A Tale of Two Scandals; of SNC and CSA

February 18th, 2019

There’s a company in Quebec called SNC Lavalin, you may have heard of it.  The Libyans have heard of it of course, and so has the Canadian civil service (they have intimate knowledge, actually), and the Prime Minister’s Office (PMO) may have heard something at some point about SNC but they’re not sure what, at least officially.

Newspapers know about SNC, they’ve known for ages that this engineering and construction behemoth has long behaved as unencumbered by archaic notions of legality.  They treat business as brimming with opportunity, and the law as a pesky distraction.  They’re dirty, really.

Some of that dirt was seen in newsprint this month, related to their infamous Libyan bribery program, as run 2001 - 2011.  It seems that throughout 2018, SNC was lobbying the PMO for what’s called a “deferred prosecution agreement”, which is a granting of amnesty for criminal activities related to their bribery charges in exchange for corrective actions by the criminal party.  In practice, the trade is basically a get-out-of-jail-free card offered by the Minister of Justice in trade for some words of apology and a couple of cosmetic personnel shuffles by the criminal outfit.

Curiously, the SNC prosecution was to be scheduled late in 2018, whereas the Federal Government decided to pass Bill C-74 (the deferred prosecution bill) in June 2018, specifically to grant themselves the power to waive prosecutions in cases just like SNC’s.  The SNC case has been percolating since 2012.  The timing is, I’m sure, coincidental.

If you’ve been following the issue in the papers, you’ll recall that back in October of 2018, the Justice Minister, Jody Wilson-Raybould, shocked the Hill by refusing to rubber stamp a deferred prosecution for SNC.  Then it came out that SNC had been lobbying the PMO for a waiver, and very aggressively by that time, for over a year.  Then it came out that the Government of Quebec had been lobbied by SNC, for them to lobby the PMO, for the same thing.  Then it came out that the PMO had been trying to influence the Minister of Justice to, you know, reach the right conclusion.  And that’s a crime too.

This whole sordid situation is pretty normal in government.  In SNC’s case, it’s a long-established pattern, from the bribery allegations of the Padma Bridge case (2011), to the Arthur Porter Kick-Back Scandal (2011-2014), to the Kerala Dam bribery and financial fraud scandal (1995-2008), to the Jacques-Cartier Bridge scandal (mid-2000’s) -and on it goes.  It goes on because SNC is never held to account for their conduct. 

You see, SNC Lavalin does engineering of scale.  That is, they build national and municipal infrastructure.  They contract to, and work with, civil servants.  All the time.  Civil servants are seconded to SNC, then back, flowing across the fictional divide between government and nominal private enterprise like a child’s pop-bottle backwash, getting dirtier with every transaction. 

Working in multiple roles with the civil service, at the same time as contractor, employer, and financier, means that SNC has long enjoyed the same civil service experience of exemption from responsibility, including criminal responsibility, for their conduct.  It’s just that, amazingly, in this case the Minister of Justice wouldn’t play the game.

So we sent a note; 

“Given recent news re Gerald Butts / SNC, you may wish to note that we (PS Knight Co) gave the PMO two in-person briefings in 2015/16 (to Butts and Cyrus Reporter) outlining evidences of criminal activities in the civil service, and in response the PMO arranged to shut down DoJ investigations and two RCMP criminal investigations in order to protect the civil service.  Best bit;  We have the briefing notes from the meetings (identifying specific criminal activities), the PMO’s written acknowledgement of the meetings, and the PMO’s statement that they intended to do nothing on the file. Useful?”

Won’t say who we sent it to.  That would be too useful to the wrong people.  But we had basis to send it.

We noted that the SNC issues currently dominating the news cycle are identical to the Canadian Standards Association (CSA) issues we’ve been chronicling on this site since 2013.

In further correspondence last week, to a different notable party, we noted that;

“The CSA is basically unsupervised, largely because the work they do is quite boring.  Without supervision, yet with powers of government, the CSA has found that it can engage in highly profitable, yet very illegal, actions without consequence, safe in the knowledge that their colleagues elsewhere in govt will protect them.”

That’s the SNC story, right there.  These breaches of law by CSA “were the subject of [our] PMO briefings.”

In other words, this isn’t new.  This conduct is routine at the PMO, and our experience is just another instance of it. 

There’s no hope for the PMO in denying it; we conducted briefings for senior personnel at the PMO, including Gerald Butts (Principal Secretary to the Prime Minister) and Cyrus Reporter (then the PM’s number three-on-the-tree).  Our briefing documents were also received by the PM’s Chief of Staff, and we can prove that too. 

