SNC-Lavalin is still trying for a settlement. Canada’s public prosecutor wants to make that harder for them

Canada’s director of public prosecutions is firing a new volley at SNC-Lavalin that could hobble the company’s ongoing legal fight for a special settlement agreement over alleged corruption in Libya.

The prosecutor wants the Federal Court of Appeal to strike out a key element of the construction and engineering firm’s challenge of a ruling that went against the company.

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Montreal-based SNC-Lavalin faces corruption and fraud charges related to business deals in Libya from 2001 to 2011. A conviction could bar the company from receiving federal contracts for 10 years.

SNC-Lavalin unsuccessfully pressed the director of prosecutions to negotiate a “remediation agreement,” an alternative means of holding an organization accountable for wrongdoing without a formal finding of guilt.

In a March ruling, a judge tossed out the firm’s plea for judicial review of the 2018 decision.

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SNC-Lavalin is appealing the judge’s ruling, pointing to recent revelations from parliamentary committee testimony from former attorney general Jody Wilson-Raybould and others to bolster its arguments.

The company says “new and deeply troubling facts” that came to light in the political saga show that checks and balances intended to ensure accountability were “critically circumvented,” amounting to a “clear abuse of process.”

However, the director of prosecutions is asking the appeal court to prevent SNC-Lavalin from ever supplementing its original arguments with the new information. If the director’s motion succeeds, it would represent another legal setback to the company’s bid for a remediation agreement.

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SNC-Lavalin has been embroiled in a high-profile political storm since February, when the Globe and Mail newspaper reported that prime ministerial aides leaned on Wilson-Raybould to ensure a remediation agreement for the company. She resigned from cabinet days later.

Wilson-Raybould told the House of Commons justice committee in late February she faced a campaign of relentless pressure to secure an agreement for SNC-Lavalin. Prime Minister Justin Trudeau denies officials acted inappropriately.

The director of prosecutions formally told SNC-Lavalin on Oct. 9, 2018, that negotiating an agreement would be inappropriate in this particular case, prompting the company to ask the Federal Court for an order requiring talks.

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In its March ruling, the Federal Court said prosecutorial discretion is not subject to judicial review, except for cases where there is an abuse of process.

In its filing with the Court of Appeal, SNC-Lavalin contends the process of determining whether to pursue a remediation agreement “was completely flawed.”

The company says testimony before the justice committee made it clear that on Sept. 4, 2018, director of prosecutions Kathleen Roussel provided Wilson-Raybould with a memo that apparently outlined the prosecutor’s case against a remediation agreement.

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By Sept. 16, Wilson-Raybould told the committee, she had formed the view it was unnecessary to intervene in the prosecutor’s decision.

However, SNC-Lavalin stresses in its filing that a dialogue with the prosecutor’s office was still unfolding.

In early September 2018, the public prosecutor agreed to receive additional SNC-Lavalin information addressing concerns, the company says. Its subsequent submissions came in letters to the prosecutor Sept. 7 and Sept. 17.

SNC-Lavalin notes Wilson-Raybould made no mention of these developments and was likely not aware of them. As a result, her conclusion not to intervene “was based on incomplete information,” the company says.

SNC-Lavalin argues Roussel failed to advise Wilson-Raybould that she had agreed to receive additional information from the company and neglected to update her Sept. 4 memo to the then-attorney general.