Front Burner - Catching up on the SNC-Lavalin Liberal scandal

Episode Date: February 11, 2019

Ottawa is reeling after a story broke late last week alleging that the Prime Minister's Office pressured former Attorney General and Justice Minister Jody Wilson-Raybould to intervene in the prosecution of Quebec-based engineering company SNC-Lavalin. Today on Front Burner, CBC's David Cochrane breaks down the scandal and explains why this could be very problematic for Justin Trudeau and his closest allies.

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CP Flight 21. Get the Uncover podcast for free on Apple Podcasts and Google Podcasts. Available now. Hello, I'm Jamie Poisson. So late last week, a report in the Globe and Mail sent Ottawa into a bit of a frenzy. The Trudeau government is being berated thanks to allegations in a report by the Globe and Mail. Did the Prime Minister fire the Attorney General because she refused to do his dirty work? No such direction was given to my predecessor. No such direction has been given to me.

It included allegations that the prime minister's office pressured former attorney general and justice minister Jody Wilson-Raybould to intervene in the prosecution of Montreal-based engineering giant SNC-Lavalin. Today, I want to get right to my conversation with David Cochran, a senior reporter at CBC's Parliamentary Bureau. He's here with me now to break down what we know and what we don't, and why this could be very problematic for Justin Trudeau and his office. So the question is, when does conversation become pressure? This is FrontBurner. David, hello. Hi, Jamie. Long time listener. First time caller.

So let's start today by going over the allegations that have caused a whole lot of upheaval in Ottawa. So what are the actual allegations against the prime minister's office? I mean, the crux of this is that SNC-Lavalin, a big engineering company, a global engineering company, but based in Quebec, is facing really serious criminal charges that threaten the very existence of the company, especially its Canadian operations. And the allegations, as reported in the Globe and Mail, is that the prime minister's office pressured the justice minister and attorney general,

Jody Wilson-Raybould, to try to convince federal prosecutors to cut a deal with SNC-Lavalin. It wouldn't face criminal charges. It would pay fines instead, and that would allow the company to survive. She refused to do that. Prosecutors have refused to cut this deal with SNC-Lavalin. And months after that decision was made, Jody Wilson-Raybould was shuffled out of her job as justice minister and attorney general. Jody Wilson-Raybould becomes our new Minister of Veterans Affairs. Jody has demonstrated tremendous skill in navigating very complex files. And the allegations as reported in the Globe and Mail and as amplified now by the opposition is that this is inappropriate political interference in the Canadian justice system. As Ms. Raybould-Wilson herself wrote after the prime minister fired her as attorney general,

it is a pillar of our democracy that our system of justice be free from even the perception of political interference. Can you give me a sense of how big a deal allegations like this could potentially be? Well, I'm not overstating when I say that sort of the future of SNC-Lavalin is at stake here, because they have been charged by the RCMP for bribery and corruption charges for their operations in Libya in between 2001 and 2011. 48 million in bribes, allegedly, 130 million in fraud, allegedly, in doing business with the former Gaddafi regime. Released a statement following the charges, saying that the charges are without merit. The company went on to sort of blame former employees if there is any blame to be cast.

Now, if they're convicted of that, that's serious enough. But where it threatens the operations of the company is that they will get a 10-year ban from bidding on and doing work with the federal government. And if you think about the amount of money federal governments put into infrastructure and public works, that's a big part of any engineering company's business plan. So not only would they be unable to do work here in Canada with the federal government, how do you then bid for work internationally when you're a Canadian-based company banned legally from doing

work with your own government. So the ripple effect of this on a global scale is enormous for SNC-Lavalin. They have been trying to clean up their act for years and getting this deal, this remediation plan with the federal government was a crucial part of that rebuilding plan. And being denied it and facing the possibility of this criminal prosecution and a conviction it really threatens the very existence of their operations. Our competition basically used this mercilessly against us and have been doing so for the past six years. I mean we know that

you know we've lost out on a number of contracts, probably in excess of $5 billion. So we know the stakes are very, very high for SNC-Lavalin. So we know the stakes are very, very high for SNC-Lavalin. How big a deal are the allegations against the PMO's office that they may have intervened here in an attempt to influence the justice minister and former attorney general? Yeah, so there's a couple of things here, right? What have we been hearing from this government about Canada and how the country operates? It's a rule of law country, free from political interference. We have always highlighted that Canada is a country of the rule of law, and we will make sure that the rule of law is properly and fully followed.

And they've been saying that because Meng Wanzhou, the chief financial officer of Huawei, is in Canadian custody right now, and China is leaning on Canada to set her free. And they say we can't because we don't interfere politically. Well, here we have an allegation of politicians or political staffers getting involved in a prosecution of a Canadian company, which really undermines that argument. But also it's a problem that it's the Liberal Party of Canada once again being accused of seeking special treatment for a corporate entity in Quebec. The political layers of that, given the history of the Liberal Party with the sponsorship scandal.

