Mr. Speaker, I rise today to address the cover-up budget. Now of course the Liberal government is heading into an election. I hear applause from across the way, but I am not sure they will be applauding after they get the verdict of the people. A “verdict” is an appropriate term, though, because of course we are dealing with a very serious set of allegations and apparent corruption emanating from the SNC-Lavalin scandal.
I call it the cover-up budget because the government has decided to use the old Kathleen Wynne three-step. Step one is a massive scandal. Step two is massive deficit spending to distract from it, and step three is massive tax increases after the election to pay for it all. We know that the Kathleen Wynne three-step was designed by none other than Gerald Butts, the former PMO puppet master who recently resigned in disgrace over the SNC-Lavalin scandal.
Going into this budget, the government was obviously overtaken by the public frenzy around revelations that the Prime Minister interfered in a criminal trial to help a Liberal-linked company get off charges. The Liberal government splashed $41 billion of new spending around, in order to distract from it all. The Liberals will be quick to point out that $41 billion is just if one uses cash accounting. We can use accrual accounting and it works out to $23 billion.
However, the bottom line is this. The Prime Minister has broken his promise of balancing the budget this year. He is planning, in fact, to add even more to the national deficit next year. All of this is part of a scheme to spray billions of dollars at Canadian voters to distract them from the scandal before the election and then raise their taxes to pay for it after the election.
In order to understand the cover-up budget, one needs to understand the scandal that it attempts to hide. Let me turn my attention now to that. Before I do, though, I will point out that we are returning full circle because this scandal started with the last budget. The government introduced budget 2018, which made vague reference to addressing corporate crime. It seemed to be rather benign, possibly even something that all parties could support. Everyone is against corporate crime after all, or so we thought.
Then when we were sitting in a finance committee meeting, nearing midnight, going through the nearly 500 pages of omnibus budget legislation that flowed out of the 2018 budget, we stumbled on something that surprised us. It was an amendment to the Criminal Code. Everyone in the room was shocked, including the Liberals.
The Liberal member for Hull—Aylmer looked at it and said that it did not smell right and looked like we were giving a “slap on the wrist” to large-scale corporate criminals. I could paraphrase a colourful quote. He said, “if I steal $10, I'm in trouble, but if I steal $10 million, I can work this out”. That was the impression he got from amendments the finance minister introduced to the Criminal Code in his budget.
The chairman of the committee, a lifelong Liberal and a devoted partisan member, said on the record that he thought it was inappropriate that such an amendment to the Criminal Code would find its way into a budget bill and that we would discuss changes to criminal penalties at the finance committee rather than at the justice committee where the Criminal Code is normally debated and addressed.
Throughout all of this debate, the question mark that kept appearing in everybody's mind was who was asking for this. Why were they trying to amend the Criminal Code in the budget? Who is behind this change?
Obviously, somebody must want it, or the government would not have gone through so much trouble to draft such an amendment. We would find out later on exactly who was driving this change. It was SNC-Lavalin.
A story appeared in February, in The Globe and Mail, saying that the Prime Minister and his team had personally and politically interfered with the former attorney general in order to get her to extend a special deal to SNC-Lavalin that would shelve the charges of fraud and bribery in order to allow the company to go on with business as usual. Budget 2018 had made that possible. It had created something called deferred prosecution agreements. Essentially, these agreements allow companies to avoid trial or prosecution, and even conviction, if they fess up, apologize, pay a fine and promise not to do it again.
Of course, if a homeless guy is charged with stealing a loaf of bread, he has no similar approach he can take. He cannot simply knock on the Prime Minister's door and ask if he would mind calling the Attorney General, who will call a Crown attorney and agree to set aside the charges as long as the guy gives back the bread and promises not to steal it again. That does not exist for other people. However, the Liberal government has created this special deal available to powerful corporate criminals in cases, apparently, like this one.
The amendment to the Criminal Code gave very specific criteria against which any corporation's desire to have such a deal must be judged. Canada's top prosecutor, known as the director of public prosecutions, considered SNC-Lavalin's request for such a deal against the criteria in the Criminal Code and the facts of the case. She concluded that SNC-Lavalin did not qualify for a deferred prosecution agreement.
