Authors
Lauren Tomasich
Partner, Disputes, Toronto
Lawrence E. Ritchie
Partner, Disputes, Toronto
Louis Tsilivis
In a significant setback to the enforcement of foreign corrupt practices in Canada, three individuals –including two former SNC-Lavalin executives – were acquitted in a major foreign corruption case last Friday after an Ontario court excluded wiretap evidence that was central to the prosecution’s case. Following Justice Nordheimer’s decision to exclude crucial wiretap evidence, the Crown elected to not call any witnesses at trial.
Criminal charges in respect of alleged involvement in conspiracy
The contract at issue involved supervising the construction of Bangladesh’s Padma Bridge, which would link the country’s southwest with its capital, Dhaka, and was billed as one of Bangladesh’s most challenging engineering project to date. However, after the project became mired in corruption allegations, the World Bank withdrew its $1.2 billion (U.S.) loan for the project.
In April 2012, the RCMP laid charges against two former SNC-Lavalin employees under the Corruption of Foreign Public Officials Act (“CFPOA”) for their alleged involvement in a conspiracy to influence Bangladeshi officials to award a $50 million (U.S.) contract to SNC-Lavalin. In September 2013, the RCMP laid similar charges against three other individuals, including a former SNC-Lavalin executive.
Court finds tipsters unreliable and evidence uncorroborated
The criminal charges against two of the five accused had previously been stayed or dropped. In a ruling last month against the remaining three accused, Justice Nordheimer ordered that the wiretap evidence in the case should be excluded, based on his finding that the information provided in support of the wiretap application (the Information to Obtain, “ITO”) was based on speculation and rumours and lacked direct factual evidence.
Justice Nordheimer stated:
[44] …the evidence of a tip, by itself, is insufficient to establish reasonable and probable grounds. Here, when the information provided in the ITO is critically examined, it turns out that there is very little that is provided, other than the hearsay and rumours that emanate from the tipsters. I use the plural in this instance even though, as I earlier pointed out, it is unknown if there are actually four tipsters or only two. [Emphasis added]
Justice Nordheimer found that the information in the ITO was largely based on emails sent by anonymous or unreliable tipsters, and there was no independent confirmation of any information (aside from generally available information). Moreover, Justice Nordheimer found that one of the tipsters had worked for a competitor of SNC-Lavalin and had acknowledged that he was involved in corruption in respect of another matter:
[61] …None of the tipsters had a history of providing reliable information… tipster #2 was involved with a competing bidder and thus had a strong motivation to discredit another bidder, such as SNC Lavalin. Further, tipster #2 acknowledged being involved in his own corrupt efforts in respect [of another matter] and thus his honesty and credibility are open to question. Still further, it was acknowledged that tipster #2 had a motivation to deflect attention to others regarding his corrupt practices…
Following the Supreme Court of Canada’s seminal 1990 ruling in R. v. Garofoli, Justice Nordheimer ruled that the wiretap evidence itself could not be used to justify the ITO, as the focus must be on the information available to the police at the time of their application – and not acquired through the wiretap.
Key takeaways
Although wiretap evidence can be a useful tool for prosecuting corruption, Justice Nordheimer’s decision and the acquittal highlight that courts will not be shy to review the underlying evidence that purportedly supports an ITO. Should the courts come to the conclusion that the evidence was obtained in a way that would “bring the administration of justice into disrepute” and would “countenance a serious invasion of privacy based on nothing more than suspicion”, the courts will not rely on such evidence for the purposes of obtaining a conviction.
Whether the decision is appealed or not, the SNC-Lavalin saga continues, with ongoing corruption
charges against other former SNC-Lavalin executives in relation to
- Fraud and other wrongdoing in relation to the company’s contract to construct McGill University’s new super-hospital; and
- Embezzlement, bribery, and other wrongdoing in relation to SNC-Lavalin’s contracts in Libya during the Qaddafi regime.
