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Canada’s ethics watchdog finds Prime Minister Justin Trudeau violated ethics law in SNC-Lavalin case

Trudeau’s political scandal has returned — two months before federal elections.

Justin Trudeau, Canada’s prime minister, attends a working lunch on the first day of the G20 summit on June 28, 2019, in Osaka, Japan.
Kiyoshi Ota-Pool/Getty Images

Canada’s ethics commissioner released a report on Wednesday that found Prime Minister Justin Trudeau violated ethics rules when he tried to pressure his former justice minister and attorney general to drop criminal charges against a Quebec-based company.

The report dropped just as Canada is preparing for federal elections in October, potentially complicating Trudeau’s reelection bid.

In February, Trudeau became embroiled in a major political scandal after he and his political allies were accused of pushing Canada’s now-former minister of justice and attorney general, Jody Wilson-Raybould, to drop criminal corruption charges against the Quebec-based engineering company SNC-Lavalin.

Instead, they wanted Wilson-Raybould to merely issue financial penalties, which would allow the company, which was charged with having bribed Libyan officials, to avoid a 10-year ban on bidding on federal contracts. Trudeau defended himself by saying he wasn’t trying to improperly pressure the attorney general but wanted to advocate for this route to protect jobs that might be lost if SNC-Lavalin were blocked from federal contracts.

Canada’s ethics commissioner Mario Dion largely backed up the allegations against Trudeau in a 63-page report that came out Wednesday, stating that Trudeau had used the authority of his office “to circumvent, undermine and ultimately attempt to discredit the decision” of both prosecutors and Wilson-Raybould.

The report outlines Trudeau’s sometimes “flagrant” attempts to influence Wilson-Raybould “directly and indirectly” over the SNC-Lavalin prosecution, and found that “partisan political interests were improperly put to the Attorney General for consideration in the matter.” Dion also chastised Trudeau’s office for failing to offer its full cooperation to the investigation.

Trudeau said Wednesday that he takes responsibility for his actions, but that he disagrees with some of the report’s findings that he acted improperly. “We recognize the way that this happened shouldn’t have happened,” Trudeau told reporters. “I take responsibility for the mistakes that I made.”

But Trudeau also defended himself, saying he wouldn’t apologize for “standing up for Canadian jobs.”

“My job as prime minister is to stand up for Canadians and defend their interests,” Trudeau said. “Yes, it is essential that we do that in a way that defends our institutions and upholds prosecutorial independence, but we need to talk about the impacts on Canadians right across the country of decisions being made.”

The ethics report doesn’t carry any serious legal consequences for Trudeau, though the prime minister’s political opponents are calling for a criminal investigation. (For a US comparison, this watchdog report a bit more along the lines of a US inspector general report, and Trudeau’s actually been dinged by the ethics commissioner before for conflict of interest violations.)

But these findings could be a big political liability for Trudeau and his Liberal Party with just 10 weeks to go before elections.

Trudeau, who became prime minister in 2015, made transparency, inclusion, and openness a centerpiece of his leadership philosophy, and he became democracy’s biggest cheerleader. He modeled his governing platform on promoting gender equality and indigenous rights.

His alleged pressure campaign and the eventual sidelining of Wilson-Raybould — a former prosecutor and indigenous woman who was once a symbol of Trudeau’s diverse and gender-balanced cabinet — very much looks like a betrayal of those values.

“This is the bloom off the rose of the prime minister,” Jonathan Rose, a political science professor at Queen’s University in Ontario, told me in February.

The SNC-Lavalin case predates Trudeau. But it turned into a scandal under his watch.

SNC-Lavalin is a major engineering and construction firm based in Montreal, Quebec, with operations all over the world.

In 2015, the Royal Canadian Mounted Police (RCMP) — Canada’s police force — alleged that SNC-Lavalin paid bribes to members of the Libyan government, including former dictator Muammar Qaddafi, to the tune of 48 million Canadian dollars. Officials also alleged that SNC-Lavalin defrauded the Libyan government of nearly CA$130 million — money that was tied to construction projects in the country from 2001 to 2011.

SNC-Lavalin denied these charges, though it has a reputation for shady business practices abroad. But if found guilty in this Libyan case, the company would feel the consequences in Canada. Specifically, SNC-Lavalin would be barred from bidding on any Canadian government contracts for 10 years.

That’s a big deal: SNC-Lavalin is involved in some major infrastructure projects in Canada and employs about 9,000 people in the country — a decade-long ban would be detrimental to its domestic business and could potentially result in serious job losses.

And, as mentioned, SNC-Lavalin is based in Quebec. The company is seen as the province’s “crown jewel,” according to the Canadian outlet CTV. Quebec is also politically important for Trudeau’s Liberal Party and for the prime minister himself (he represents a constituency there) ahead of a potentially tight federal election in October.

This is the backdrop for the scandal, which broke in February when the Globe and Mail reported that Trudeau’s office (often referred to as PMO, or the prime minister’s office) pressured Wilson-Raybould to intervene in the criminal case against the company.

They allegedly pressured her to ask prosecutors to pursue a “deferred prosecution agreement,” which would result in financial penalties against the company rather than a formal prosecution — which would mean no 10-year ban.

