PMO, Minister of Justice and Attorney General; AG and SNC-Lavalin: The Possibilities

We don’t know yet what really the reality of the allegations that the PMO “pressured” (whatever that means) the former Minister of Justice and Attorney General to (in turn) tell the Director of Public Prosecutions to let SNC-Lavalin to enter into a “deferred prosecution agreement” rather than go to trial on charges of bribing officials (and engaging in fraud and corruption) in Libya is. There are a number of possibilities, ranging from “business as usual” to improper political interference that amounts to a breach of the rule of law. Let’s unpack at least some of those possibilities, relating them to information that we do know, as well as conduct that might have happened that didn’t.

Although we do not know the crucial point about these circumstances, we do know some things (I base my comments on reports in The Globe and Mail, the National Post and the CBC). We know that SNC-Lavalin faces trial for alleged bribery of Libyan officials between 2001 and 2011, that it claims to have “cleaned house” since then and that it has lobbied federal officials extensively, including the Prime Minister’s senior political adviser, Gerald Butts, apparently first for legislation relating to ways to avoid a criminal conviction and then to have the resulting provisions applied to it). (We also know that the Libya bribery is not the only instance of bribery by SNC-Lavalin executives, including in Canada; however, those cases are being addressed.)

We know that in September 2018, the government included a provision to allow “remediation agreements” (known also as “deferred prosecution agreements”) in its omnibus budget bill (the problems of omnibus bills must be left to another time), with a resulting Criminal Code section 715.3. No one disputes that this change to Canadian criminal law followed lobbying by SNC-Lavalin. We know that there was some discussion about allowing SNC-Lavalin to take advantage of a remediation agreement, which would require the Attorney General Jody Wilson-Raybould’s consent to the prosecutor’s decision to negotiate; we know that the Director of Public Prosecutions, Kathleen Roussel advised the company it would not be invited to negotiate a remediation agreement; and we know that SNC-Lavalin has brought an application to the Federal Court for judicial review of that decision on the basis that it has met the all the.conditions for negotiating an agreement and that not doing so risks the livelihood of thousands of workers; the director of public prosecutions, who did not provide reasons for refusing to issue the invitation (section 715.3 does not require her to do so), has responded by emphasizing prosecutorial discretion and independence.

We know the Prime Minister has stated that he placed no “direct” pressure on the former Attorney General to direct the Director of Public Prosecutions (DPP) to enter into negotiations with SNC-Lavalin to reach a remediation agreement and that subsequently, he has stated that he told her that it was her decision alone whether she so direct the prosecutor. Wilson-Raybould has refused to discuss the matter on the grounds of solicitor-client privilege. The Prime Minister has been urged by various sources to waive that privilege.

We know that there will be at least two “inquiries”, one by the House of Commons Justice Committee and one, at the NDP’s request, by the Ethics Commissioner.

We know a few other things, as well. We know that SNC-Lavalin is a major company in Quebec that benefits significantly from government contracts and that a conviction on the bribery charges would mean that it could not apply for contracts for 10 years. We know that Quebec is an important, if not crucial, place where the federal Liberals must win a high number of seats to be returned to office. We know a trial would likely extend into the next federal election.

We know that in the last Cabinet shuffle, Wilson-Raybould was shunted out of the Justice/Attorney General portfolio to languish in Veteran Affairs (not that care for veterans isn’t important, but it is not a high profile portfolio), despite having had a highly credible run as Minister of Justice. We know that following this the former Justice Minister released a statement of her achievements (couched as “reflections on [her] time in [MOJAG]” and this tantalizing observation in the middle of it,

The role of the Attorney General of Canada carries with it unique responsibilities to uphold the rule of law and the administration of justice, and as such demands a measure of principled independence. It is a pillar of our democracy that our system of justice be free from even the perception of political interference and uphold the highest levels of public confidence. As such, it has always been my view that the Attorney General of Canada must be non-partisan, more transparent in the principles that are the basis of decisions, and, in this respect, always willing to speak truth to power. This is how I served throughout my tenure in that role.

