Federal public prosecutor asks court to strike SNC-Lavalin plea for deal

OTTAWA — The federal director of public prosecutions is officially asking a court to toss out a plea from SNC-Lavalin to spare the company from criminal proceedings.

The director's court filing represents yet another twist in a dispute at the heart of high-profile allegations the Prime Minister's Office leaned on former attorney general Jody Wilson-Raybould to intervene on the engineering and construction firm's behalf.

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SNC-Lavalin faces legal trouble over allegations it paid millions of dollars in bribes to obtain government business in Libya, which would be a crime under Canadian law.

The company unsuccessfully pressed the director of prosecutions to negotiate a "remediation agreement," a legal means of holding an organization to account for wrongdoing without a formal finding of guilt.

The director told SNC-Lavalin in October that negotiating a remediation agreement would be inappropriate in this particular case, prompting the company to ask the Federal Court for an order requiring talks.

The Globe and Mail newspaper reported Thursday that SNC-Lavalin repeatedly lobbied Trudeau's aides for a remediation deal and that his office pressed Wilson-Raybould to make it happen, bumping her from the attorney general's post after she refused.

Meanwhile, SNC-Lavalin's court action simmered away in the background.

In its Oct. 19 submission to the Federal Court, SNC-Lavalin said while the public prosecutor has discretion to decide whether to open negotiations on a remediation agreement, this discretion "is not unfettered and must be exercised reasonably" under the law.

The company said it provided the prosecutor's office with information showing the objectives of the remediation provisions were "easily met," including details of SNC-Lavalin's efforts to implement a world-class ethics and compliance program, as well as the complete turnover of the company's senior management and board of directors.

The company also cited the "negative impact of the ongoing uncertainty related to the charges" on its business.

In a Jan. 8 response filed with the court, the director of prosecutions said SNC-Lavalin's argument is "bereft of any possibility of success and should be struck."

While SNC-Lavalin has the right to be assumed innocent and to a fair trial, it has "no right or entitlement" under common or criminal law to be invited to negotiate a remediation agreement, the director said.

"The legislation only contemplates that a prosecutor may decide to extend an invitation to negotiate to an accused organization — but only after the prosecutor has been satisfied that it would be in the public interest and appropriate and that various other conditions have been met."

Aside from these points, the director of prosecutions says the Federal Court does not even have jurisdiction to review her decisions.

Central to the allegations that Trudeau's office put undue pressure on Wilson-Raybould is the fact she could have overruled the director of public prosecution's decision on a remediation agreement.

The attorney general may give the director of prosecutions directives on general issues and on individual cases, provided the directives are in writing and published in the Canada Gazette, the federal register.

However, the fact that such directives must be done publicly would seem to constrain a justice minister from doing anything overtly political.

The remediation agreement regime, introduced in Canada just last year, is somewhat similar to systems providing for "deferred prosecution agreements" in other jurisdictions, including Britain and the United States.

An internal federal analysis in August 2017 warned government officials about the potential downsides of deferred prosecution agreements — including risks they could fail to discourage corporate misdeeds and erode public confidence in the legal system.

"The chief argument that has been made against DPAs is that they may not deter misconduct," said the draft discussion paper on the topic prepared for the deputy minister of finance as a primer ahead of public consultations on the idea in the fall of 2017.

"Some argue that DPAs have become 'a cost of doing business,' allowing corporations to buy their way out of trouble by paying a financial penalty and passing the costs on to the consumer."

The document, obtained by The Canadian Press under the Access to Information Act, also warned about the dangers of the terms of a deferred prosecution agreement being considered too lenient, or that they could be applied in inappropriate cases.

"Then there is a risk of undermining public confidence in the criminal justice system," the paper said.

On the other hand, the document also underlined several advantages, including the fact a DPA could require a company to introduce compliance measures and independent corporate monitoring.

"DPAs may be more effective than criminal prosecution in improving compliance and corporate culture."

Months later, the government's steps to create such a tool caused concerns for lawmakers.

The Liberals quietly included the proposal in its 582-page budget legislation. In its 2018 budget, it had noted its intention to introduce legislation for a DPA in the near future — but it offered few details.

The government later proceeded with the proposal without a formal announcement. The move surprised lawmakers who had been studying the budget bill for the House of Commons finance committee.

— Follow @JimBronskill and @AndyBlatchford on Twitter

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