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How SNC-Lavalin came to be at the centre of a Canadian political scandal

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Canadian engineering firm SNC-Lavalin, which owns Atkins in the UK, is embroiled in an increasingly heated scandal which goes to the heart of Canadian politics.

Gerald Butts, the most senior political adviser to prime minister Justin Trudeau, resigned on Monday amid claims - which he has denied - that the prime minister’s office had pressed the attorney general to persuade prosecutors to drop a case they were bringing against SNC-Lavalin. 

The story starts back in 2015, when the Public Prosecution Service of Canada laid federal charges against SNC-Lavalin regarding allegations of bribery in Libya. SNC Lavalin denies the charges. The case has not yet been resolved.

A successful prosecution could mean the firm would be banned from working for the Canadian government for ten years. 

Last year the Canadian Department of Justice brought in legislation allowing companies accused of wrongdoing to sign remediation agreements. These enable firms to avoid the negative consequences of a successful prosecution by paying a fine or accepting some other form of sanction.

Remediation agreements are intended to protect the jobs of innocent employees. SNC-Lavalin asked to negotiate such a remediation agreement, but in October last year, the director of the Public Prosecution Service of Canada refused the request. 

SNC Lavalin had previously demonstrated to the Canadian authorities that it had beefed-up its ethics and compliance programme and continued to bid on, and win, public sector work.

A statement from the firm in December outlined the financial impact the refusal to start remediation agreement negotiations would have, as it continues to request this.

It said: “SNC-Lavalin and the province share the desire to maintain our head office in Quebec; however, the ongoing legal challenges continue to weigh on the company. We’ve seen significant reduction in the employee base (from 20,000 in 2013 to 8,500 today) and our Canadian business has shrunk. This is a clear indication that the public interest is not being served by denying the company and its innocent employees the opportunity to participate in the remediation agreement process brought in this year by parliament.”

Local media sources have quoted Quebec prime minister François Legault as saying he wants the government to quickly settle the matter with the engineering giant to protect local jobs.

But the issue intensified earlier this month after a Canadian newspaper published anonymous claims that prime minister’s office, where Butts worked, had pressed prosecutors to drop the Libya case in favour of a remediation agreement.

Canada’s former justice minister attorney general Jody Wilson-Raybould then resigned from her post as minister for veteran affairs, although she did not directly refer to the matter in her resignation letter. She did however say that she was taking legal advice on what she could say regarding “matters that have been in the media over the last week.” According to reports, she resisted the alleged pressure.

On Monday, Butts resigned, although he denied that he or the prime minister’s office had pressurised anyone. The prime minister Justin Trudeau has also denied the allegations. In a statement Butts said: “Recently, anonymous sources have alleged that I pressured the former attorney general, the honourable Jody Wilson-Raybould, to assist SNC-Lavalin with being considered for a deferred prosecution agreement.

“I categorically deny the accusation that I or anyone else in his office pressured Ms Wilson-Raybould. We honoured the unique role of the attorney general. At all times, I and those around me acted with integrity and a singular focus on the best interests of all Canadians.”

He went on to say: ”My reputation is my responsibility and that is for me to defend. It is in the best interests of the office and its important work for me to step away.”

Conflict of interest and ethics commissioner, Mario Dion, is looking into the allegations. In addition, Canada’s House of Commons committee for justice has also discussed looking into the issue.

SNC-Lavalin has declined to respond. 

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