SNC-Lavalin pleads guilty to fraud, will pay $280-million fine for company's past work in Libya
MONTREAL -- SNC-Lavalin has pleaded guilty to one charge of fraud over $5,000 and will pay a $280-million fine, federal prosecutors announced in court Wednesday in Montreal.
The construction division of the company will have five years to pay the fine and will be on probation for three years.
In return, prosecutors will withdraw other corruption-related charges against SNC-Lavalin Group Inc. and its international marketing arm, SNC-Lavalin International Inc.
"We came to an agreement which allows a settlement of this file in the interests of justice and which imposes -- as I said in the courtroom -- a punishment that is effective, proportionate and dissuasive in its obligation to Canada… for such serious offences that concern us here," Presecutor Richard Roy told reporters outside the courtroom.
SNC-Lavalin shares soared on the news, jumping $6.98, or 28.94 per cent, to $31.10 on the Toronto Stock Exchange. Shares had been halted prior to market open.
Quebec Superior Court Judge Claude Leblanc accepted the guilty plea after prosecutors and lawyers for the Montreal-based engineering firm presented their joint sentencing argument Wednesday.
SNC-Lavalin will have to engage an independent monitor who will provide initial and annual reports. Executive summaries of these documents will be posted on the company's website.
It will make changes to its compliance and ethics programs, as identified by the independent monitor.
"We feel this settlement is fair and we deeply regret this past behaviour, which was contrary to our values and ethical standards," said Kevin G. Lynch, chairperson of the company's board of directors.
SNC-Lavalin is already subject to monitoring by Public Services and Procurement Canada and the World Bank.
The company and two of its subsidiaries had been facing charges that they paid nearly $48 million to public officials to influence government decisions under the late dictator Moammar Gadhafi's regime between 2001 and 2011.
The case thrust the Montreal-based company into the centre of a political controversy earlier this year, involving the governing Liberals.
The SNC-Lavalin affair revolved around Jody Wilson-Raybould's claim that as attorney general she was pressured by people in Prime Minister Justin Trudeau's inner circle to settle criminal charges against the company through a new legal tool comparable to a plea deal.
In a statement Wednesday afternoon, the office of the Attorney General of Canada David Lametti said "this decision was made independently by the PPSC, as part of their responsibility to continually assess and determine the appropriate path for cases under their jurisdiction.
"Canadians can have confidence that our judicial and legal systems are working as they should."
Quebec Premier Francois Legault said he was pleased with the outcome for the firm and the thousands of jobs it provides.
"That's what we were asking for, that SNC-Lavalin will pay a good amount -- $280 million – and a division of construction, they won't be able to have public contracts for the next three years, but the rest of SNC-Lavalin, so it means the majority of the employees SNC-Lavalin who weren't involved with this fraud, they will be able keep their jobs, so I'm quite happy so far about what happened today," he said.
Prime Minister Justin Trudeau said his government might have acted differently had it known the criminal case against SNC-Lavalin would be resolved without crippling the company or throwing thousands of its employees out of work.
"Obviously, as we look back over the past year and this issue, there are things we could have, should have, would have done differently had we known, had we known all sorts of different aspects of it," he said Wednesday in a year-end interview with The Canadian Press.
"But you don't get do-overs in politics. You only do the best you can to protect jobs, to respect the independence of the judiciary and that's exactly what we did every step of the way."
Throughout the year-long saga that shook Trudeau's government and likely contributed to the Liberals being reduced to a minority in the Oct. 21 election, the prime minister argued his only preoccupation was protecting the 9,000 innocent Canadian employees, as well as pensioners, shareholders and suppliers, who stood to be harmed if SNC was convicted on corruption charges related to contracts in Libya.
Asked if he thinks SNC-Lavalin cried wolf about relocating in order to pressure the government into offering a remediation agreement, Trudeau said: "I think those are reflections that people will have to have and engage with the director of public prosecutions."
Still, he welcomed Wednesday's outcome.
"This process unfolded in an independent way and we got to an outcome that seems positive for everyone involved, particularly for the workers."
Trudeau's world was rocked by allegations that he, his senior staff, the top public servant and others had inappropriately pressured former justice minister and attorney general, Jody Wilson-Raybould, to stop the criminal prosecution of SNC-Lavalin. They wanted her to use her legal authority to override the director of public prosecutions, who had decided not to negotiate a remediation agreement -- a form of plea bargain -- with SNC.
The federal ethics watchdog concluded in August that Trudeau violated the Conflict of Interest Act in the way he dealt with the issue.
Wilson-Raybould, who quit Trudeau's cabinet and won re-election as an Independent, suggested in a series of tweets that Wednesday's resolution of the case vindicates her refusal to politically interfere with the public prosecutor's decision.
"I have long believed in the essential necessity of our judicial system operating as it should -- based on the rule of law and prosecutorial independence, and without political interference or pressure," she said.
On Sunday, former SNC-Lavalin executive Sami Bebawi was found guilty on all five charges he was facing, including fraud, corruption of foreign officials and laundering proceeds of crime.
The Canadian Press contributed to this report.