trudeau-wilson-rayouldThere is a lot of hype around possible political interference in the prosecution of SNC Lavalin Libyan & Algerian bribery scandals involving Canadian Prime Minister Justin Trudeau, the Prime Ministers Office and former Canadian Justice Minister Jody Wilson-Raybould.  However, we want to know why the Canadian Government is still so aggressively going after SNC in the first place.

Karl Moore of McGill University explains in the video below that SNC Lavalin has already repeatedly admitted guilt and paid massive fines in various jurisdictions.

SNC is a global engineering giant based in Quebec (even though it has more employees in Ontario).  Is it reasonable that the Canadian Government continue to pursue SNC so much more aggressively than Canada’s other first world partners already have?  The UK, France, Australia, the US and others accepted SNC’s admission of guilt, collected their fines and moved on.  More importantly, under their last two CEO’s SNC has cleaned up their culture by replacing both mid and top level management.

It’s not that SNC should not be prosecuted in Canada; it is the extend of that prosecution that is in question.

Most of the lawyers we have listened to indicate that the Canadian Federal Government could likely win the case against SNC using the old laws, which would see SNC admit guilt, pay massive fines AND be bared from bidding on major contracts for 10 years.  However, the new law is a Deferred Prosecution Agreement (introduced in Canada in 2008 under the then Conservative government of Steven Harper) that would see SNC submit to the same punishments BUT not be barred from bidding on new contracts.

If SNC has already cleaned up their business culture, will pay big fines and (most importantly for me personally) admit their guilt in writing, why should Canada block a Canadian company from doing business thereby triggering other countries to do the same?

The simple political math of that is:

  1. If Trudeau did not interfere, all is good
  2. If Trudeau did interfere, it was to SNC’s favor and that may win him votes in Ontario and Quebec

Skip the first minute of this video to get to the point:

Machine Translation of This Story:

It’s about 52000 employees around the world in a sense he has that they’ve agreed to admit wrongdoing personally prosecute the former CEO to back now is under house arrest. Another one there of former executives is in prison. But when you look at what the U.S. Australia the UK to France some of our key competitors in this industry they are take traditionally a more lenient or lenient approach than Canada’s doing. I think that is being a bit of a Boy Scout from a business viewpoint.

Now there’s the legal issue. You know ask a lawyer about this a political side where the Conservatives are making hay. So that’s all fine. But from a viewpoint of Quebec. This is someone this is a company creates love jobs not only Quebec but Ontario and elsewhere as well. And they’ve lost thousands of employees over the last few years because of the uncertainty overhanging it.

Great jobs that pay well that are challenging and take some of the great Canadian competencies around engineering and export them around the world as it it wouldn’t be go to going too far to say that Kobach looks at the issue and say well what’s the big deal why wouldn’t the federal government of any stripe be trying to help out SNC lifeline and champion while still recognizing everything that they have done.

What’s in this business 2008 this new approach came out and it’s one that was copy to a considerable degree from some of our competitors the U.K. U.S. France and so on. So people that we would be out there but countries that we feel are very much part of you know our world that we take a similar approach to law and to ethical issues. So this idea of a deferred prosecution agreement is one where it’s a way of addressing corporate crime. It’s new to Canada and part of it is to saying like you admit guilt and you move on more rapidly and at SNC for me hearing from multiple former students in the company I’ve had the former chief compliance officer come to class and as I mentioned the last four CEOs with the last two politically the one was arrested about 10 days after he came to class.

What it is is that they’ve cleaned up their act under Bob Card and Neil Bruce the people that caused this have been let go and they’ve got a high ethical standard there’s a point where you go there over it they’ve changed which is what we want and they paid penalties for the wrongdoing in the past. Let’s let them move on and compete and creep and grow jobs here in Canada.

Is there actually an opportunity for that to happen now given the political firestorm that we’re seeing in Ottawa. Can they actually get to a point I know that the justice minister the current Justice Minister said we’re still leaving the door open to that agreement but do you think they’ve actually get there.

Well one hopes so. I mean the current Justice Minister former law professor here at McGill who you know has been you know spent many many years in Montreal so knows SNC knows their circumstance well. You know from a viewpoint of someone living here and a conservative I understand that they you know they want to win the election and that’s fair enough. That’s their job to do that though you would think that a conservative business party would be perhaps even more friendly to business than a Liberal Party. You just you know philosophically but there’s a political and legal element a business element and those three mixed together from a business viewpoint to economics jobs you point.

It seems to make sense to follow the patterns of our key competitive home countries that have a similar legal system and be more lenient towards them because they’ve changed their ways and the guilty have been prosecuted to a very large degree.

All right Karl. Thanks for taking the time to share insight with us. My pleasure. Karl Moore is a Professor of Business Strategy at McGill University.


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