Trudeau Faces Ethics Investigation Over SNC-Lavalin Case - EcoFinBiz Blog

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Trudeau Faces Ethics Investigation Over SNC-Lavalin Case

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(Bloomberg) -- Canada’s ethics watchdog is investigating whether Prime Minister Justin Trudeau broke the rules and pressured his former attorney general to help SNC-Lavalin Group Inc. settle corruption charges out of court.

Ethics Commissioner Mario Dion confirmed his investigation Monday in a letter to two New Democratic Party lawmakers. He said he would investigate whether Trudeau or his staff contravened a section of the Conflict of Interest Act that bars “a public office holder from seeking to influence a decision of another person so as to improperly further another person’s private interests.”

The investigation comes as Trudeau’s new justice minister and attorney general, David Lametti, signals he may still ultimately intervene in the case of the Montreal engineering and construction giant. The brewing scandal has directly implicated Trudeau, who is seeking a second mandate from voters this fall.

Lametti replaced Jody Wilson-Raybould, who Trudeau’s office allegedly pressured to seek an out-of-court settlement, according to a report last week in the Globe and Mail newspaper citing unidentified sources. The prime minister said Monday he welcomes the investigation, and he told Wilson-Raybould last year that she had final say in such matters.

“I told her directly that any decisions on matters involving the director of public prosecutions were hers alone,’’ Trudeau told reporters in Vancouver. He also said he asked Lametti to look into waiving solicitor-client privilege so Wilson-Raybould can discuss the case more fully.

The House of Commons justice committee will hold a meeting this week to decide whether to investigate the issue as well.

A-G’s Role

In an email from a spokeswoman, Dion’s office confirmed it will launch an investigation after a complaint “that the Prime Minister or his office attempted to influence the Attorney General of Canada in relation to the prosecution of SNC-Lavalin.”

Speaking Monday to the Canadian Bar Association in Ottawa, Lametti declined to comment on specifics of the case. However, he noted that Canada blends the role of its justice minister and attorney general, with the latter being considered less political but still privy to talks at the cabinet table.

“These discussions can improve the quality of decision-making,” Lametti said. “But there is a line that cannot be crossed. Telling the attorney general what a decision ought to be -- that would be interference. And at the end of the day, I abide by the long-standing principle that when acting as attorney general, I will apply my judicial mind to a decision, and not my political mind.”

Lametti was asked in an interview with CTV’s Question Period a day earlier whether he could order prosecutors to give SNC-Lavalin a so-called remediation agreement, as it has been seeking.

“As a final step, I could issue a directive, but the Public Prosecution Service is an independent service,” he told CTV. “They get to operate independently -- that’s part of our rule-of-law system, and the director has done so in this case.”

Profit Warning

SNC-Lavalin has long lobbied for a negotiated settlement in the case, which dates back to 2012 and has cost the company at least C$5 billion ($3.8 billion) in lost revenue, Chief Executive Officer Neil Bruce said in December. Preliminary hearings are still ongoing, SNC spokeswoman Daniela Pizzuto said Monday, declining to say if or when a criminal trial would begin.

The political controversy comes at an inopportune time for the firm. It issued a profit warning Monday for the second time in two weeks after it failed to reach an agreement over a dispute with a client in a Latin American mining project. Shares fell 4.8 percent to C$34.94 in Toronto, after plunging 28 percent -- the most in at least 27 years -- on the initial warning in January.

Lametti, who represents a Montreal district, echoed Trudeau’s denials in the case to CTV, saying “there has been no pressure, and there has been no direction” to him regarding SNC-Lavalin. “Again, all we’ve heard are allegations in a newspaper. The prime minister has said that these allegations are false.”

The justice committee will meet Wednesday “to study reports of political interference in a criminal prosecution by the prime minister’s office.” While the governing Liberal Party has a majority on the committee, its chairman intends “to independently determine whether Committee study of the issue will be useful for Canadians.” In a message on Twitter, lawmaker Anthony Housefather added: “Nobody has attempted to influence me.”

--With assistance from Frederic Tomesco.

To contact the reporters on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net;Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Chris Fournier, Carlos Caminada

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