then, no lobbying records exist in which SNC-Lavalin raised “justice and law enforcement” with a senior government official. In May, Wilson-Raybould’s replacement as justice minister and attorney general, didn’t comment on whether or not he would offer SNC-Lavalin a DPA, citing ongoing litigation.