SNC-Lavalin Group Inc. – PMO Scandal is Canada’s “Operation Carwash”

The SNC-Lavalin Group Inc. (TSX:SNC)’s metastasizing bribery investigation is threatening to  become Canada’s “Operation Carwash”, and Canadians need to be cognizant of exactly what that threat entails. The Liberal Party of Canada is overtly trying to establish a two-tiered justice system that undermines the Rule of Law in Canada, and gives preferential legal treatment to corporate donors of the Liberal Party.

[stock_chart symbol=”SNC”]

The shocking revelations during the testimony of former Canadian Attorney General Jody Wilson-Raybould are irrefutable evidence of such a conspiracy, and her demotion from Attorney General/Justice Minister to Veteran Affairs Minister is the smoking gun.

At the very least, what is emerging is a very clear and persistent attempt by the federal Liberal government of Canada to subordinate the rule of law to the economic interest of a single corporation – an act that is, in its simplest interpretation, the very essence of corruption.

Ignore the apologist platitudes of third-tier journalists who argue that Canada is disadvantaged by not offering Deferred Prosecution Agreements to its offending corporations in lieu of criminal prosecution; the principles underlying the rule of law trump any such subversion regardless of the origin or wording. Never mind the partisan defenders glibly rationalizing the government’s decision to ignore its own legal amendment (see below).

What the federal government is trying to pull is illegal, opinions of various liberal-affiliated legal pros notwithstanding. You don’t need a law degree to interpret this sentence from the amended Criminal Code of Canada:

“Despite paragraph (2)(i), 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.”

That the PM himself insists that his actions are motivated purely by concern for the 6,000 positions that might arguably be lost if SNC-Lavalin is not granted a “deferred prosecution”. I.e. pay a fine and avoid a trial, is further evidence of the moral turpitude that now characterizes the Liberal Party under Justin Trudeau, and threatens to define Canada if not remedied.

Just as is the case with Brazil’s Operation Carwash, it was when the political elite came to behave overtly as if the Rule of Law was, in fact, subordinate to economic and political interests, that the people of Brazil came together as one to agitate for a judicial anti-corruption ascendance.

Our Prime Minister is proposing to suborn the rule of law to economic interest.

I was among the many Canadians who voted Justin Trudeau’s liberal party into power, based on my own economic interest in cannabis, and fatigue from the unilateral governing style (and efforts to further toughen cannabis laws) of the conservative government of Stephen Harper.

I now feel thoroughly betrayed by the current government, and so, though normally apolitical, I feel very much compelled to sound an alarm of sorts that alerts all Canadians to this active subversion of the rule of law by our government and industry.

Since they are apparently trying to skate past this, the RCMP needs to launch a thorough independent investigation as to the potential Obstruction of Justice and Breach of Trust charges that in all likelihood should be brought against members of the Liberal Party.

Operation Carwash: Brazil’s National Cleanse

Operation Carwash is a still-running investigation that began in 2008 as a money laundering investigation. Since then, 232 individuals have been investigated across 16 companies, including Petrobras, Brazil’s national oil and gas company. Over 160 people have been indicted, resulting in 93 convictions so far. Over $1 billion in funds have been identified as misappropriated.

The public impetus driving the ever-widening net  is born from the long-standing tradition of political parties in Brazil paying each other (yes, in cash) for their support to form coalition governments. Besides obviating the subordination of the rule of law to political expediency driven by economic interest, the existence of the practice inculcated a culture of bribery and extortion in Brazilian politics that spread to business and law enforcement.

The CEO of Odebrecht, S.A. – Brazil’s largest Engineering, Procurement and Construction firm (same industrial category as SNC) is serving 19 years in prison for paying over $30 million in bribes. The investigation is still active and continues to topple governments throughout Latin America where government leaders are caught up in the web of bribes and favours showered upon them by a corporation who put itself above the rule of law. Three of Brazil’s top party brass are involved. Both former presidents Dilma Rousseff and Luiz Inácio Lula da Silva, better known just as “Lula”, were implicated and suffered impeachment. Marcelo Odebrecht, the grandson of the founder and CEO of Odebrecht, S.A. – Brazil’s largest Engineering, Procurement and Construction firm (same industrial category as SNC) was sentenced to 19 years in prison for paying over $30 million in bribes.

The investigation continues to this day because, like a strategic thread insistently pulled, the body of evidence cloaked in secrecy and collusion continues to unravel to reveal yet more graft.

I draw the comparison between the SNC-Lavalin affair and Operation Carwash because I wonder what might be discovered should the RCMP investigate the suspiciously cozy relationship among certain Quebec-based corporations and the Trudeau government.

Recall that a $372 million bailout in the form or a low-interest loan was granted to Bombardier, Inc., for example, by the Trudeau government in 2017, ostensibly for its CSeries program, which was in trouble. Bombardier then used the winfall to reward its top executives. They also laid off 14,500 employees. They also received $1 billion from the Province of Quebec. They then ceded control of the CSeries program to Airbus.

Is there a pattern here that suggests the Liberal Government is a little bit too cozy with Quebec-based firms? Does it bear deeper scrutiny by the RCMP? I think it does.

The Smoking Gun

Wilson-Raybould testified that there were “consistent and sustained efforts” on at least 10 occasions by Prime Minister Justin Trudeau’s office to coerce her into overriding the Public Prosecution Services Canada decision not to offer SNC-Lavalin a “deferred prosecution” which essentially gives a company guilty of criminal acts the ability to pay a fine in lieu of facing a criminal trial. The coercion consisted of  “veiled threats” according to Wilson-Raybould.

The Prime Minister’s Office, and the Prime Minister himself, are guilty of coercion of Jody Wilson-Raybould, as evidenced by her demotion to Veterans Affairs.

They make no secret about that now. But more to the point, the Liberal government snuck Deferred Prosecution Agreement language into its 582-page 2008 budget legislation, demonstrating a clear intent to provide Deferred Prosecution Agreements, and possibly specifically for the SNC-Lavalin case.

This despite an internal analysis that warned DPA’s might not act as a deterrent.

Of course they won’t act as a deterrent; the offenders within a company are never going to be asked to put up their own money in lieu of a trial.

DPA’s are common in the United States and Britain, but Canada had resisted the temptation to sell Canadian justice to those who could pay. There is no way that a DPA is not a political favour, as the government who awards them will likely act in the interest of its corporate donors.

Its a slippery slope, and the willingness of the Liberals to so blatantly undermine the rule of law in Canada should give every Canadian pause to reflect on the longer term implications of such prostitution.

China’s invocation of the SNC-Lavalin case to question the Feds’ commitment to the Rule of Law in reference to the extradition of Huawei’s CFO is precisely the outcome this type of two-tiered justice promotes. The Liberal Government has already shattered Canada’s credibility with this migration to the Dark Side.

Where is the Outrage?

Justin Trudeau and the Liberals are now trying pry the focus of the Canadian public away from the SNC-Lavalin affair. I received a call from the Federal Liberals inviting me to a “Climate Change Rally” this Monday March 4th at 6 pm at the Danforth Music Hall.

I intend to show up, but only for a “Regime Change Rally”. Everybody should be there: PCs, Liberals and NDPers. This is a clear case of government over-reach, and it must be met with a unified public outcry.

No government should be allowed to tinker with the rule of law. Just because Britain and the US have embraced two-tier justice doesn’t mean we should too. This where Canada should demonstrate leadership.


James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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