These types of deferred-action prosecutions are becoming pretty common in the United States for big corporations, but they were introduced in Canada just last fall. Reports in the Canadian press have indicated that SNC-Lavalin lobbied for this change in the law, and very likely hoped to take advantage of it.

The report in the Globe and Mail relied on anonymous sources but implicated Trudeau and his close aides. The prime minister denied the allegation, and said that neither he nor anyone else in his office “was directed ... to take a decision on this matter.” To be clear, Trudeau didn’t deny talking about the SNC-Lavalin case with his cabinet ministers, but he said he’d never instructed anyone to interfere.

Without getting too deep into Canadian politics, it’s important to point out that in Canada, attorney general and justice minister is one position held by one person, who is also an elected member of Parliament.

So in her role as justice minister, Wilson-Raybould was a member of Trudeau’s cabinet, and it might not be out of the ordinary for the prime minister to discuss legal policy, or even a political or economic problem like the SNC-Lavalin case, with his advisers.

But since Wilson-Raybould was also the attorney general, she had the final say over the country’s prosecutorial arm, which is supposed to be independent of political influence. (This scandal revived calls to separate the two roles because of the inherent conflict, although a former member of Trudeau’s cabinet released a report Wednesday that advised against splitting the jobs.)

Trudeau admitted he discussed the SNC-Lavalin prosecution with Wilson-Raybould, but said there was no pressure campaign executed by him or anyone close to him, and he’s said the decision on how to handle the company was “hers to make.” Also, nothing changed practically: SNC-Lavalin still faces criminal charges.

There’s a small wrinkle here. In early January, before the SNC-Lavalin story went public, Wilson-Raybould was moved in a cabinet reshuffle from the role of attorney general and justice minister — where she had served since 2015 — to the role of minister of veterans affairs, which was widely seen as a demotion. Law professor and Liberal MP David Lametti was named the new attorney general and justice minister.

Cabinet reshuffles happen. But Wilson-Raybould was a key member of Trudeau’s gender-balanced, diverse cabinet and a prominent indigenous leader in a government that promised better relations with Canada’s indigenous population. The fact that she was replaced by a white man already didn’t look great, but when reports that Trudeau and his office allegedly pressured Wilson-Raybould over SNC-Lavalin emerged, the personnel shift suddenly looked even worse.

The scandal spiraled from there. On February 12, Wilson-Raybould abruptly resigned from Trudeau’s cabinet altogether, and a few weeks later, on February 27, she delivered startling testimony before the judiciary committee in Canada’s House of Commons.

Wilson-Raybould told members of Parliament that between September and December 2018, she was the subject of a “consistent and sustained effort by many people within the government to seek to politically interfere in the exercise of prosecutorial discretion in my role as the attorney general of Canada.”

She called these attempts an “inappropriate effort” to secure a deferred prosecution agreement for SNC-Lavalin. But even in calling the pressure improper, she also said that in her opinion, it “was not illegal.”

Trudeau, at the time, continued to blame the issue on a lack of trust between his office and Wilson-Raybould. He also doubled down on the point that the SNC-Lavalin’s criminal prosecution could have resulted in big job losses in Canada, and it was his responsibility to weigh those matters of significant national interest.

SNC-Lavalin scandal is bad for Trudeau. How much will it matter in October?

The biggest problem of the SNC-Lavalin case for Trudeau looked like the optics: This scandal was extremely off brand for him.

He wasn’t supposed to be this kind of politician, which is why this controversy resonated so strongly. Wilson-Rayboud’s testimony about receiving “veiled threats” and being “barraged” by senior officials contrasts sharply with Trudeau’s image as a positive, progressive politician — his “sunny ways” style of politics.

And the allegations that the prime minister pressured a respected female indigenous minister, then appeared to demote her, also undercut his position as a champion of gender equality and indigenous rights.

“It certainly shows that their government isn’t any better than any other government,” Lori Hausegger, a political science professor and the head of the Canadian Studies program at Boise State University, told me in February.

Wednesday’s ethics report basically confirmed all that: Trudeau violated ethics rules, and what Wilson-Raybould said happened largely did. She called the report a “vindication” on Wednesday.

“In a country as great as Canada, essential values and principles that are the foundation for our freedoms and system of government should be actively upheld by all, especially those in positions of public trust,” she said in a statement.

Conservatives, currently the main opposition party, also seized on the ethics report and revived their calls for a criminal investigation into Trudeau. “Today, Justin Trudeau has been found guilty of illegally interfering to block the fraud and bribery trial of a Liberal-linked corporation,” Andrew Scheer, the Conservative leader who’s basically challenging Trudeau for the prime ministership, said Wednesday. “What we have now is a clear picture of who Justin Trudeau truly is.”

Whether voters will reject this version of Trudeau in October, or just accept it and give him another chance, is the biggest question looming over the release of this report. After this scandal broke in February, some polls showed that Trudeau and his Liberals really did take a big popularity hit. They have since recovered, but not completely. That rise came over many months; now there are just weeks to recover from the political fallout.