Front Burner - Liberals under fire for accepting Illegal SNC Lavalin donations

Episode Date: May 1, 2019

Journalist Harvey Cashore on the revelation of SNC Lavalin employees who made illegal campaign donations worth more than $100,000 to the Liberal Party of Canada.

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Hello, I'm Jamie Poisson. It's been almost two months now since Jody Wilson-Raybould gave her testimony about the government and SNC-Lavalin. As we all know now, Wilson-Raybould said she was pressured to get a deferred prosecution agreement for the company, which she called political interference. I experienced a consistent and sustained effort. Veiled threats if a DPA was not made available. Since the story broke, a ton has happened. Jane Philpott says she's seen enough and quit cabinet.

We're allowed to have disagreements and debate. The prime minister has threatened to sue the conservative leader, Andrew Scheer, over comments he made regarding the SNC-Lavalin controversy. But it seemed like it was kind of dying down. Until yesterday. A new CBC investigation has found the names of SNC-Lavalin employees and their spouses, who allegedly funneled over $100,000 in illegal campaign donations to the federal Liberal Party. Thousands were also funneled to the federal Conservatives, and this all happened between 2004 and 2009. This all raises a lot of questions about why SNC-Lavalin avoided punishment

back then, and the connections between the company and the Liberal Party now. Today, I'm talking to Harvey Cashore, who broke this story. This is Frontburner. and illegal campaign donations, the idea here is essentially that SNC encouraged their employees to make donations to political parties and then reimburse those donations through bonuses. Think of it as sort of a workaround for the ban on corporate donations. And then in 2016, Canada's election commissioner offered the company a deal to sign something called a compliance agreement, essentially saying that they never do this again. Sound familiar? Okay, so to make a little bit more sense of this, Harvey Cashore. Harvey, thank you so much for joining us today. You're welcome.

Just when we thought we were taking a break from SNC-Lavalin, here we are again. It's come back. It's come back. So can we start today with how you got these documents? I mean, we obviously got this leaked to us from a source, from a whistleblower, if you will. And I think what the bigger way to answer that question would be to say, there's a lot of people out there, even in the Liberal Party, who are concerned about the relationship between some businesses and the party, and they want more transparency,

and they don't want decisions made in the back rooms. Right. Essentially, what you're saying here is that all of these concerns we've been hearing, that SNC-Lavalin possibly was wielding a lot of power in this Liberal government, that there are people that are still very concerned about this and think that maybe more needs to come out here. Right. They know, and there have been secrets about the relationship between SNC-Lavalin and government and this document that we were leaked. Well, it was a secret. It was a secret that the Liberals knew about, that SNC-Lavalin knew about, that the Commissioner of Canada Elections knew about, but the public was kept in the dark.

And as a believer in transparency and openness in government, as an investigative journalist, you know, I think that's not acceptable. I think that Canadians should know about these kinds of things. But there were all these people at SNC-Lavalin who were named on this document. Right. And I want to get to these people. And I also want to get to why you think that we were kept in the dark about this. But first, can we go back a little bit and talk about these allegations of illegal political donations?

Right. And, you know, we have known for some time now, because of that, remember that Charbonneau Commission in Quebec that probed, you know, corruption and construction industry. The inquiry has heard from nearly 200 witnesses over the last two years, exposing a vast system of corruption and kickbacks. One witness put it this way. Everything there is tricky. Everything is rigged.

We've known in Quebec, for example, that a lot of companies were involved in this scheme where they were banned from contributing to political parties for reasons that were put into law. And that was our electorate did not want undue influence by corporations over federal elections. That's why the ban was put in place in the first place. Corporations and unions couldn't do this anymore. But what we found in Quebec a few years ago was that corporations were finding a way to circumvent that law. And they would have these people called straw men, people in the company that would on paper look like they'd made an individual donation. What no one would know is that privately and behind the scenes, the company would pay a bonus or some kind of other mechanism

to get money to that person. So in effect, the company was actually making the donation, but nobody would know about it. And that exploded onto the political scene in Quebec. But never did the questions really go into Ottawa. And we know that one of these companies was SNC-Lavalin. Exactly. The executives had to testify, provide affidavits. And so we knew this scheme already existed on that front. And then, of course, we discovered that very quietly in 2016,

the commissioner of CanE Elections began an investigation. So tell me about this investigation that was headed by the Commissioner of Elections Canada. Right. And at the time, we knew very little about it. We now know that back around 2013, 2014, the Commissioner, and this is the sort of investigative branch or the investigations people behind enforcing the Canada Elections Act. And they began interviewing all of these people that we got on this list about, you know, these bonuses and these, in French, the word's called prétend, you know, a straw man and that kind of thing. And it wasn't until 2016, kind of out of the blue really, that the commissioner announced he'd signed what's called a compliance agreement with SNC-Lavalin. There's more trouble for engineering giant SNC-Lavalin. The federal elections commissioner says the company made more than $100,000

