By Canadian Press

Deals to let firms avoid bribery charges may be ‘political kryptonite’: law professor

Jun 1, 2023 | 1:25 PM

It’s been five years since Canadian prosecutors were given the tools to cut deferred prosecution deals with companies accused of corruption, but only two have been approved by the courts since then. 

The legal tool known as a remediation agreement in Canada was added to the Criminal Code in 2018 and allows companies to avoid charges in exchange for admissions of wrongdoing, co-operation with investigators, payment of penalties and other commitments.

But University of Ottawa law professor Jennifer Quaid said the lengthy delays between a company’s wrongdoing and resolution via an agreement raise questions about how effective the deals are at curtailing corruption.

The delays, she said, were “striking.”

It wasn’t until last year that the first remediation agreement was approved by a court when SNC-Lavalin admitted corruption related to the refurbishment of the Jacques Cartier Bridge in Montreal. But the wrongful behaviour occurred between 1997 and 2004.

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The engineering and project management company agreed with Quebec prosecutors to pay $29.6 million over three years to settle criminal bribery charges. 

It was another case involving SNC-Lavalin in 2019 that put the deferred prosecution regime to the test and ended in political scandal. 

Former attorney general Jody Wilson-Raybould claimed Prime Minister Justin Trudeau inappropriately pushed her to cut a deal with SNC-Lavalin over its alleged corrupt dealings in Libya.

Wilson-Raybould refused to pursue a remediation agreement with the company, and claimed this was why she was ousted from the portfolio, though Trudeau denied the allegations.  

A division of SNC-Lavalin ended up pleading guilty to fraud related to its Libya dealings in 2019, agreeing to pay a $280 million fine among other conditions. 

Quaid said it took a long time for Canada to add remediation agreements to the legal landscape, and the political scandal associated with the first attempt seemingly stymied their widespread use. 

“It’s like it sat dormant because no one wanted to touch it because it seemed like political kryptonite,” Quaid said. “I don’t know if that’s actually true, but it seems interesting that it took four years for the first one to come out after that.”

The second remediation agreement was approved by the courts this year, involving Quebec company Ultra Electronics Forensic Technology Inc. Details emerged this week after The Canadian Press obtained the Superior Court of Quebec’s ruling that approved the deal with federal prosecutors.

An agreed statement of facts says that between 2006 and 2018, the firm sought millions in contracts to sell investigation technology to the Philippines National Police, using agents to promise bribes to high-level officials, including cabinet minister Ronaldo Puno. 

Four of its executives still face corruption and bribery charges, but the company co-operated with investigators and signed remediation agreement shortly after being charged in September 2022.

Under the court-approved deal, the company must pay about $10 million for its corrupt dealings in the Philippines. 

In both the SNC-Lavalin and Ultra Electronics cases, Quaid said the corrupt conduct at issue was already years in the past. 

“We have yet to see what these agreements might look like in relation to more current things, things that haven’t sat basically on ice waiting for (a) resolution mechanism,” she said. “It could be still several years before you see one where the corruption only starts in 2018, as opposed to ends.” 

With Canada’s deferred prosecution regime still relatively untested, Quaid said questions loom over how effective it is at resolving cases more efficiently than full-on prosecution. 

Guidelines set out by the Public Prosecution Service of Canada say remediation agreements “are used in appropriate cases as an alternative to prosecution and serve as a means to hold organizations accountable, while putting in place measures to mitigate the risk of future offences and harm to third parties, such as employees, victims and investors.”

Quaid said the length of time between a company’s corrupt conduct and resolution of any criminal charges through the agreements highlights the uncertainty about just how effective a tool they are in dealing with corporate criminals. 

“That’s always been one of the worries about this … It’s not a guilty plea or it’s not a conviction, it’s a remediation agreement,” Quaid said. “Is this really faster, or is it just different? Are we actually saving time? Are we getting to resolutions faster?” 

“That’s the thing we don’t know yet,” she said. 

This report by The Canadian Press was first published June 1, 2023. 

Darryl Greer, The Canadian Press