Canada: The Scandal That Cost Justin Trudeau His Rock-Star Popularity - PressFrom - Canada
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CanadaThe Scandal That Cost Justin Trudeau His Rock-Star Popularity

17:40  02 august  2019
17:40  02 august  2019 Source:   msn.com

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The Scandal That Cost Justin Trudeau His Rock-Star Popularity © lars hagberg/Agence France-Presse/Getty Images Revelations about the Canadian prime minister’s advocacy for SNC-Lavalin, which faces fraud allegations, threaten his party’s majority in October elections.

Justin Trudeau did little wrong in his supporters eyes during his first three years as Canada’s prime minister. In the fourth, his popularity has dropped so far his party may lose its majority in October elections.

A secretly taped call is one reason why. Just before Christmas, Canadian Attorney General Jody Wilson-Raybould turned on her iPhone voice recorder for a call with the country’s top bureaucrat, Michael Wernick. Mr. Trudeau and senior officials had already pressed her and her chief aide 20 times in calls, messages and in person to let a major Canadian firm avoid a criminal trial on bribery and fraud charges. She had resisted.

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On the phone, Mr. Wernick said the company, SNC-Lavalin Group Inc., was considering selling itself or moving abroad, and Mr. Trudeau believed it should be given the chance to negotiate an out-of-court settlement.

Mr. Wernick, unaware of the recording, said: “I think he is going to find a way to get it done.”

Ms. Wilson-Raybould didn’t relent: “This is going to look like nothing but political interference by the prime minister, by you, by everybody else that has been involved in this.”

That’s exactly how it looked to many Canadian voters when the recording surfaced after parliamentary hearings in February and March exposed details of the Trudeau government’s moves to advocate for the engineering-and-construction firm. Testimony in the hearings captivated the public and turned Ms. Wilson-Raybould into one of the most recognizable Canadian politicians outside Mr. Trudeau.

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The Canadian leader, who had a rock-star following among progressives for championing clean governance—and a promise to let women and ministers have more governing say—had sided with a scandal-plagued company and overruled his attorney general, eventually moving her to a lower-profile position.

Based on current data, some pollsters say, the best Mr. Trudeau can expect from the election is a minority government needing another party’s support to govern. “If the election becomes a referendum on Justin Trudeau,” says Nik Nanos, head of Ottawa-based Nanos Research, “the Liberals may lose.”

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A spokeswoman for the Prime Minister’s Office referred to Mr. Trudeau’s remarks in a March press conference that he regretted the erosion of trust between his office and Ms. Wilson-Raybould and has “learned a lot about how we can do better.”

SNC-Lavalin, which has commented on some specifics of the case in past months, declined to answer queries last month.

Mr. Trudeau, his senior advisers and other government representatives have publicly said their discussions with Ms. Wilson-Raybould were to ensure she considered all legal options, with livelihoods of 9,000 SNC-Lavalin employees in Canada at stake.

“It is our job as parliamentarians to defend the interests of the communities we were elected to represent,” Mr. Trudeau said in the March press conference. “I stressed the importance of protecting Canadian jobs and reiterated that this issue was one of significant national importance.”

Ms. Wilson-Raybould says she remains puzzled by the pressure Mr. Trudeau’s office placed on her. “I know that there was a huge lobbying effort by that company,” she says. “But the motivations for the prime minister or all of those people that engaged with me in the way that they did? You’d have to ask them.”

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Mr. Wernick declined to comment. In the parliamentary hearings, he said his phone call and other communications with Ms. Wilson-Raybould “were entirely appropriate, lawful, legal.”

SNC-Lavalin is based in Montreal, a portion of which Mr. Trudeau represents in the legislature. Aides in his office met 23 times with its representatives during a roughly three-year period between the Liberal government’s election in late 2015 and late 2018, lobbying records show.

That was nearly five times as many meetings SNC-Lavalin secured over the prior three years with aides to Conservative Prime Minister Stephen Harper. Compared with the Liberals, the company got little traction from the Harper administration, say people familiar with the firm and former members of the Harper government.

