SCHOLAR: WHAT IS THIS SNC LAVALIN?

SNC Lavalin is an engineering firm based in Canada.  They have experienced several scandals in which have tarnished their business.  These scandals involve major actors in politics.  They have been accused of defrauding the corrupt Libyan dictator.  Specifically, they cooperated with the government of Canada and the Liberal party to get out of potential charges against them.  The McGill scandal shows that this company has a history of being corrupt.  The accountability of the government specifically the Liberal party is therefore in question. 

SNC Lavalin was founded by Arthur Surveyer in 1911.  In 1947 Surveyer, Nenniger & Chenevert became SNC.  They grew into SNC Lavalin after merging with Quebec City based, Lavalin in 1991.  With this merger, they became one of the largest engineering firms in the world.  This merger seemed to be good for both parties however, in recent years this company has come under public scrutiny.  The Board of directors include Ian L. Edwards who is the current President and Chief Executive Officer, followed by Kevin G. Lynch who is the Chairman of the Board, amongst others.  The key shareholders of this company are Caisse de depot et placement du Quebec with 19% of shares and RBC global asset management with 16.6% of shares.

SNC LAVALIN have been accused of defrauding the corrupt Libyan dictator, Moammar Gadhafi of "property, money or valuable security or service" worth approximately $129.8 million.  Police suspected that between 2001 and 2011, SNC Lavalin offered Libyan government officials under the Moammar Gadhafi regime bribes worth $47.7 million to influence decisions.  They then funded the Liberals transferring money to them, violating Canada’s election financing laws. Morin, SNC Lavalin former vice president, between 2004 and 2011 used employees to circumvent restrictions on companies donating to federal political parties. Morin used employees to donate to these political parties or candidates. The company would then reimburse the employees through fraudulent refunds.  $117,804 in total was transferred to political parties during this period.  SNC Lavalin cooperated with the government of Canada and the Liberal party to get out of potential charges against them.  They lobbied the Liberals to create a deferred prosecution agreement (DPA) regime to avoid trial for corporate wrongdoings.  According to the conflict theory of criminology, the legal system is created and represents the interest of the wealthy.  Therefore, what SNC Lavalin did falls in line with the proponents of this theory.  Corporate crime is the only crime that has the ability to be able to create rectifications for their own criminal actions.   

The McGill scandal shows that this company has a history of being corrupt.  Nine people are being charged in the Project Laureat bribery scandal.  This scandal is being labeled as, “the biggest fraud in Canada.” This bribery scandal is pertaining to the construction of a Montreal Hospital.  Pierre Duhaime allegedly helped a public servant breach a trust tied to 22.5 million in bribes which rigged the McGill University Health Center project in favor of SNC Lavalin. They, in this scandal, bribed a public servant to be able to win a bid to build the McGill hospital.  The public servant accepted and the deal was then made.  The police evidently got information on this matter and decided to investigate.  They discovered that the public servant accepted bribes.  SNC- Lavalin is now suing its former CEO, Pierre Duhaime in connection with this bribery scandal.  Pierre Duhaime, according to SNC Lavalin, wronged them when he helped a public servant breach a trust tied to $22.5 million in bribes which rigged the McGill University Health Center project in favor of the company.   Duhaime was placed in 20 months of house arrest after pleading guilty to aiding the hospitals former senior manager Yanai Elbaz to breach trust.  Yanai Elbaz, the public servant, plead guilty to accepting bribes and was sentenced to 39 months in prison.  SNC argues that their reputation has become tarnished due to these embezzlement and faults.  If looked at closer, the hospital that was built by SNC Lavalin is experiencing issues with quality as flooding and various other construction issues plague the build of this hospital.  This is an example of chiseling.  Looking at Pierre’s history reveals a similar incident in Detroit, where a similar structure experienced problems akin to the Montreal Hospital.  This CEO is a repeat offender and it is likely that the chiseling that occurred with the Montreal hospital was intentional.  According to differential association theory, through interaction, individuals learn the values, attitudes, techniques, and motives for criminal behavior.  Perhaps seeing as this company already had a reputation for corporate crime, CEO’s whom were indifferent to crime were attracted to this company which further contributed to the company’s crime.  Through this interaction more motives were  likely developed and the crime continued.  This crime can also be looked at from the perspective of rational choice theory.  This theory attempts to explain that people commit crime in order to be able to experience pleasure.  The CEO’s who have been charged for fraud and or embezzlement were receiving said pleasure because they took the risk to be able to earn more money.  By taking the risk, they were rewarded with increased wealth, which then translates to an overall better quality of life which is directly linked with happiness in turn increasing pleasure. 

Should we trust large corporations when it comes to crime?  Based on the interest group theory of politics, parties are funded by business.  This is very evident when in relation to the company in question.  SNC Lavalin attempted to lobby the government in order to be able to win contracts and escape the punishment of their crimes.  They committed fraud to be able to legitimize the transfer of funds from the company to others.  Evidently, they were discovered, and the former CEO’s are now facing trials.  The objective of these corporations is to gain profit and earn income off of the surplus value that each worker is making.  SNC Lavalin attempted to use shoddy material to build the Montreal Hospital.  They did this because they wanted to maximize their profits.  This had occored at the expense of safety.  To this day, the hospital is experiencing foundational issues.  The capitalist economy seems to be functioning in such a way that they negate ethics.  In order for real change to occur society must first start by developing a stable foundation wherein people can function in an ethical manor.  Therefore, education in ethics is one of the most important prerequisites before even considering improving societies corporate problems.  Teaching ethical business conduct and human rights to future CEO’s would allow for a more accountable corporate culture. 

The SNC Lavalin scandals have opened many people’s eyes on the matter of corporate and government relations.  These scandals will serve as precedents for future corporate operations.  SNC Lavalin was accused and investigated for defrauding a corrupt Libyan leader.  People did not turn a blind eye to the involvement of the government in this matter.  The McGill scandal on the other hand aided a vilification on the company.  The accountability of the government should therefore be in question for if not, we would have no precedent to base our actions on as a society.