The Crachat government began pumping money into Quebec ad firms to sponsor events and fly the flag. Except that, in fact, millions were siphoned off into the Liberal Party's own coffers. This is a real problem for the government government if this is proven to be true. And we have to say, Jamie, that they have denied this from the beginning. You know, the prime minister said the allegations are false. So what is the prime minister saying exactly? Yeah, so this is interesting because the Globe and Mail story on Thursday morning made that a bad day for the government. And I think their initial response guaranteed that it would get a little bit worse.

The prime minister started by saying the allegations in the Globe and Mail story are false. The allegations in the Globe story this morning are false. So that's a very broad denial. But then his language got more specific. He said that neither he nor anyone in his office directed the former justice minister and attorney general to take any action on this. And when reporters followed up, they said, well, directed, fine. But what about pressured? What about influenced? What about leaned on?

And he kept coming back to this rigidly scripted answer on directed, directed, directed. But not necessarily direct, Prime Minister. Was there any sort of influence whatsoever? As I've said, at no time did we direct the Attorney General, current or previous. Right. I know Conservative leader Andrew Scheer says the Prime Minister's statement, it sounded like something written by a lawyer, right? He refused to answer questions about whether or not there was any interference. He kept coming back to a very carefully, legally vetted response. Yes. And you can imagine that lawyers would have been involved with something like this. And they probably were. I think that's a safe assumption on our part.

But I think the Liberals quickly realized that being so rigid in their answer and saying directed, directed, directed, the verb really mattered. That was causing some problems because it made it look like they were being deliberately narrow in their denial. And as things evolved throughout that day, I got a phone call from someone in the prime minister's office saying, look, it's not just directed, it's pressured. We didn't do any of this. We saw David Lamedi, the new justice minister. He started bringing that language into his answer of no pressure, no direction during question period. Neither the prime minister nor his office put my predecessor or myself under pressure, nor gave any directives. These allegations contained in the Globe and Mail, Mr. Speaker, are false. So they sort of stumbled out of the gate with their communications plan,

and it evolved a little bit throughout the day. And now it's evolved again with people in the prime minister's office, senior government officials saying, of course we talked to her office about this. The political stakes are huge. The economic stakes are huge. We're dealing with a fundamental change to the criminal justice laws over the past couple of years to allow for this remedy that SNC-Lavalin was seeking. It's normal to speak to your justice minister and your attorney general about these things. But none of those conversations in the prime minister's office view rose to the level of pressure or interference. Right. So the idea here is that they don't want Canadians to conflate

debate or discussion or vigorous conversation with pressure. David Lamedi seemed to be suggesting this as well when he talked to our colleague Chris Hall. We all have conversations. There are conversations. I have conversations with my constituents as an MP. And then as an MP, I have conversations with cabinet ministers. And when now I'm in cabinet, we have conversations with cabinet, with PMO. I mean, we take in all the information that one has to take in. Yeah. I mean, there's a base level of issues management that's going to happen in any prime minister's office where they reach out to their departments, specifically when you're dealing with the attorney general, because there's a level of independence that is required in that job. It has a special place in the Canadian government that you are the government's lawyer, the top law enforcement official. You need to be beyond reproach and beyond political pressure. So the question is, is when does conversation become pressure? And what you perceive as conversation,

does the other party perceive that as pressure? And this is where we're flying a little bit blind because the prime minister's office is denying everything. Jody Wilson-Raybould is saying nothing. You were not ever pressured by it, did you? I'm not going to comment. Right, and she could really clear this whole thing up. She could. She could stand up and say, I was not pressured inappropriately, I was not directed, and it makes this story go away.

That is a statement, at this point, it appears she has no intention of making. She has given us a no comment. She says she is bound by solicitor-client privilege, and that is why she is unable to say anything. But this further compounds things because, and I don't want this to be interpreted as casting doubt on the reporting of the Globe and Mail. Bob Fife, Stephen Chase, and Sean Fine are three of the finest reporters in the country. But the story does not tell us what specifically constitutes pressure. What were the acts? We don't know what was said. We don't know what was said. We don't know precisely when it was said. And we don't know who it was said by. They use versions of the prime minister's office attempted to pressure.

They urged her. She came under heavy pressure. But it doesn't say explicitly what that is or who it was done by. And again, I'm not saying that to try to undermine the globe. I'm just saying these are questions we all have that none of us have the answers to right now. Jody Wilson-Raybould could provide some of those answers. But she's saying because of solicitor client privilege, she just can't do it. So here's something I'm struggling with. David Lamedi, the current attorney general and justice minister, is having no problem talking about this. At no point have I been directed or pressured by the prime minister. So why can Jody Wilson-Raybould not talk about this?

