Tax haven investigation shows SNC-Lavalin has millions in offshore tax havens
The International Consortium of Independent Journalists, the organization that brought us the Panama Papers, has come out with a new leak.
ICIJ is famous for leaking the Panama Papers, Implant Files, Paradise Papers, and other offshore tax-haven related frauds being committed by multinational corporations worldwide.
A day after SNC-Lavalin shareholders demanded more accountability from the Québec-based engineering firm, Ottawa residents learned their city council voted for SNC’s subpar and lowball $1.6 billion bid to build phase II of light-rail in the capital.
“When SNC failed the technical score, it gives me no comfort they can deliver the best product, or even a reasonable product,” councillor Diane Deans told 580 CFRA; she was among three councillors who voted against the proposal.
“And frankly price doesn’t matter if the thing doesn’t work.”
Documents released by the City of Ottawa last week confirm CBC city hall reporter Joanne Chianello’s original story following the March 6 vote: that SNC-Lavalin’s bid failed to score the minimum 70 percent technical rating.
In fact, the firm scored just 67.27 percent in this category while its competition ranked in the mid-80s.
When Deans and other city councillors asked whether SNC-Lavalin had met the technical requirements, an outside lawyer for the city told council such information was embargoed until after the bidding process.
In other words, after the vote on the staff recommendation of SNC Lavalin’s TransitNEXT bid that Deans and fellow councillors Rick Chiarelli and Shawn Menard would be the only dissenters.
Before that, council steamrolled Ward 14 Somerset rep Catherine McKenney’s motion to put off the vote until March 27 with the hopes of getting their questions answered.
On Wednesday, McKenney told The Post Millennial she would have changed her mind altogether on supporting the project as presented by city staff.
“Given what we know today, that SNC did not meet the technical requirements…no, I would not have supported the staff recommendation,” she said.
“In the future, I will never support delegating authority until I have assurances that we as council have every right to full disclosure.”
The latest documents provided by the city clerk also indicate SNC-Lavalin was the only one of six bidders who did not make the technical grade but was the lowest bidder, and by a long shot.
While SNC-Lavalin’s cheaper bid was not confidential – Mayor Jim Watson had already called it “the best deal for taxpayers” – documents indicate SNC-Lavalin scored 97 percent for its financial submission; its closest rival ranked just 47 percent.
“It’s not even in the best interests of how we expend our revenues because things just end up costing us more, if in fact they don’t work,” said McKenney.
“Whether it’s tree guards, asphalt that we used to fill potholes … we cannot always go with the cheapest option. It’s not always the best and it will not always save the tax payer. In fact, it’s often quite the opposite.”
Council approved Phase I LRT for Ottawa, a.k.a. Confederation Line, in 2012 with high hopes it would be operable in winter of 2017 – Canada’s sesquicentennial year.
But Confederation Line remains closed, its construction fraught with difficulties, including a massive sinkhole that opened up downtown in the summer of 2016 after a tunnel roof collapsed.
There have also been derailments during the LRT’s testing phase involving a new brand of French Alstom train sets, designed for North America but whose proving ground is to be Ottawa.
The latest projection for the city taking the keys and opening Confederation Line is this September.
Meanwhile the city’s auditor is investigating the procurement process for Phase II, or the Trillium line that will service commuters in Ottawa’s south end and the international airport.
What the audit will turn up is anyone’s guess. City auditor general Ken Hughes’ review of Phase I released in June 2017 was “not to provide assurance that the Light Rail Transit (LRT) system will be completed on schedule. Rather, is the City doing what it should.”
And Hughes concluded the obvious: that “further unexpected construction delays may push back the opening day for revenue service”. On top of inevitable delays, nearly a year after the report the SNC-Lavalin-led consortium – Rideau Transit Group – dodged a $1 million penalty.
But even CBC Ottawa’s Chianello cannot get to the bottom of what happened between the Rideau Transit Group and the city, a portent for things to come and another potential flaw in the contract’s terms.
The estimated cost of Phase II is pegged at $4.66 billion, already an overrun and more than double the $2.1 billion
Given the enormous amount of money involved for the largest infrastructure project in Ottawa’s history, Deans is fed up with a process that kept elected officials in charge of the municipal purse in the dark.
