SNC-Lavalin affair began with 2016 meeting between Trudeau, company

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The seeds for the SNC-Lavalin affair were sown more than three years ago. In early 2016 − long before the resignations and caucus ejections of this year − Prime Minister Justin Trudeau and a senior adviser met with the Quebec engineering giant’s then-CEO. They discussed the company’s legal woes and the potential fallout should it be convicted of fraud and bribery.

The meeting, which has not been publicly disclosed until now, is among a series of startling revelations contained in the report released Wednesday by federal Ethics Commissioner Mario Dion. Many of the actors in the SNC-Lavalin controversy have given a public account of events as they saw them, whether through press conferences, written statements or testimony before the House of Commons justice committee that probed the matter earlier this year. And yet, much is revelatory in the report, based on the testimony of 14 witnesses − including, for the first time, Mr. Trudeau − and the examination of hundreds of pages of evidence.

Trudeau violated ethics law by pressing Wilson-Raybould over SNC-Lavalin deal, Ethics Commissioner rules

Among the findings:

* Consistent communications between top government officials and SNC-Lavalin representatives that grew more intense at key legislative and corporate junctures, including as it related to board meetings and fluctuations in share price.

* A lobbying effort that reached into Switzerland and China.

* The involvement of three former Supreme Court judges, including two who provided outside legal opinions that were shared with cabinet ministers, unbeknownst to the former attorney-general.

* The introduction of new players, including former Treasury Board president Scott Brison, who is now a vice-chair at the Bank of Montreal, and BMO chairman Robert Prichard, who is described in the report as legal counsel for SNC-Lavalin.

* There was also the revelation that others, namely Finance Minister Bill Morneau, played a more significant role than previously known in the effort to avoid a conviction for SNC-Lavalin.

The commissioner’s investigation concluded that Mr. Trudeau contravened a section of the Conflict of Interest Act by using his position of authority over then-attorney-general Jody Wilson-Raybould to try to get her to override the decision of the independent Director of Public Prosecutions to proceed with a trial in the SNC-Lavalin case.

The report offers the clearest picture yet of what happened when, and who, exactly, did what.

The story begins in early 2016, with the Prime Minister’s meeting with Neil Bruce, at the time SNC’s CEO. Although a Globe analysis of the federal lobbying registry published last month showed that the company registered 81 interactions with government officials on the issue of “justice and law enforcement” between early 2016 and early 2019, the company’s meeting with Mr. Trudeau is not listed. (The company registered a Feb. 18, 2016, meeting with Mathieu Bouchard, the senior PMO adviser.)

In his meeting with Mr. Bruce, Mr. Trudeau learned of SNC-Lavalin’s desire for a made-in-Canada legal tool that would allow prosecutors to suspend criminal proceedings against companies charged with white-collar crimes in exchange for a negotiated settlement. This is often referred to as a deferred prosecution agreement (DPA). Around this time, Mr. Trudeau told Mr. Bouchard to pay attention to the SNC-Lavalin file and “identify existing levers that could lead to a positive outcome for everyone.”

Given the task of keeping an eye on the SNC-Lavalin matter, Mr. Bouchard started seeking information on DPAs from officials in various federal departments at the beginning of 2016. The PMO also asked the Privy Council Office to organize multi-departmental meetings to discuss the concept of a DPA regime “as well as SNC-Lavalin’s legal issues,” the report says. While it was previously unclear what prompted the 2017 public consultations on the potential enactment of a DPA law, the report says it was at these meetings that a consensus emerged that Ottawa would run a consultation process on the matter.

Soon after the consultation process closed in December of 2017, Mr. Bruce met with the Finance Minister and his policy director, Justin To, while in Davos, Switzerland, at the World Economic Forum. This Jan. 23, 2018, meeting, which had been requested by SNC-Lavalin representatives, is not listed on the federal lobbying registry and has not been publicly disclosed until now. (Only arranged conversations must be logged. It is the lobbyist that must register the conversations. There is no evidence that SNC-Lavalin did anything illegal in its quest for a DPA.)

SNC-Lavalin would not comment on the commissioner’s findings and declined to say why it did not log its 2016 meeting with the Prime Minister on the lobbying registry.

Mr. Morneau told the commissioner that while he did not recall what was discussed, he believed that the company would have raised its desire for a DPA law. Mr. To provided more details, based on a conversation he had with the Finance Minister about the meeting: “According to Mr. To, Mr. Morneau generally noted SNC-Lavalin’s view that the government should proceed with the implementation of a [DPA] regime ... Mr. Bruce described potential negative economic impacts if SNC-Lavalin were unable to reach a remediation agreement.”