Members of Mr. Trudeau’s administration had personal ties with the company, a reminder of the tight circles that can make up the top levels of business and politics in Canada. SNC-Lavalin Chairman Kevin Lynch was Mr. Wernick’s boss between 2006 and 2009, when Mr. Lynch was Canada’s chief bureaucrat and Mr. Wernick was a top public servant. SNC-Lavalin said Mr. Lynch declined to be interviewed.

A Trudeau cabinet minister, François-Philippe Champagne, was the first Liberal government official to meet with SNC-Lavalin lobbyists about the firm’s bid for an out-of-court settlement, according to lobbying records. He had worked closely with the company’s then-CEO, Neil Bruce, between 2008 and 2012 while at a U.K. engineering firm, U.K. securities filings show.

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Mr. Bruce didn’t respond to requests for comment. A spokeswoman for Mr. Champagne says his past relationship with Mr. Bruce had no bearing on any meetings with SNC-Lavalin.

A spokeswoman for Mr. Trudeau says that the government’s actions on SNC-Lavalin’s behalf and meetings with its lobbyists weren’t influenced by any past links and that Mr. Trudeau’s office meets regularly with companies on a variety of matters.

In retrospect, says a senior Trudeau-government official, taking so many SNC-Lavalin meetings might not have been a wise decision.

With about 10 billion Canadian dollars ($7.5 billion) in 2018 sales, SNC-Lavalin employs 50,000 world-wide. It is working on a nuclear-power plant in Britain, Nevada freeways and Riyadh’s subway.

In February 2015, Canadian police charged that SNC-Lavalin bribed Libyan officials and defrauded Libyan organizations between 2001 and 2011. SNC-Lavalin denied wrongdoing and said the acts in question were carried out by two employees without the company’s knowledge. A former SNC-Lavalin vice president pleaded guilty in Swiss court in 2014 to corruption-related charges linked to his activity in Libya.

Mr. Trudeau’s dust-up was over whether the company should face trial on the Libya charges. A criminal conviction could trigger a ban on SNC-Lavalin’s bidding on government contracts at home and abroad.

About a week after Mr. Trudeau was sworn in as prime minister, in November 2015, SNC-Lavalin’s CEO, Mr. Bruce, argued at a Montreal luncheon for a system letting companies reach out-of-court settlements without guilty pleas. Such mechanisms in the U.S. and U.K. let prosecutors suspend criminal charges in exchange for financial penalties, pledges to strengthen compliance and other measures.

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Over the following years, the company lobbied Mr. Trudeau’s office, cabinet ministers and their aides, senior bureaucrats and opposition lawmakers, lobbying records show.

In early 2018, Finance Minister Bill Morneau incorporated a measure allowing out-of-court settlements near the back of a nearly 600-page piece of budget legislation. A spokesman for Mr. Morneau says the measure was written after consulting with business groups and the legal community, among others, and was introduced after approval from cabinet—of which Ms. Wilson-Raybould was a member.

The law stipulates that only the public prosecutor’s office, which operates at arm’s length from the government, can determine whether a company was eligible. Only the attorney general can overturn prosecutors’ decisions.

In September, the public prosecutor’s office informed SNC-Lavalin it would proceed with a criminal trial. Ms. Wilson-Raybould decided against intervening, she said in parliamentary hearings this year. She and the public prosecutor’s office haven’t explained publicly why SNC-Lavalin wasn’t invited to negotiate an out-of-court deal. Ms. Wilson-Raybould in an interview declined to discuss the reasons for the decision. The prosecutor’s office declined to provide reasons for the decision.

In court filings, SNC-Lavalin lawyers said prosecutors, in a phone call with the company, cited the gravity of the alleged crimes, the involvement of senior officers and the company’s lack of self-reporting.

About two weeks after prosecutors told SNC-Lavalin the trial would proceed, Ms. Wilson-Raybould met with Messrs. Trudeau and Wernick, according to parliamentary hearings. The meeting’s agenda was aboriginal policy, but the conversation swiftly turned to SNC-Lavalin.