Finally, on this point, as reported in The Globe and Mail, the new Attorney General, David Lametti, has indicated that he might still “issue a directive to the prosecution service to settle corruption charges against SNC-Lavalin Group Inc. out of court”.

Now a few words about remediation agreements. Section 715.3 is lengthy with much detail and it is my intention to address only the most significant portions of it. Section 715.3(1) defines a “remediation agreement” as “an agreement, between an organization accused of having committed an offence and a prosecutor, to stay any proceedings related to that offence if the organization complies with the terms of the agreement”. They are available only in the case of economic offences. They are intended to denounce wrongdoing and the harm it has caused; hold wrongdoers accountable through “effective, proportionate and dissuasive penalties”; require wrongdoers to put in place corrective measures and create a “compliance culture”; encourage voluntary admission of wrongdoing; provide reparations; and “reduce the negative consequences of the wrongdoing for persons — employees, customers, pensioners and others — who did not engage in the wrongdoing, while holding responsible those individuals who did engage in that wrongdoing”. In short, remediation agreements are intended not to punish, but to change behaviour.

Negotiations towards an agreement must meet several conditions: there must be a reasonable prospect of conviction; negotiation is in the public interest and “appropriate in the circumstances” and the Attorney General has consented to the negotiation; a fourth condition relates to the nature of the conduct and appears to be satisfied here. The prosecutor must consider nine factors, the last being any factor the prosecutor considers relevant; others include how the conduct underlying the offence came to the attention of authorities; the seriousness of the conduct and its impact on any victim; how involved senior officers were; whether the organization has taken disciplinary action, including dismissal against anyone involved; whether the organization has remedied the harm and taken steps to prevent the conduct’s happening again; whether the organization has identified (or being willing to identify) wrongdoers; and “whether the organization — or any of its representatives — was convicted of an offence or sanctioned by a regulatory body, or whether it entered into a previous remediation agreement or other settlement, in Canada or elsewhere, for similar acts or omissions” or committed other offences. Of particular interest is section 715.32(3): “if the organization is alleged to have committed an offence under section 3 or 4 of the Corruption of Foreign Public Officials Act, the prosecutor must not consider the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved.” This would apply in the SNC-Lavalin case.

The prosecutor interested in entering into an agreement must provide written notice to the organization, containing particular provisions, and an agreement must contain sixteen mandatory provisions and may contain three other specified provisions, among others unspecified. Other provisions relate to advising victims. Once the agreement is reached, the prosecutor must apply to the court for approval, which it must give if it is satisfied under section 715.37(6) that it meets three criteria. Following court approval, the prosecutor must stay the proceedings. The norm appears to be that the court must publish the agreement (and relevant orders or reasons for not giving orders), although it has the discretion not to do so under certain circumstances. The court does not appear to have the authority under the provisions to review the prosecutor’s decision not to issue the invitation to negotiate. However, the prosecutor is obliged to consider a number of factors in determining whether to offer the opportunity to negotiate and is not to consider one (“the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved”) on which SNC-Lavalin relies, given their significance to the Quebec economy; Roussel has said she did not consider it and was prohibited from considering it, but otherwise has not indicated how she considered the factors.

The important constitutional issue here is the independence of the attorney general from political interference, a mainstay of our rule of law system, and specifically reflected here in the AG’s prosecutorial discretion; this is being challenged directly by SNC-Lavalin’s application for judicial review of the DPP’s decision not to offer the company an opportunity to negotiate a remediation agreement. I commend readers to a concise statement by Craig Forcese of the principles applying to this situation, L’Affaire SNC-Lavalin: The Public Law Principles, in which he sets out the role of the Attorney General (“most critically”, although not only, overseeing federal criminal prosecutions, AG and prosecutorial independence (free from political influence), with discretion limited by abuse of power, and the reason for it (to ensure the AG and prosecutor act in the public interest), when it would be violated (definitely when there is political direction, but possibly less specific circumstances before that point) and whether this is affected by the context of a remediation agreement (no).