in illegal donations to political parties. The donations were made to the federal Liberals and to the Conservatives. And what's the compliance agreement? It's actually a document signed by the new president of SNC and by the top investigator to enforce the Elections Act to say, we won't charge you, SNC-Lavalin, for what you did as long as you promise not to do it again. And so, you know, they write, we promise not to do it again. We've made all these changes and we fired all the old people and we're a good

company now. So essentially, the election commissioner finds that SNC-Lavalin is partaking in this scheme. And the election commissioner says to SNC-Lavalin a few years later, look, sign this document, say you're never going to do this again, then we're good. Yeah, and they promised not to charge SNC-Lavalin for really what amounted to a scheme that operated over several federal elections, liberal leadership campaigns, and Montreal-area ridings. This was not a one-off. This was a plan in place that went on over a period of several years. And still, they were promised no charges.

Let's talk about who we know now who made these donations because of your reporting, because of these documents that you've received. Because of your reporting, because of these documents that you've received. Right. And so, you know, we had the impression maybe that there were supposed to be, you know, low-level employees who were kind of coerced into making these donations. And what you see in that list is this is the most senior people at SNC-Lavalin at the time. These are executive vice presidents and vice presidents, and they're making the donations. They're making the donations. But one of the names that stood out right away for us was a name Kathleen Weil. And she's a spouse of an S&C, former S&C executive, Michael Novak. And she's a current sitting member of the National Assembly in Quebec.

She's a former justice minister and attorney general. So that's obviously a pretty important name. We called her and she denied any knowledge of it. She said she was never told their name was going to be on this list and she's never been, you know, a straw person for any company. All gifts that I've made to political parties in my life have been by conviction. Conviction because I believe in political parties. I would never make a donation under those conditions. It's not who I am. Not who I am. Now he told us he did not get any bonuses and that if he did, it would have happened without his knowledge. And he made the argument,

he got all kinds of bonuses as a vice president. And what about some of the other people on the list? Well, again, we have Michael Novak was on that list. Other senior executives who the company now says are no longer there, but at the time were very important players in S&C Laveland. We did talk to two people who were more junior. And what was interesting to us was a lot of the senior executives would either hang up on us or others just denied any involvement whatsoever. And of course, that's possible. But these two more junior employees were actually quite open. And they said, of course, there was this scheme. We were actually told that we were going to get a bonus that was twice the amount of the amount we donated to the political party

because we'd be taxed on the bonus and we'd have to get more money for the bonus to compensate for the... So they were very clear. They believed that the former president, Jacques Lamar, had signed off on the scheme. So it was really interesting to us that the more lower-level people on that list were actually more open and willing to talk about this scheme that they really said happened. Just one more time, to be clear, these senior executives, when you're reaching out to them, they're saying that this is not true.

Well, they're either A, hanging up on us, which happened a lot, or they're saying this is not true. One executive, for example, said to us, look, I know it was true for others. I personally did not participate in it. Okay. And is it fair for me to say that obviously SNC-Lavalin admitted that something untoward happened here because they've signed this compliance agreement? And so I suppose the obvious question is, is that normal? Is it normal for an elections commissioner to say, look, sign this agreement saying that you did something wrong and we'll all move forward? You know, I guess one question is what's normal and the other might be, well, what's appropriate? But we do know from our research that when this word, you know, compliance agreement was added to the Canada Elections Act, we were told for minor violations of the act.

And this was never intended for the kind of serious, ongoing violations that we saw in the SNC-Lavalin scheme. So there's a lot of questions we still have, really, about why was this offered? And people have said to us, like, why wasn't a message sent? Because, you know, no one likes to go to jail. And people have said to us, if the commissioner acted strongly here and charged more than one person, there might have been a message to other companies that might be doing this that it's time to stop. Right. And we should say one person was charged, a man named Norman Morin, right? Elections Canada is charging Norman Morin, a former exec at SNC, for soliciting

illegal political contributions over a period of seven years. Exactly. And, you know, in our investigation, me and Frederic Zeylak, who's with Enquete, we got a hold of him, Frederic did. And what he said to us was he also was surprised that he was the only one. We'll be back in a second. Discover what millions around the world already have. Audible has Canada's largest library of audiobooks, including exclusive content curated by and for Canadians. Experience books in a whole new way,

where stories are brought to life by powerful performances from renowned actors and narrators. With the free Audible app, you can listen anytime, anywhere, whether you're at home, in the He, like, came to me when I saw your story today was the Dean Del Mastro case. He, like, went to jail. Former Conservative MP Dean Del Mastro was convicted of violating the Elections Act. A big part of Del Mastro's old job was handling questions for the prime minister on issues like ethics and accountability. But today the judge said Del Mastro's decision to overspend more than $20,000 on his 2008 election campaign and then try to hide it was an affront to the principles