This is something I'm struggling with too, because we've all seen the image of a defense attorney standing on the steps at a criminal trial, and they stand up and say, my client is innocent of these charges. They did not do what they were being accused of doing. Now, that is a declarative public statement that in no way violates solicitor client privilege. David Lamedi stands in the House of Commons and in repeated media interviews and says there was no pressure. Now, he has only spoken to the prime minister's office. He has not spoken to Jody Wilson-Raybould, is what he told Chris Hall when he was on the House this weekend. I was relying on what the prime minister had said, and he was quite clear earlier in the day. So we don't know exactly what David Lamedi knows either.

But he can make that blanket denial statement that the allegations in the Globe and Mail are false. There was no pressure. There was no direction. A lot of people in this town think Jody Wilson-Raybould could do that. She clearly has a more rigid version of solicitor-client privilege. So now the question is, will the prime minister's office waive solicitor-client privilege and allow her to speak freely? And if they do, what would she say and would she even do it? A consideration beyond the politics of this, Jamie, is that the SNC-Lavalin matter remains unresolved. Federal prosecutors have signaled their intention to proceed. SNC-Lavalin is seeking a review of that decision to deny them the special arrangement that they

are trying to get. So this is an issue that is still before the courts. Should the attorney general be saying anything about that? Could they potentially interfere with the process or influence that parallel legal process that is going on by saying something? This is all stuff they need a good legal vet and a scrub on, but they're being pressured. I mean, the Conservative leader Andrew Scheer is saying, you need to waive the privilege, we need a full accounting, and if you refuse to do it, Canadians can only conclude

that you have something to hide. We are convinced that there is more to see here, and we have begun the process of exploring legal avenues should Liberals in Parliament attempt to cover this up. So I want to get a sense here of sort of how improper this could be if these allegations were true. improper this could be if these allegations were true. So if the prime minister's office did put, or somebody in the prime minister's office did put pressure or heavy pressure on Jody Wilson-Raybould to intervene, is this illegal? That is certainly the opinion of Michael Bryant, who's a former attorney general of Ontario,

who is the head of the Canadian Civil Liberties Association. He has said this could amount to obstruction of justice, if you're using political interference to try to subvert the course of justice. I've seen obstruction of justice charges laid in circumstances with far less evidence than we've gotten in this particular case. I'm not sure, because I go back to the blind spots I talked about, and I have some questions that if it had risen to the level where people are talking about obstruction of justice seriously, where charges could be laid, where there could be an investigation into the conduct of the prime minister's staff. Why was Jody Wilson-Raybould still the minister of justice and attorney general until she was shuffled? Presumably there are conventions that if you are pressured at that level or direct at that level, you resign. Right. She did not quit. She's still in cabinet. She's

been moved to the Veterans Affairs portfolio, which is certainly a second tier portfolio compared to justice. She did not quit. Staff in the prime minister's office say she never raised any concerns directly with the prime minister about the conversations she was apparently having with his staff. So if it got to the level of criminality and inappropriateness, that you would assume the top law enforcement officer in the government would do something about that. And she didn't. So this is where that question, is it illegal? Was it illegal? Without more specific explanations of what could have happened, We just don't know. And of course, you mentioned she was shuffled out of her job

to a position that a lot of people see as a demotion, veteran affairs minister. And is there any suggestion that she was shuffled out of her job because of this? The spin or the explanation, depending on how you want to talk about it, from the prime minister's staff is that Veterans Affairs is going to roll out about $10 billion in new spending this year.

There's a lot of new programs coming for veterans' benefits, and that is a priority for the government, and they wanted someone strong who could deliver there, and that's why she is in that portfolio. I would caution anyone who thinks that serving our veterans and making sure they get the care to which they are so justly entitled is anything other than a deep and awesome responsibility. The Globe story changes that whole impression, as does the 2,000-word manifesto that she published the day she was shuffled, where she talked about the attorney general needing to be free from political interference, needing to speak truth to power. And a lot of people saw that. Look at that statement now.