(On delegated prosecutorial independence as it applies to individual prosecutors in their institutional role as representatives at the federal level of the Director of Public Prosecutions, see “Independence and Accountability in Decision-Making” in the Public Prosecution Service of Canada Deskbook. As the Deskbook points out, “Since the Attorney General is accountable to Parliament, the courts and the public for decisions made on his or her behalf, this means that the Attorney General may issue a directive to the DPP in a particular case, though such situations would be relatively rare and any such directives must be published in the Canada Gazette in order to maintain transparency.)

I note also The Conflict of Interest Act , which gives the Ethics Commissioner the authority to investigate allegations of conflict. It is important to observe that the statute prohibits not only conduct that might benefit an office holder or public official themselves (or family or friends), but also states that “a public office holder is in a conflict of interest when he or she exercises an official power, duty or function that provides an opportunity to … improperly further another person’s private interests”. Thus improperly directing or some degree of pressure before that (say by the PMO or the Prime Minister himself) on the Attorney General to act in a certain way (say to direct the DPP to enter into negotiations with SNC-Lavalin for a remediation agreement that would further the company’s interests) would constitute a conflict of interest and a contravention of section 7 of the Act (“No public office holder shall, in the exercise of an official power, duty or function, give preferential treatment to any person or organization based on the identity of the person or organization that represents the first-mentioned person or organization.”) and section 9 (“No public office holder shall use his or her position as a public office holder to seek to influence a decision of another person so as … to improperly further another person’s private interests.”).

So: what can we conclude from what we know, from what is reasonable to conclude and from the principle of independence adhering in the Attorney General (and through the AG to the prosecutor)?

We need to start with the enactment of the Criminal Code remediation agreement provisions, something new for Canada, and something different from a plea deal. A remediation agreement would leave SNC-Lavalin free to bid for government contracts, something that a conviction or plea deal would not permit. Obviously, this is in the interest of SNC-Lavalin, since its reliance on government contracts means that without them, the company risks bankruptcy. But this is also of considerable interest to the Liberals, since they do not want to have to deal with the fallout of that bankruptcy in Quebec, particularly, the loss of thousands of jobs, as the next federal election in October of this year comes closer. It appears that SNC-Lavalin lobbied for this option in the Criminal Code and, being successful, likely had expectations that they would be able to take advantage of it. The rule of law does not permit passing legislation that is targeted at an entity for negative reasons, but these provisions can be employed by other organizations facing economic criminal charges and therefore, while the provisions might have been enacted for the immediate purpose of providing an “out” for the company that lobbied for them, they do not seem to pose a constitutional, rule of law challenge.

The next issue is the extent of the discussion in Cabinet about the use of the remediation agreement approach in this case. Certainly, there are major consequences to an SNC-Lavalin conviction that could affect the public interest, and the potential failure of a large company or threat of withdrawal of a large company from Canada has led in the past to government action, including loans and subsidies. These may be controversial, but they are not uncommon. Here the company’s claim that it has removed the wrongdoers and has developed appropriate methods of preventing the same thing happening again appears to have been accepted. Possibly, there were different views around the Cabinet table. But only one person’s view of how to proceed mattered. The prosecutor exercised her discretion not to offer the company the chance to negotiate an agreement. It seems that various actors, and in particular, the PMO, tried to convince the Attorney General to direct the prosecutor to offer the opportunity to negotiate. The Attorney General refused.

It is not surprising that the Attorney General would be involved in discussions on this matter; she would be expected to consult colleagues. The issue, of course, is how extensive was the effort to convince her to direct the prosecutor to offer the company the chance to negotiate. The Prime Minister carefully stated that the PMO had not “directed” her to act in a certain way. It is not always necessary to give a direct “order”, however, to make clear one’s intentions about how someone should behave. (Certainly, we recognize that when the source of comments, even oblique ones, is a superior with power over one, such comments can be received as an “order”, particularly depending on the circumstances under which they are made: vide south of the border and the meaning of Trump comments to Comey on giving Michael Flynn a break in his criminal difficulties).