“When city council can’t get direct answers to direct questions that is absolutely paramount info…then the public should be paying attention and I think they should be damn mad,” Deans said Tuesday after her suspicions about technical shortcomings were confirmed.
Just a day earlier amidst SNC-Lavalin’s $2.1 billion second-quarter loss, CEO Michael Sabia of Caisse de dépot et placement du Québec – SNC-Lavalin’s controlling shareholder – said the company requires “a wholesale, step-function change in the quality of its execution.”
“It’s a step up, a major step up, in discipline…in the capacity to overview project by project and to know where each one of those projects stands down to the decimal points. That’s what’s required,” Sabia told reporters.
Mayor Jim Watson did not respond to TPM queries about SNC-Lavalin’s Phase II bid or why he voted to support it without all of the facts before him.
According to a memo sent to council by City managers Steve Kanellakos, it is staff who maintain “sole discretion” in terms of bypassing some request-for-proposal requirements to advance a project.
The Prime Minister spoke in Winnipeg today after the former Justice Minister Jody Wilson-Raybould announced her resignation from the Liberal cabinet.
The resignation comes at a time when Wilson-Raybould is involved in a scandal regarding attempts by the Prime Minister’s Office to pressure her into intervening in a criminal trial against SNC-Lavalin.
This is the first time Trudeau has spoken since taking questions from reporters yesterday while in Vancouver.
“Last night I accepted Jody Wilson-Raybould’s resignation from cabinet. Frankly I am both surprised and disappointed by her decision to step down,” said the Prime Minister. “This resignation is not consistent with conversations I’ve had with Jody a few weeks ago… nor is it consistent with conversations we’ve had lately.”
Jody Wilson-Raybould was part of a cabinet shuffle earlier in January and was removed from her position as the Attorney General and as the Justice Minister.
“Let me be direct the Government of Canada did its job and to the clear public standards expected of it. If anyone felt differently they had an obligation to raise that with me, no one including Jody did that.”
The Prime Minister has also announced that Minister Harjit Sajjan has replaced Jody Wilson-Raybould as the acting Minister of Veterans Affairs.
Regarding the question of political interference the Prime Minister claimed that the former Justice Minister didn’t bring up any of her concerns during her tenure.
“It was her responsibility to let me know about that, of course she said nothing of that to me last Fall,” said Trudeau.
On the waiving of the solicitor-client privilege the Prime Minister reiterated the fact that he asked the current Attorney General to advise him on the possibility of waiving the privilege.
“There’s a real danger of unintended consequences”, said the Prime Minister, claiming that any new information might interfere with the ongoing court cases against SNC-Lavalin.
When one reporter asked when are Canadians going to get answers about the scandal ahead of the election the Prime Minister replied “as I’ve said, we’re giving answers today.”
Progressive Conservative Party Leader Andrew Scheer addressed the media shortly following the resignation of Veterans Affairs Minister Jody Wilson-Raybould from cabinet today.
During a town hall in Fredericton, Scheer commented on the scandal. Since the original Globe and Mail story emerged, Scheer has been a vocal critic of the Prime Minister’s Office, repeatedly calling for the federal government to provide answers.
“Justin Trudeau’s ethical lapses and his handling of this latest scandal has thrown his government into chaos. If it wasn’t obvious before, Mrs. Wilson-Raybould’s resignation makes it crystal clear that Justin Trudeau is trying to hide the truth with regards to the SNC-Lavalin affair.”
Yesterday, Prime Minister Trudeau addressed concerns around the SNC-allegations in Vancouver, stating that he welcomed the ethnics commissioners investigation,
Trudeau also stated that Mrs. Wilson-Raybould’s presence in cabinet “should speak for itself.” She stepped down from her position in cabinet the next day.
“Yesterday, he had tried to reassure Canadians that nothing unethical took place. In fact he said that Mrs. Wilson-Raybould’s presence in cabinet should speak for itself. Well, given now how that has changed, we can only conclude otherwise,” said Scheer.
Earlier today, Mrs. Wilson-Raybould tweeted that she was submitting her letter of resignation, thanking all Canadian citizens, those of the Vancouver-Granville area, Canada’s veterans and families, as well as officials and ministerial staff. The Prime Minister was suspiciously absent from the letter.