of our democratic system. We all saw him in handcuffs. I remember if you remember that, this was a few years ago, but for the first time a member of parliament, well he was no longer a member of parliament, but seen in handcuffs going to jail after being convicted under the Canada Elections Act. Move to your left please. It is a sad spectacle. Dean Del Mastro in cuffs, fallen so very, very far. You know it's interesting you asked me that question because we actually called his lawyer and we said when you look at these cases and we, you know, there's public documents available and his lawyer Jeff Ayotte said, when you look at these cases, and you know, there's public documents available, and his lawyer, Jeff Ayotte, said, my client was in one riding, in one election. And on the SNC case, you've got several ridings, several elections, several leadership campaigns. You think that the more serious, more deliberate,

more long-term, more sophisticated scheme involving more money and more candidates and more elections would be prosecuted, while the relatively minor one would get the compliance agreement. But just the opposite happened. And I want to ask you about the total amount of money here. So $110,000 is how much SNC-Lavalin is alleged to have given to the Liberal Party, which then the Liberal Party was made to give back. So when you compare it to these other cases, Dean Del Maestro, is this a lot of money in the grand scheme of things? Well, the Dean Del Maestro case was much smaller money.

And, you know, $100,000 is money. It's not into the millions. it's money, it's not into the millions. I think as we move forward, our question is going to be, you can see in the Canada elections database, because all donations are public now, way more donations coming from employees of SNC level than just $100,000. The question one might ask is, well,

was only a small percentage of them given bonuses and therefore made illegal, or is it bigger than that? And I think there hasn't been a full and thorough investigation at the federal level of just how prevalent this practice was, not only within SNC, but within other companies. Right. I just want to be clear about one thing. The election commissioner makes this decision for the company to sign a compliance letter. this decision for the company to sign a compliance letter. But is there any suggestion that he was politically influenced to make this decision? Yeah, I don't think so. I mean, we can see that

he also gave a compliance agreement to another company that had donated equally to the conservatives and liberals. As an investigative journalist, I think we're seeing more an issue here of transparency and are you holding people accountable for their actions? And I think that's not a favoring one political party over another. That's a, are we making sure when there's a law that says you can't, as a company, hide behind the fake bonuses? You can't do it. Are we sending a message or not? You know, what we're hearing from the critics is that message is not being sent. And if it's not being sent, it's going to keep on happening. I want to try and connect some dots between this and what has been playing out in the SNC-Lavalin scandal over the last several months. So all of this happened, these allegations of illegal political donations around the last election.

And something that we also know is that around this time, SNC was facing unrelated criminal corruption charges for alleged bribery of the Gaddafi regime in Libya in exchange for contracts there. RCMP say those contracts were for infrastructure projects in Libya worth hundreds of millions of dollars. And we now know that SNC was lobbying to get something called a deferred prosecution law to get put on the books. And that law did get put on the books last year. And when that law passed, they pushed to get the deferred prosecution agreement for themselves. We checked out the lobby registry and it shows over 50 communications between SNC-Lavallee and the government dating back to just the start of 2017.

And this is obviously what led us to this scandal for me to intervene in the decision of the Director of Public Prosecutions in this case and to pursue a deferred prosecution agreement. Are there any dots to connect here? Is there a connection between the SNC donations and their lobbying efforts to get this deferred prosecution agreement? Rather than dots right now, we have serious questions about relationships. And I think that's the fundamental issue here is there are existing relationships. So the first relationship is SNC-Lavalin employees are donating all kinds of money to the federal Liberal Party in this situation. We now know that SNC itself was reimbursing those amounts illegally.

That's a relationship that exists. The party is saying, look, we knew nothing about it, but we do know that the money was being given to them. So there's a whole relationship there we don't really understand. And then, of course, at the same time, we have SNC-Lavalin lobbying the Liberal government for this DPA to get around the bribery trial. So we have essentially the same people in different relationships interacting. And that gets really muddy really fast. Right. So I think the question you asked is the one we're going to be looking at, which let's untangle all this and say, well, are they connected?

Are they separate? How can they be separate? These are the same people we're talking about. Arvi, thank you so much. Thank you so much. Harvey, thank you so much. Thank you so much. So yesterday, Prime Minister Justin Trudeau faced questions about these illegal campaign donations.

He says the Liberals would not accept donations like that today. When we came to power and when I became leader of the Liberal Party, we made significant changes to the fundraising regime. We may have moved forward on transparency and openness, and that is not what happens anymore. That's all for today. 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.

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