From an April 2016 letter from our contractor to a PMO contact;

“I have […] copied the Prime Minister’s chief of staff on this issue”.

To hammer it; quoting from correspondence between our contractor and the PMO;

“I am also copying the offices of other relevant ministers including Calgary-based Kent Hehr [MP].  His office was most helpful in proposing to assist, but his efforts were blocked by [your civil servants].”

“I have also copied the office of the government house leader who was contacted on this file last December and the minister’s parliamentary secretary, Greg Fergus, who was also briefed last year.”

“I have also copied the office of the Minister for Democratic Reform, who received hand-delivered correspondence on this issue last December [2015].”

“The above was sent to Navdeep Bains (on several email accounts), Gerald Butts, Dominic Leblanc (multiple accounts), Kent Hehr, Ali Salam, and Greg Fergus (multiple accounts).”

Get the idea?  The PMO, and the Federal Government broadly, knows all about the CSA scandal.

As we noted in our note to the notable party;

“We gave numerous briefings to MPs of all parties (except BQ) from 2012 onward.  We also [briefed] the Senate and PMO directly.  […]  In example, on one [CSA] issue alone, [our contractor] communicated with Butts on March 18 2015, April 7 2015, Sept 28 2016, Oct 14 2016, and Oct 26 2016.”

As the dates testify, there was no trouble getting through.

What did we say, specifically?  Well, we retain our notes from these PMO briefings and the correspondence related to them and, as below, here are the issues we discussed, (quoting the list verbatim from the PMO notes);

1. Counterfeiting of safety certifications (bankrupted multiple businesses across Canada)
2. Import / export fraud
3. Falsification of safety test results
4. Falsification of certifications
5. Sales of blank certifications
6. Sales of influence over domestic law
7. Provision of influence over domestic law to foreign persons, entities and governments
8. False reporting of financial returns (for 25 years since ~1990)
9. Violations of the Federal Transparency Act
10. Govt sanctioned shakedowns (extortion) practices

As you can see, we can prove our in-person briefings with senior PMO leadership and we can prove the points we made to them and, from our Parliamentary Briefing binders, we can prove that hundreds of pages of evidence were provided to the staffs of PMO leadership during these briefings and in follow-ups thereafter.

Ready for the smoking gun?  Here you go;

From: “Reporter, Cyrus”

Date: November 23, 2016 at 10:26:43 CST
To: [redact]
Subject: RE:

From our side we have looked at this very carefully and also have engaged ISED.  We don’t see a basis for getting involved in this dispute at this juncture. We will monitor the situation to see if the Federal Court releases a decision at some point in the future that indeed has a broader impact on public policy which would cause us to get involved.

Cyrus

Folks, the CSA has been outed for a wide range of unlawful conduct, like monetizing legislative processes and government authorities, these being especially serious criminal activities.  Just on the selling of influence over legislation, the CSA is in breach of Criminal Code sections 46.2(b) and (e), 46.3(b), 46.4.4, 120, 121(1), 122, and 463.  They’re also in material breach of Sec.900 of NAFTA (now USMCA).  They’ve been found in breach of Canada’s Public Review Law (Fed Court 2017). They’ve been caught (in 2010) running and eight-year long counterfeiting operation.  They’ve been caught falsifying certifications, import / export docs, safety testing results, etc., and repeatedly.  They were caught engaging in tax fraud in the US, totalling about $247MM USD.  And all of this is done by a Crown Agency under the authority of the Federal Government, and all of this is within the PMO’s knowledge.  Yet the PMO did not “see a basis for getting involved”?

Worse; they took the initiative to shut down government investigations of CSA conduct, slow-walked two criminal investigations before quietly dropping them, they even intervened with the Mexican NAFTA Secretariat to supress CSA’s Sec.900 violations.

It goes on like this.  Even last week, buried in a story about the Green Terra bankruptcy, was a telling line that “their CSA certifications were always fake.”  Recall the CSA counterfeiting program, of selling fake certifications to modular home builders like Green Terra?  Well, as above, the PMO was briefed on that, they know -and they knew- all about it.  As one insider put it on Friday, “Might this be worth getting in [his] face?”  We think so.  It’s the same civil service, still behaving as above the law.

As we wrote last week to a different insider;

“And in each case, the PMO and civil service covers for them.  After all, they decide whom to prosecute.  And they’ve decided that CSA is above the law.”

And how is that different from SNC?