Right, in light of these new allegations. And they're linking them retroactively. And her refusal to say anything or inability to say anything, just is a blank slate that people are writing their own motivations on. Okay. Now let's talk about SNC-Lavalin. And there's a whole other part to this story too, one that started before these recent allegations of political interference,

and it's about Deferred Prosecred prosecution agreements, or DPAs. So the Globe and Mail's Robert Fyfe, who broke this story. SNC-Lavalin had been lobbying everybody, including the janitors, basically, on Parliament Hill. He says that these have been called the SNC law. Can you explain that to me? Yeah, so deferred prosecution agreements, it's new to Canada. It's something that exists in places like the United States and the United Kingdom. And what it is, is kind of like a plea bargain for corporate wrongdoing. So right now, SNC-Lavalin is facing criminal charges. And that was the only sort of remedy available to deal with this. The way it works with a deferred prosecution agreement is if the prosecutors agree to sort of drop the criminal charge and move to this alternate remedy, you pay a fine, you agree

to pay back any money you made from your illegal acts, you agree to corporate changes in how you operate and to a level of oversight. So it's like it's a plea bargain, essentially. It's a lesser charge. And this is like a relatively new law. Yeah. It came in last year and SNC-Lavalin lobbied the federal government voraciously to have this law created so that the deferred prosecution agreement was available as a remedy in Canada. That was step one of their plan to save the company. Right. Step two was then to get a deferred prosecution agreement.

And that's where it all fell apart. Because that didn't actually happen. It did not. This takes us to October. Yes. Federal prosecutors said, we're not dropping the criminal charges. We're not moving to a deferred prosecution agreement. We are going to proceed.

And that was a major blow to SNC-Lavalin. Now, they have appealed that decision, more or less. They've asked for a judicial review, and that has not been finalized. So they are moving through a legal process to try to have a judge review whether the prosecutors were fair in that decision-making process. So there's no secret they wanted this. It just all blew apart when the prosecutors wouldn't give them this agreement. all blew apart when the prosecutors wouldn't give them this agreement. And now we have the political fallout of this with the allegations that Jody Wilson-Raybould was pressured in the wake of that decision to try to help save SNC-Lavalin. How has SNC-Lavalin responded to

all of this controversy that's swirling around them right now? Yeah, I mean, I've asked for statements, I've asked for comments, I've asked for reaction, and I got a flat, we will not be commenting on the Globe and Mail story or any other related questions. I know that they have been quite public in the impact of all of this is having on the future of the company, the risk to its 9,000 Canadian employees, its 50,000 global employees, and to all of its shareholders and all the supply chain companies that feed into SNC-Lavalin, the people who supply with the materials it needs on projects. And if we don't find some way of settling this through the remediation agreement, then this could go on for a few years more.

And the only people who are being punished here is the innocent employees, shareholders, pensioners, supply chain. They have talked about that because that's the conversation they want to have. And so if these allegations were true, if the prime minister's office did put any pressure on Jody Wilson-Raybould to intervene, would the argument have been that this company is too big to fail? I think so. I mean, you have to, I think there's an acute sensitivity to this because this

is a liberal government and this is a Quebec company and just the long history of the party, this particular party and that particular province. But, you know, the politics aside, I think we can fairly conclude that any government of any stripe, when faced with the possibility of a company size and importance of SNC-Lavalin going under would have to have conversations about it. So where do we go from here? You mentioned the conservatives and the NDP are both calling for independent probes. Yeah, the prime minister wants to unite the country. He's united the opposition this week. They want the Justice Committee to hold hearings with some of the

top officials in the prime minister's office, in the Justice Department, and in the Privy Council to testify on this. And they want Jody Wilson-Raybould to waive her solicitor client privilege or for the government to waive it to allow her to speak publicly. And they want an ethics investigation by the ethics commissioner. The Justice Committee will meet at some point this week. I spoke with the chair of the Justice Committee, Anthony Housefather. He's a Liberal MP from Quebec. The Liberals have a majority on that committee. He says they're going to convene a meeting this week and make a decision on whether or not they will hold hearings. Given a Liberal majority and given the fact that the SNC-Lavalin issue is still before the courts,

most people seem to think it is unlikely, though no decision has been made. As for waiving solicitor-client privilege, the Prime Minister's office tells me they've sought the advice of the attorney general's office on that. They don't know when they're going to get that advice, but waiving privilege is a complex thing, and they want that advice before they make a decision. So those are the big decision points and the milestones that we're going to be looking for this week, because that will really determine where this story goes next. Thank you so much for coming on the show, David. Thanks, Jamie. Happy to do it. We'll be back in a second.

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it wasn't clear if Minister Wilson-Raybould would be in attendance with the prime minister. I'm Jamie Poisson. Thanks for listening to FrontBurner. For more CBC Podcasts, go to cbc.ca slash podcasts. It's 2011 and the Arab Spring is raging. A lesbian activist in Syria starts a blog. She names it Gay Girl in Damascus. Am I crazy? Maybe.

As her profile grows, so does the danger. The object of the email was please read this while sitting down. It's like a genie came out of the bottle and you can't put it back. Gay Girl Gone. Available now.