Mr. Trudeau asked whether a solution could be found, given the jobs at stake, Ms. Wilson-Raybould testified, saying Mr. Wernick warned SNC-Lavalin would likely move its headquarters to London if an out-of-court settlement wasn’t an option.

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An SNC-Lavalin spokesman in March said the company provided documents to prosecutors indicating a headquarters move was a worst-case scenario.

Mr. Trudeau reminded Ms. Wilson-Raybould he was an elected official from SNC-Lavalin’s home base, she testified, saying she responded: “Are you politically interfering with my role, my decision?”

Mr. Trudeau backed off, she said. He has publicly confirmed the thrust of her account.

The next day, Sept. 18, SNC-Lavalin’s Mr. Bruce met with Mr. Wernick, according to handwritten notes Mr. Wernick provided lawmakers, and discussed strategies for persuading the prosecutor’s office to reconsider. Mr. Wernick told Mr. Bruce the company should focus on the public-interest argument.

SNC-Lavalin requested a meeting of its lawyer and Mr. Bruce with the chief prosecutor, according to a copy of a letter sent by prosecutors to the company and filed in the Federal Court of Canada. The prosecutor’s office declined and, on Oct. 9, told company lawyers its decision was final.

In an Oct. 15 letter to Mr. Trudeau, submitted in hearings, Mr. Bruce said the company had been treated poorly and one of its lawyers, former Supreme Court of Canada justice Frank Iacobucci, “was not afforded the courtesy of a meeting or even a call.”

Mr. Wernick testified he got a call that day from Mr. Lynch, his former boss and now SNC-Lavalin chairman, who warned the company would have to make tough decisions and asked: “Isn’t there anything that can be done?” Mr. Wernick said he told Mr. Lynch “in the firmest, curtest possible terms” that queries had to go through Ms. Wilson-Raybould and the public-prosecutions director.

A spokeswoman for SNC-Lavalin, speaking on Mr. Lynch’s behalf in May, says Mr. Lynch had requested a call with Mr. Wernick to inform him of a press release the company had issued on the prosecutors’ decision.

Through the fall, officials in Mr. Trudeau’s office pressed Ms. Wilson-Raybould and her chief aide to change course, according to Ms. Wilson-Raybould’s testimony. On Dec. 19, she and Mr. Wernick spoke in the recorded call. She told him she realized her refusal would have consequences.

“I knew that this situation was coming to a head,” says Ms. Wilson-Raybould, explaining her recording. “This was an extraordinary situation that required me to ensure that I protected myself.”

Three weeks later, while Ms. Wilson-Raybould was vacationing in Bali, Mr. Trudeau told her she would be demoted to heading veteran’s affairs, she said in testimony.

On Feb. 7, the Globe and Mail newspaper reported allegations Ms. Wilson-Raybould had faced pressure to intervene in the SNC-Lavalin case before her demotion, sparking a media flurry and criticism from opposition lawmakers. Mr. Trudeau initially said the allegations were false. Ms. Wilson-Raybould quit her post heading veterans affairs five days later.

At the urging of the opposition parties, members of Canada’s parliamentary justice committee agreed Feb. 13 to hear testimony from certain witnesses about the allegations. Those hearings officially ended March 19 after the Liberal majority on the committee voted to cease calling witnesses and hear additional testimony, arguing Canadians possessed the information required. Ms. Wilson-Raybould submitted the recording as additional evidence.

In April, Mr. Trudeau expelled Ms. Wilson-Raybould from his party’s caucus, saying trust had been broken by the recorded phone call. Mr. Wernick in March announced his retirement from the civil service, citing fallout from the uproar.

A judge ruled on May 29 the case against SNC-Lavalin could head to trial. On June 11, the company said Mr. Bruce would retire immediately.

In a LinkedIn note, he said his family had moved “and I was keen to join them.”

Ms. Wilson-Raybould is running for re-election, as an independent lawmaker.

Write to Kim Mackrael at [email protected] and Paul Vieira at [email protected]

David MacNaughton, ambassador to U.S., to leave post at summer's end.
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