The SNC-Lavalin headquarters is seen in Montreal on February 12, 2019.Paul Chiasson/The Canadian Press
SNC-Lavalin Group Inc. has reached a plea deal with prosecutors to settle criminal charges against the Canadian engineering giant related to a bridge contract in Montreal two decades ago.
The company said in a statement late Friday that it has reached a settlement agreement with the Quebec criminal prosecution office, known as the Directeur des poursuites criminelles et pénales (DPCP) to resolve charges brought against two company entities on last fall. These agreements, sometimes called deferred prosecution agreements, allow companies to avoid a lawsuit in exchange for the payment of a fine and the control of their activities by third parties.
As part of a three-year agreement, the engineering firm said it will pay a $29.6 million fine. The prosecutor’s office also confirmed the deal in a separate statement. The parties will seek approval of their pact from a Quebec Superior Court judge at a hearing scheduled for May 10. No further details were provided.
Quebec prosecutors last September indicted two of the company’s business entities, SNC-Lavalin Inc. and SNC-Lavalin International Inc., and former SNC vice presidents Normand Morin and Kamal Francis in connection with an investigation of RCMP’s longstanding over bribes paid in a $128 million contract to restore Montreal’s Jacques Cartier Bridge in 2002.
Michel Fournier, the former head of the Federal Bridge Corp., pleaded guilty in 2017 to fraud-related charges for accepting more than $2.3 million in bribes from SNC in the Jacques Cartier bridge case and laundering the proceeds. He was sentenced to 5 1/2 years, and has since received full probation. The police investigation then turned to who arranged the bribes.
The SNC units and the two former executives face charges of forgery, conspiracy to commit forgery, fraud, conspiracy to commit fraud, fraud against the government and conspiracy to commit fraud against the government, the RCMP says. Both men are in their 70s; their cases continue.
Quebec prosecutors have previously said that offering SNC-Lavalin the opportunity to negotiate a remedy agreement is the appropriate way to avoid collateral damage to the company’s stakeholders.
“I think it fits” as a solution in this case, said Patrice Peltier-Rivest of the DPCP. “This is an alternative to a more classic sentence, an alternative that allows to reduce the effects on employees, retirees, shareholders, SNC-Lavalin’s clientele.”
SNC has said it is the first time a Canadian company has been invited to negotiate a remediation agreement. However, Peltier-Rivest said it is the second time Quebec prosecutors have offered an invitation to negotiate such a deal.
The first case involved a separate company in the Longueuil district about two years ago, he said. It was unclear if a final settlement was reached in that case.
Mr. Peltier-Rivest has said that SNC cooperated with authorities during police searches and then voluntarily provided relevant information, which contributed to the decision to extend an offer to negotiate a settlement. The two former managers cannot benefit from a deferred prosecution agreement because such agreements do not apply to individuals.
SNC was denied a deferred prosecution agreement two years ago in a separate case in which it was accused of violating Canada’s Corruption of Foreign Public Officials Act and fraud related to its dealings in Libya when Moammar Gadhafi was in power. Kathleen Roussel, director of federal prosecutions, told The Globe and Mail in 2020 that a deferred prosecution deal in that case was inappropriate because of the “gravity and breadth” of the crime.
SNC undertook an intense lobbying campaign with the federal government to obtain a deferred prosecution agreement in the Libyan case. Allegations that Prime Minister Justin Trudeau and other members of his government unduly pressured then-Justice Minister and Attorney General Jody Wilson-Raybould to order a deal plunged the government into crisis for weeks.
SNC reached a plea deal with prosecutors in December 2019, in which the company’s construction division pleaded guilty to a single fraud charge and the potentially more damaging corruption charge was dropped. The company agreed to pay a $280 million fine and received a three-year probation order, which includes supervision by an independent monitor. The Quebec judge who approved the deal called it “reasonable” and said that without such plea deals, Canada’s justice system would “collapse under its own weight.”
The Jacques Cartier Bridge investigation, called Project Agrafe (basic), has long been a legal risk for SNC. The company acknowledged the investigation in corporate documents, adding that other investigations into its previous business, including in Algeria, may continue.
The Libyan bridge and Jacques Cartier affairs are “two completely different cases,” said prosecutor Francis Pilotte of the Quebec office of criminal prosecution. “The DPCP is completely independent with respect to any case that may have occurred in the past. So it’s up to us to “bring charges and offer deferred prosecution deals,” he told reporters last fall.
Reference-www.theglobeandmail.com