Mr. To met again with Mr. Bruce in Ottawa on Feb. 2, 2018 − another meeting that does not appear to have been registered. Here, the company presented Mr. To with a confidential document that said, among other things, that the implementation of a DPA regime would increase the chances of the company maintaining its head office in Canada. (The commissioner’s report notes that, according to a 2017 article in Le Devoir newspaper, SNC-Lavalin agreed to the Caisse de depot’s terms of financing for an acquisition that said the company had to maintain its headquarters in Montreal for the subsequent seven years).

Later that month, the Liberals announced through their budget plan that a DPA law would be forthcoming. On Feb. 2, 2018, even before the consultation results were announced, SNC-Lavalin presented finance officials with “the possibility of including the [DPA] regime in the 2018 budget implementation bill as a means to expedite the process.” Hasty passage was in the company’s interest, given that a trial on the fraud and bribery charges was looming. As a Globe investigation revealed last month, Ms. Wilson-Raybould questioned the effectiveness of DPAs and was concerned that they were being pushed by a powerful company with a history of legal issues. Ms. Wilson-Raybould, The Globe reported, wanted nothing to do with the legislation and certainly did not wish to take the lead on it. She did not appear before the finance committee studying the budget bill, nor did she accept an invitation from the Senate legal affairs committee to testify on the matter.

Come mid-August, Mr. Morneau’s office continued its efforts on the SNC-Lavalin file. Ben Chin, who was at the time the Finance Minister’s chief of staff and is now a senior PMO adviser, contacted Ms. Wilson-Raybould’s then-chief of staff, Jessica Prince, to discuss the company’s situation. This meeting, too, was previously unknown, as Ms. Wilson-Raybould’s testimony before the House justice committee studying the SNC-Lavalin affair covered the period beginning in early September of 2018.

At this meeting, the report says, Mr. Chin stated that he had been speaking with SNC-Lavalin and that the “company’s perception was that the process of negotiating a remediation agreement was taking too long.” He asked whether anything could be done to expedite the process. By now, the DPA legislation had not yet even come into force. It would become law on Sept. 19. In a follow-up e-mail, Ms. Prince informed Mr. Chin that the Public Prosecution Service of Canada had previously told Ms. Wilson-Raybould’s staff that they could not seek an update on the file; simply asking for an update, Ms. Prince wrote, would be perceived as − and might well be − improper political interference. Mr. Chin forwarded the e-mail to Mr. Morneau and Mr. To. The Finance Minister told the commissioner that he did not recall reading that e-mail.

The pressure campaign continued even after Sept. 4, when Ms. Wilson-Raybould was informed of Director of Public Prosecutions Kathleen Roussel’s position that SNC-Lavalin would not be invited to negotiate a DPA. This is well-known, and was documented before the House justice committee, albeit with competing perceptions of the events articulated by Ms. Wilson-Raybould and then-clerk of the Privy Council Office Michael Wernick as well as then-principal secretary to the Prime Minister, Gerald Butts.

What was not definitively known, however, was the Prime Minister’s reaction to Ms. Roussel’s decision. The report states that Mr. Trudeau was “puzzled" by the development because, in his mind, “SNC-Lavalin was precisely the kind of candidate for which the [DPA] regime was designed: one that had taken significant steps to reform itself and whose conviction would harm many people who had not been involved in the wrongdoing.” Mr. Butts, the report says, would later tell Ms. Prince that the government had created the DPA law for SNC-Lavalin’s benefit.

Mr. Trudeau asked his staff for “existing options to move the file forward." He also told the commissioner that he would have advised his staff that it was important for Ms. Wilson-Raybould to take into consideration the potential negative impact on Canadians − an allusion to the economic impact of a conviction, which could lead to a 10-year debarment from federal procurement and job losses. The DPA law, as passed, outright bars prosecutors from considering the “national economic interest” in cases of alleged foreign bribery.

Mr. Morneau’s office snapped into action, too. As a result of Ms. Roussel’s decision, senior Finance and PMO staff contacted Ms. Wilson-Raybould’s office to discuss what, if anything, could be done. Like Mr. Trudeau, Mr. Morneau was “extremely surprised” by the director’s decision. He told the commissioner that he did not believe Ms. Wilson-Raybould had done her “due diligence” on the matter.

Knowing that whatever course she took would be scrutinized by the PMO and others, Ms. Wilson-Raybould sought advice from several attorneys-general on the matter. But when it came to seeking advice on an actual prosecutorial decision − which would require allowing an outside person to access confidential information regarding the case − Ms. Wilson-Raybould was not on board. Seeking such advice, the report says, would have been unprecedented.

Much of what transpired in the ensuing weeks is on the public record, including a meeting between Mr. Trudeau, Mr. Wernick and Ms. Wilson-Raybould, at which the former attorney-general says the Prime Minister reminded her that he was a Member of Parliament in Quebec and Mr. Wernick brought up the impending election in that province.