Some of the factors she would have considered are the following. Did the company voluntarily tell authorities of its crimes? The answer is no. The company was caught when one of its officials was charged in Switzerland and ultimately found guilty of crimes in that country. That was what led authorities in Canada to learn that the crime had happened, not a voluntary disclosure from corporate executives to the Canadian government. Second is the severity of the offence. Was this a minor offence, an oversight or a small failing that could be treated with a minor penalty? The answer to that is no.
Let me turn my attention now to that particular issue. There has been this racist undertone to the story. People have said, sure, SNC-Lavalin might have bought prostitutes and other gifts for the Gadhafis. Sure, the Gadhafis got free yachts, but that is just the way things are done in those countries over there. People should just understand that if Canadian businesses are going to do commerce abroad, this is the kind of muck they are going to have to get into. So goes the argument.
This case is not just about the sordid examples of bribery, as disgusting as those are. It is also about fraud, which is the other allegation the company faces in Canadian courts in this particular matter, fraud of the Libyan people in amounts totalling $130 million. I do not know about you, Madam Speaker, but I think that stealing from poor people is a pretty miserable way to make money, and our justice system should not treat such crimes as minor affairs because “that is just the way things are done over there”.
The reason so many of these countries are so poor is precisely because of such parasitical corruption that drains the national wealth, empties the pockets of taxpaying citizens in those countries without giving them anything in return, forces them to pay every time they want to go about their business and live their daily lives, and creates a massive imbalance of power in favour of those who have money to pay bribes and against those who do not.
To those people who say that this is just the way things are done over there, we should never accept that this is the way things are done. That is why we signed on to international conventions against fraud and corruption, because we wanted to put an end to those practices so that the people in countries like Libya could turn their destinies around and build prosperous societies based on the honest and legal flow of commerce. As long as wealthy western corporations believe they can go with impunity into poor countries and bribe the leaders to steal from the people, those people will always live in poverty, and that poverty will be partly our fault if we are complicit in it or if we fail to punish those who carry it out.
The reason we have international conventions is that the traditional practice of many corporations was to go in, pillage and plunder, and then leave before local authorities could prosecute them, going back to western countries, where they continued to operate with impunity. In other words, if companies like SNC-Lavalin are not prosecuted over here, they will continue to carry out the alleged crimes we witnessed in this case over and over again, and countless people in the poorest countries in the world will forever pay the price.
We, as Conservatives, do not accept that this is the way business is done. We will ensure that while Canadian businesses should have the legitimate right to do well by doing good, to trade with the world, and to grow and prosper, they shall never make a buck by stealing from the world's poor.
Let me go into the specifics of the allegations of fraud and bribery that SNC faces in Canadian courts today, the specifics of the case that the Prime Minister tried to set aside by pressuring his former attorney general to sign a special deal with that company. I will go through it, starting with a quote by Global News:
In 2015, the RCMP charged SNC-Lavalin, along with its international division, with corruption and fraud in relation with their business dealings in Libya.
The RCMP said officials at the company attempted to bribe several public officials in the country, including dictator Moammar Gadhafi, as well as other businesses in Libya.
RCMP officials said SNC-Lavalin also lied to Libyan companies to defraud them of nearly $130 million.
The Financial Post wrote:
SNC and its subsidiaries SNC-Lavalin Construction Inc. and SNC-Lavalin International Inc. are also alleged to have defrauded various Libyan public agencies of approximately $129.8 million.
I quote further from the Financial Post:
According to police, Ben Aissa established a scheme in which two companies, Duvel Securities and Dinova International, billed SNC roughly $127 million for helping the firm win dozens of major contracts in Libya during the 2000s. In fact, Swiss and Canadian police say, Duvel and Dinova were shell companies controlled by Ben Aissa. The money—including US$1.5 million spent on a yacht for Saadi Gaddafi—was used to bribe Libyan officials and pad the bank accounts of Ben Aissa and Mr. Bebawi, who left SNC in 2006.
I quote from Global News, again:
In Switzerland, an ex-senior employee from SNC-Lavalin pleaded guilty to fraud, corruption and money laundering in relation to his business in Libya in 2014—before the RCMP charges. Riadh Ben Aissa acknowledged in court that he bribed Saadi Gadhafi, son of Libya’s late dictator Moammar Gadhafi, so SNC could win contracts.