We have two signposts indicating that vigorous exchanges about how to proceed may have passed over into impermissible interference: the Prime Minister’s removal of Jody Wilson-Raybould as attorney general and her appointment into the less visible and wide-ranging Veterans Affairs, without any ostensible reason for doing so and indeed, contrary to her performance as MOJAG (and coupled with that, her successor David Lametti’s quick statement that he might still direct the DPP to enter into the impugned negotiations; and Wilson-Raybould’s statement on her website and its reference to the importance of an independent justice system and that “the Attorney General of Canada must be non-partisan, more transparent in the principles that are the basis of decisions, and, in this respect, always willing to speak truth to power” (emphasis.added).

These are signposts, but they are not definitive. On the one hand, the Prime Minister may have had other reasons, perhaps political, but still acceptable, to remove Wilson-Raybould as AG. It may be that replacing her with someone from Quebec is coincidence or simply a reflection of other political, but still acceptable considerations, and it may be that David Lametti genuinely views things differently from how Wilson-Raybould viewed them. On the other hand, Wilson-Raybould has been a star in Cabinet and has reflected the commitment the Prime Minister has made to working with First Nations and is perhaps not the ideal sacrificial lamb. When the reasons for an action are not obvious, one looks for other reasons. And David Lametti is from Quebec, home of SNC-Lavalin, and if he indicated his views in Cabinet, it is unlikely that the Prime Minister would have made him AG had he expressed opposition to a remediation agreement.

These are suppositions, the truth of which may be discovered through the Justice Committee and Ethics Commissioner inquiries. There are lots of anonymous sources involved in the stories everyday in the papers, whether “revealing” that there was “pressure” on Wilson-Raybould, that “pressure” was within acceptable bounds, that Wilson-Raybould is “difficult”. On this last, Liberal MP Celina Caesar-Chavannes described Wilson-Raybould as “fierce, smart and unapologetic” and I share Caesar-Chavannes’s view that “[w]hen women speak up and out, they are always going to be labelled”.

Thus whether the discussions were “business as usual”, discussions that could be construed by some and not others as crossing the line to become impermissible political interference in the attorney general’s independence under the rule of law or “discussions” that become directions and actually crossed that line will only be learned when those involved in the PMO, the Prime Minister (who claims both solicitor-client privilege and cabinet solidarity), Wilson-Raybould, Lametti and others from whom no one has yet heard have told their stories.

For me, however, one question lingers. Obviously, Jody Wilson-Raybould was disappointed in her cabinet demotion. leading her to write her statement defending her record as MOJAG. But she did more than that: she made a pointed statement about the importance of independence and “speak[ing] truth to power”, leaving us to infer that she did exactly that. What she did not do, though, is resign. An AG faced with direction, order, instruction, rather than advice, consultation, suggestion, gentle persuasion ought to resign and this she did not do. Again, when faced with reality, it may be difficult to “quit” on a matter of principle. Yet this is required if we are to uphold the rule of law. Should we take her decision not to resign to reflect that whatever exchanges took place did not quite enter impermissible territory, even if stronger than we might otherwise want to see? Or did she, perhaps, not appreciate that the exchanges were as serious as they were; if so, this was no doubt brought home when she was removed from her position. From this perspective, it would be interesting to know what the conversation between the Prime Minister and David Lametti was about before the Prime Minister appointed Lametti to replace Wilson-Raybould.

UPDATE: Since posting the above this morning, Jody Wilson-Raybould has indeed resigned and has retained independent counsel for advice on what she can say about these events. (A comment to the original post contains her letter of resignation.)

Comments

  1. From the resignation letter of the Honourable Jody Wilson-Raybould:

    “…When I sought federal elected office, it was with the goal of implementing a positive and progressive vision of change on behalf of all Canadians and a different way of doing politics. My resignation as a Minister of the Crown in no way changes my commitment to seeing that fundamental change achieved. This work must and will carry on. …

    I am aware that many Canadians wish for me to speak on matters that have been in the media over the last week. I am in the process of obtaining advice on the topics that I am legally permitted to discuss in this matter and as such, have retained the Honourable Thomas Albert Cromwell, CC as counsel.