The report, though, fills in some of the details. It says that the PMO and Finance officials who raised concerns with Ms. Wilson-Raybould and her staff were at the same time “engaging in discussions with SNC-Lavalin representatives and their legal counsel to assist the company in finding solutions in order to initiate negotiations toward a [DPA]." For example, according to SNC-Lavalin, the company presented a draft PowerPoint document to Finance officials, who “suggested possible additional factors relevant to the public interest.” The PowerPoint presentation also outlined a “Plan B," which would be executed should the company not be invited to negotiate a DPA.

And while SNC-Lavalin was soliciting meetings with government staff, at least one of those interactions came at Mr. Morneau’s own request − a new detail in this chain of events. The Finance Minister told the commissioner he does not recall whether Mr. Bruce, who stepped down as the company’s CEO in June, asked that he or anyone in his office take actions on SNC-Lavalin’s behalf.

Also new to this narrative is the involvement of Mr. Brison, who was at the time Treasury Board president but was in February named a vice-chair at BMO. In mid-October, the report says, Mr. Brison met on an unrelated matter with Kevin Lynch, a former Privy Council Office clerk who is one of BMO’s vice-chairs and is also now SNC-Lavalin’s chair, and Mr. Prichard, the BMO chairman who is described in the report as legal counsel for SNC-Lavalin. According to the report, Mr. Brison said Mr. Lynch and Mr. Prichard raised SNC-Lavalin’s position on DPAs.

By November, SNC-Lavalin ratcheted up its communications with government officials, the report says. The company prepared two legal opinions, including one by former Supreme Court justice and SNC-Lavalin legal counsel Frank Iacobucci. Mr. Iacobucci’s opinion outlined the legitimacy for Ms. Wilson-Raybould to intervene in criminal matters. The report reveals that while the legal opinion was shared with several cabinet ministers, it was not provided to Ms. Wilson-Raybould.

Ms. Wilson-Raybould also told the commissioner that she did not see a second legal opinion crafted at the behest of SNC-Lavalin by former Supreme Court justice John Major. Mr. Major’s opinion centred on whether the failure of Ms. Roussel to provide reasons for her refusal to negotiate a DPA with SNC-Lavalin was unlawful and whether the refusal itself was unlawful. In new evidence to the commissioner, it has come to light that an SNC-Lavalin representative hand-delivered a copy of Mr. Major’s opinion to Mr. Chin and senior PMO advisers.

In further new evidence, the commissioner also reported that, at the request of SNC-Lavalin, Mr. Morneau and Mr. Brison each had a meeting with Mr. Lynch while they were in Beijing for a conference in mid-November. Mr. Lynch, the report says, described the company’s ongoing concerns about Ms. Roussel’s position. Mr. Morneau told the commissioner that Mr. Lynch “may have brought up the idea” of having former chief justice of the Supreme Court Beverley McLachlin act as a third-party expert on the matter.

At a meeting between PMO advisers and Mr. Prichard at the end of that month, Mr. Bouchard noted a proposal that had been suggested by SNC-Lavalin: that Ms. McLachlin would be asked to preside over a settlement conference between Ms. Roussel and SNC-Lavalin, and the government could appoint the former chief justice to support the negotiation of a DPA.

Mr. Trudeau testified to the commissioner that he had not heard of this idea, which only came to light in Wednesday’s report. Ms. McLachlin, the report said, expressed to Mr. Iacobucci some reservations with the proposal and said she did not want to be retained by the government. Ms. Wilson-Raybould said she was not aware of these discussions until the commissioner mentioned it to her in an interview for the report.

Although a dinner meeting between Ms. Wilson-Raybould and Mr. Butts, then-principal secretary to Mr. Trudeau, at the Château Laurier in early December made headlines across the country months ago, what is new in the commissioner’s report is this: After the dinner meeting, an SNC-Lavalin representative texted Mr. Bouchard and asked for an update ahead of the company’s board meeting the following day.

Soon after the Château Laurier meeting came the now-widely known call between Ms. Wilson-Raybould and Mr. Wernick, which the former attorney-general recorded and released as evidence to the House justice committee probing the SNC-Lavalin affair. For the first time, publicly, Mr. Trudeau addressed the controversial call, telling the commissioner that he never directed Mr. Wernick to speak to Ms. Wilson-Raybould in such stark terms, nor did he intend to threaten the former attorney-general.

But the Ethics Commissioner rejected that assertion, saying “it is difficult for me to imagine that Mr. Wernick would have acted without a full and clear appreciation of Mr. Trudeau’s position on the matter.”

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