I quote from the National Post:
Receipts gathered during an investigation of a former SNC-Lavalin executive show $30,000 in payments to Saadi Gadhafi for sexual services in Canada.... Transactions they wrote in as “companion services” in their expense reports would cost between $600 and $7,500 each. Close to $10,000 in services went to a single escort service in Vancouver. Other payments went to a Montreal strip club and covered events at the Air Canada Centre in Toronto, such as box seats for a Spice Girls concert.
It is very easy to dismiss some of this salacious bribery as just part of a broader soap opera, that obviously the participants in this behaviour might be morally corrupt themselves, but at the end of the day some will ask, “What is the overall problem that we are trying to address?”
I would bring attention back to the earlier excerpts that I read, and I am going to read it again. The reason for all this bribery was so that SNC could defraud various Libyan public agencies of $130 million. In other words, they delighted the pleasures of top Gadhafi family members as a means to an end, and the end, of course, was to steal $130 million from some of the poorest people in the world.
Let us all agree never again to refer to these alleged crimes as victimless crimes. They are not victimless crimes. There are people living in squalor in other parts of the world because crimes like this take place.
I list all of that chronology in order to address the criteria in the deferred prosecutions section of the Criminal Code, which says that such agreements will be available only when the severity of the crime is limited. In other words, if it is not a serious crime, if it was a mistake with limited consequences and minimal damage to any victims, the government is then entitled to enter into a negotiation with an accused corporate criminal in order to resolve it through a deferred public prosecution agreement.
Based on what I have just read to you, Madam Speaker, I think you will agree that this was not a small, petty crime. This was a serious, egregious and systematically executed crime carried out against the Libyan people. Therefore, on that basis, SNC did not qualify for a deferred prosecution agreement, if we are reading the act as it is written.
The next criterion in the act that determines whether the top prosecutor should enter into negotiations with an alleged corporate criminal for a deferred prosecution agreement asks the prosecutor to consider whether this was an isolated incident.
I ask, was this behaviour by SNC-Lavalin an isolated affair, or was it part of a pattern of behaviour? Was it just a few rotten apples in a faraway land who did some dirty dealings and had no link back to Canada? Well, obviously, the answer is no.
While these charges I am about to read have nothing to do with the deferred prosecution agreement the Prime Minister sought, they do speak to the Criminal Code criteria on whether or not the company has a systematic history of corruption or whether this was an isolated case. Again, I read from Global News, which said:
...three top executives were also charged with bribery in relation to the McGill University Health Centre. Former CEO Pierre Duhaime, along with McGill officials, pleaded guilty in the case.
A company that tries to rob people in faraway lands might just do the same back here at home. In other words, those people who comfort themselves by saying “Sure, they're ripping off other people, but that doesn't cost us any money” had better actually check the facts, because from a rotten tree comes nothing but rotten fruit, and we have paid the price here in Canada for that corruption, as evidenced by the guilty plea of the company's former CEO. This is not a junior intern who stole a candy bar; this is the top official in the entire company.
Again, Global News stated that:
Quebec prosecutors are working with the RCMP on the possibility of new criminal charges against SNC-Lavalin tied to a contract to refurbish Montreal’s Jacques Cartier Bridge, court documents show.
Here we have it again: more corruption involving major Canadian infrastructure projects. Of course, the state of our dilapidated bridges in many parts of this country is well known. In Montreal, it is especially the case, and when the people of Quebec and Montreal suffer the consequences when corruption by companies like this descends upon major projects that affect their daily commute demonstrates that corruption does not come without a cost.
Global News continued:
In court documents, the RCMP lays out a bribery scheme involving a $127-million Jacques Cartier Bridge contract in the early 2000s. Former federal official Michel Fournier pleaded guilty in 2017 to accepting more than $2.3 million in payments from SNC-Lavalin in connection with the project.
Again, we see that this corruption does not have borders, that we are not immune from the effects of a company that decides it is going to buy its way to public contracts rather than earn those contracts on merit.