In her resignation, Wilson-Raybould states that she is currently in the process of obtaining advice on the topics that she is legally permitted to discuss in this matter.
“Again, I call on Justin Trudeau in the strongest possible terms to waive any solicitor-client privilege he believes he may have in this case so that Mrs. Wilson-Raybould can speak,” said Scheer. “The longer he refuses to do this, the more guilty he appears to Canadians.”
Trudeau is now in his fifth ethics probe involving his cabinet, with this latest one carrying the most serious implications for the Prime Minister. None of the other probes have rocked the Liberal government quite like this ongoing scandal, though.
“I also repeat my call on the five Liberal members of the Justice committee to do the right thing tomorrow when they vote on whether or not to allow the committee to proceed with this investigation.
The five ministers Scheer mentions are Anthony Housefather, Randy Boissonnault, Ali Ehsassi, Collin Frazier, and Ron McKinnon.
“In the meantime, I have asked Mr. Trudeau to preserve all documents relating to the SNC-Lavalin affair. With his government in chaos and cabinet changes imminent he must take steps to protect this information from being altered or destroyed,” said Scheer.
Trudeau is expected to appear on NEWSTALK radio 1010 at 6 PM.
As many of you now know, this morning, news broke that Veterans Affairs Minister Jody Wilson-Raybould had resigned from Prime Minister Justin Trudeau’s cabinet.
While this is not a huge surprise, given her well-documented discontent with her demotion from Justice Minister and Attorney General to Veterans Affairs earlier this year, it is nonetheless a major development in the whole SNC-Lavalin saga.
As the Globe and Mail originally reported last week, Wilson-Raybould was allegedly shifted from her position as AG into Veterans Affairs because she refused to acquiesce to the wishes of Trudeau and the PMO by overruling the federal director of prosecutions and granting SNC Lavalin a remediation agreement.
While the Prime Minister has faced many questions during the past five days over his decision to remove Wilson-Raybould from her role as AG, he has repeatedly said he did not “direct” her to make any decision and, just yesterday, the PM said that her position in cabinet “should actually speak for itself.”
However, given Wilson-Raybould’s decision to resign from cabinet, the situation has now changed drastically.
In her resignation letter, Wilson-Raybould made careful mention to thank many different groups including Canadians, Canada’s veterans, and her own staff. However, most notably, nowhere in her resignation letter did she thank the Prime Minister.
This major exemption, combined with the testy letter she released following Trudeau’s decision to remove her from her role as AG, in which she made special note that Canada’s legal system must “be free from even the perception of political interference,” certainly raises some questions about Trudeau’s involvement or lack thereof in the SNC Lavalin case.
When speaking with reporters yesterday, Trudeau indicated that Wilson-Raybould would not be commenting on the SNC Lavalin matter because she is bound by solicitor-client privilege as well as cabinet confidentiality.
However, in her resignation letter, Wilson-Raybould said that she has obtained the services of former Supreme Court Justice Thomas Cromwell to advise her on which topics she is “legally permitted” to discuss — a sure sign of more to come.
There is, however, a quicker way for the truth of the matter to come out. If Trudeau is willing to waive his solicitor-client privilege, as Conservative leader Andrew Scheer called for him to do yesterday, then this situation can be clarified and the necessary action can be taken to resolve it.
Interestingly enough, precedent for such a decision already exists amongst past Canadian Prime Ministers. Stephen Harper waived cabinet privilege during the Mike Duffy scandal and Paul Martin did the same during the Gomery inquiry into the federal sponsorship scandal.
When campaigning back in 2015,Trudeau promised many times that his government would do politics “differently,” that they would be positive, open, and transparent, unlike the “cynical” Harper government. He even went so far as to say that he would “make transparency a fundamental principle of our government.”
Trudeau’s actions in the SNC Lavalin matter, not to mention the ongoing Norman scandal, fall far short of the bar he set for him and his government in the heady days of summer 2015.
By using carefully scripted legal language and failing to come clean with the truth of the matter, Trudeau has left Canadians searching for answers and wondering if their judicial system is at risk.
It’s clear that survival, not transparency, is the Trudeau government’s chief priority right now.
A man who once promised a new way of “positive politics” has become just another in a long line of deceptive and dishonest politicians.
So much for “Real Change” my friends.