    Again, my thanks to all Canadians. Regardless of background, geography, or party affiliation, we must stand together for the values that Canada is built on, and which are the foundation for our future.”

  2. Terry and Pritchard

    I think it is virtually impossible to imagine that the government drafted and passed this legislation, without taking steps to ensure that SNC’s case would fit the criteria.

    i.e. There was discussion in Cabinet to review the criteria being drafted and make sure that SNC’s case would fit all of them, *prior* to the legislation being passed.

    It is, I think, reasonable to imagine the AG would have been asked to play a role in vetting the draft against the characteristics of the SNC case. This would not have run afoul of the Shawcross doctrine, and would only have been prudent given the aim of the bill.

    So it isn’t hard to imagine that the PMO and JWR would have been very much at odds in the aftermath of the DPP’s decision not to offer a DPA. Lots of grousing. Much unhappiness in the PMO.

    Then the cabinet shuffle.

    This scenario could easily result in JWR feeling she was subject to “undue pressure”, whereas the PMO would see it much more of a failure by the Minister to ensure the legislation fit the task at hand.

  3. Thanks you for an informative, thoughtful post. It would be nice to hear you on media. Knowledgeable commentary is preferable to speculation & conjecture. The A.G. is also the legal advisor to cabinet as Minister of Justice. This case seems to me to suggest the position of Soliciter-General could be revived, & the two roles separated. Not sure of the ramifications of that. Would welcome comments.
    SNCLavalin is undergoing prosecution. Whatever occurred the case went ahead. The Globe story and the subsequent media controversy about intereference downplay this aspect. If the case had been deferred prosecution there would be a story. If that happens it will be a story.
    The decision by the Justice department to arrest Ms. Weng of Huawei following a request from the U.S. has created a crisis in Canada-Chinese relations.
    As Craig F. pointed out no one questions the authority of the PM to make & unmake a cabinet. Appointing a political newcomer Minister of Justice was a gamble. As a crown prosecutor she was obviously suited to be A.G. When a government gets into legal trouble, the Minister of Justice becomes vulnerable. It did, she was.

  4. Totally agree with Terry and Pritchard. There’s no way one goes through all the trouble of drafting such a law, then going out of your way to sneak it onto the books for it not to be used.

    It would frustrate the PM to no end, and when you have a guy that dictates to Facebook to “clean up their at or he’ll do it” and is prepared to “track media” and only give money to ‘trusted sources’, you have to assume he’d seek to influence here too. (In short, he’s as bad as SNC).

    I’d be interested to review the dates that SNC lobbie the gov, and the date the law was drafted. This might be significant. If say, they lobbied the gov once, and the law was then written, it would suggest all other lobbying was an effort to pressure the AG to use it. If all lobbying stopped the day afer the law was written, it would imply the lobbying was to get the law on the books and nothing beyond that.

  5. Thank you for this detailed treatise. Very helpful in helping Canadians sift through the chaff and see what are the objective facts behind this story.

    if a change to the crininal code is made as a result of an event or series of events affecting person or organization, either as individual or a collective, I would hope that those making such change would look at how this change would or could be applied in other possible or hypothetical future situations to ensure that making a change to address an immediate problem does not weaken our ability to appropriately prosecute wrong-doers for future offences.

    Question: would this consideration have been “normal process” in the course of developing such a change to our criminal code?

  6. There is one aspect of this that has not yet been considered, here or in the media.

    The permission of the AG is necessary for a DPA to proceed.

    Is this the ONLY requirement that was not met? If she gave her consent, would it have been offered?

    If so, the answer to the following question becomes central: ‘Why did she refuse her permission?’ Who influenced her decision, and why?

    If she did so for entirely political reasons, or simply because she was stubborn and wanted to resist ‘political pressure’ and NOT entirely on the merits of the case, we are back to political interference, but not from the PMO.s office, from her directly. If it was her intent to make a political statement, then indeed I suggest the decision was entirely politically motivated.

    In the final analysis, now that it has come as far as it has, I can not see any situation in which she is not required to publicly state the reasons for her refusal to give permission, except client-solicitor privilege.

    This will, indeed, be very interesting.