Further, Global News wrote that:
In 2011, an SNC employee whose job was to facilitate travel of SNC employees in and out of Libya was arrested in Mexico and accused of attempting to smuggle Gadhafi’s son and family out of the country. The employee was eventually released from jail and not charged in Canada.
As well, the Global News article stated:
The company was also banned from bidding on projects by the World Bank for 10 years over alleged misconduct during a bridge construction contract in Panama.
Now we are in Panama. We have gone from Libya to Montreal and now to Panama.
The article continues:
During an investigation from CBC and the Globe and Mail, it was alleged there was an internal accounting code for bribes.
Let us remember that I said one of the criteria for getting access to a deferred prosecution agreement is that the alleged corporate criminal had no other track record of corruption, that the alleged incident was an isolated one and that it was completely out of character. All of us agree that the justice system should take that into consideration as a mitigating factor.
Indeed, we all know stories of a youngster who makes a one-time mistake that is completely out of character. The justice system looks at the person and says that this is not who the person is and administers a punishment that allows for the very quick restoration of that person as a member of society.
That is why we have proportionality in the system and that is why deferred prosecution agreements are supposed to be judged on the basis of whether the company in question engaged in an isolated incident or whether it was systematically part of the company's overall character. That excerpt answers the question. Not only were they engaging in bribery, but they had also developed an internal accounting code for it.
Imagine the trouble we would have to go through, the participation we would have to have from various members of the accounting system, in order to develop a whole code. It is not just corrupt activity; it is then corrupt coding in order to process that activity. A code would be a system and system is the root of systematic. This is systematic corruption, and any government that would attempt to give a systematically corrupt company the ability to avoid prosecution has to answer for its own ethics in the process.
It is interesting that this attempt was made by the government across the way, because Liberals know something about SNC's corruption. They participated in it. According to the Commissioner of Canada Elections, SNC-Lavalin gave approximately $100,000 of illegal donations to the Liberal Party. The commissioner, for reasons that are unknown to me and that I still cannot understand, decided not to pursue the allegations through a full criminal conviction but instead signed an agreement, basically a compliance agreement.
In that agreement, the company admits not only that it flowed $100,000 to the Liberal Party but that it did so in a manner that was absolutely systematic, almost on an industrial scale. It was having employees manufacture phony expense claims and was giving out phony bonuses. It then communicated to employees that they had to then take the money they were receiving fallaciously and hand it over to the Liberal Party in the form of $100,000 in donations.
We all know the donation limits at the time were about $1,200. In other words, no person could give more than about $1,200 per year and no company could give any donation at all. Unions and corporations were and are banned. The executives created a bunch of phony bonuses and a bunch of phony expense claims, with phony receipts, and then SNC executives would then flow that money to the Liberal Party.
That is systematic, premeditated, carefully planned out corruption. Once again, with the Liberal government in power, there was no prosecution of the offence. It was simply signed off by the elections commissioner as a compliance agreement. The money was returned and they were allowed to go on without any consequence.
It seems that wherever SNC and the Liberals interact, there is a special deal. At the City of Ottawa, the company has been given the contract to extend the transit system to the south end of town, a project I strongly support and which I championed. The company did not apparently meet the technical requirements that are necessary, even though some of their competitors did, but somehow the company won the contract anyway.
My point in raising all of these examples is to demonstrate that contrary to the requirement that deferred prosecution agreements should only be made available to companies for whom the alleged offence is an isolated incident, SNC-Lavalin has shown systematic and repetitive acts of corruption, most of them related to fraud and bribery. In other words, the director of public prosecutions was absolutely right to refuse the company such an agreement.
However, that was not good enough for the Prime Minister. He introduced an amendment to the Criminal Code through his omnibus budget specifically so he could help SNC-Lavalin. This company had lobbyists swarming all over Parliament Hill. It had made direct contact with top officials in the government. The chairman of SNC-Lavalin, Kevin Lynch, a former clerk, called the present-day clerk. There were dozens of registered lobbying interactions between top company officials or other lobbyists and high-level members of the Liberal government.
The Prime Minister said he was going to get it done one way or the other for this company. When he learned, presumably in early September, that the top prosecutor had informed the company that it would not be availed such a special deal, he then thought it was not a problem, he would call the former attorney general, she would overturn the prosecutor, there would be a deal for SNC-Lavalin and we would get back to business as usual. That was the plan.
In fairness, that is how things have worked for SNC for a very long time. The Prime Minister had every reason to think that would work. However, he encountered a problem that he did not expect to find in his own cabinet, a person with principle, someone who understood the law and viewed it as her job to respect the law. The Prime Minister assumed that if he made clear to her the political imperative, she would find a way to cast the law aside and overturn the top prosecutor in the land to offer a special deal to SNC-Lavalin in its $130-million fraud and bribery case. She said no. She looked at the act and said that clearly the company did not qualify for a deferred prosecution agreement. Furthermore, it would literally be unprecedented for an attorney general to overturn a decision of the independent prosecutor and she said she would not do it.
She thought that would be the end of the story. Ultimately, it should have been. The government should have said that it had a very qualified attorney general, who has experience as a prosecutor and a meticulous understanding of the law, who had looked at the act and concluded that the top prosecutor was right and the company does not deserve a deal. That is where the story for the political actors ends and where the independent judicial process carries on.
Before I go any further, for the listeners out there who might not be aware of how strict the separation between politics and the courts is, let me give them a few examples.
The former Quebec premier, Jean Charest, was a member of this House and a minister in the Mulroney government. He very innocently called a judge one day about a case. There was no corrupt intent. He simply called because he thought he was advancing the public interest. Do members know what happened to him? He resigned. He was done.
In the previous Conservative government, former minister John Duncan received some input from a constituent about a case that was before a quasi-judicial board. He had no personal interest in it. The constituent was raising a legitimate grievance about how he had been treated in the process. As an MP, he thought he would call the quasi-judicial board and make an intervention to help his constituent. Again, he had pure motives and a legitimate desire to help a fellow Canadian. There was nothing untoward or corrupt. Do members know what happened to him? He resigned. Why? Because we, in this country, accept a strict division between judicial bodies and political bodies.
It is absolutely strict. It is so strict that everything we say in the House of Commons is exempt from being admitted in a court of law against the people who spoke it. The principle, of course, is that just as politicians do not interfere in the courtroom, judges do not interfere in the House of Commons. There is a strict separation.
I provide this as background so that when we describe, as I am about to do, the relentless effort by the Prime Minister and his team to interfere with a criminal court proceeding, everyone is aware of just how rare and inappropriate this is. If it is a resigning offence for a minister in the previous government to call a quasi-judicial body about a constituent's concern, surely it is a resigning offence for the Prime Minister of Canada to carry out a consistent and sustained campaign of interference with his Attorney General to stop a $130-million fraud and bribery case from going ahead. However, that is exactly what he did.
I am going to relay the story of his interference not from the vantage point of a Conservative or a New Democrat or even of an angry anti-Liberal journalist, if there is such a thing, but from the the vantage point of Liberals themselves. Remember, all of the allegations in this scandal come from the Prime Minister's cabinet. This is what makes the scandal so exceptional. Normally governments are criticized or accused of things by members of the opposition or the media. In this case, the allegations all come from people the Prime Minister thought enough of to put them in charge of major government departments.
What did these people say? The former attorney general, someone the Prime Minister entrusted with the top law office of the land and eventually entrusted with the care of our veterans, said that the Prime Minister and his team carried out “sustained” and “consistent” interference, that she experienced “veiled threats”, that she was hounded and that the entire campaign reminded her of the “Saturday night massacre”, a reference to Richard Nixon's mass firings in the Watergate scandal. Again, to the Liberal MPs rolling their eyes on the other side of the House, these are not hyperbolic allegations from the official opposition; they are words from the Liberals' own former attorney general.
Of course, as the Prime Minister said, she could not possibly be believed. His senior staff members have lined up to undermine her credibility and suggest that she was just angry because she lost her “dream job”, as Gerald Butts called it. The only problem, which is a big problem, is that she kept records of what happened. She kept notes, texts, and other contemporaneous documents, and of course, she has audio recordings to prove it all.
Why would she have recorded a conversation with the Prime Minister's top public servant on this matter? It is because in September, October and November, she had been hounded—