Privatization scheme bribery case ends with guilty plea on least serious charge
19 February 2019
A series of criminal trials over a bribery scandal over a P3 privatization scheme ended last week with people admitting that $22.5 million in bribes were paid, but with no one being convicted of actually paying them. For those naïve enough to believe that the justice system does a good job of policing the privatization industry, it was a very bad week.
In the MUHC P3 case, the secrecy surrounding privatization schemes may have been the getaway car that allows those responsible for paying the bribe to escape.
In 2012, it was revealed that senior executives at the McGill University Health Centre (MUHC) had received $22.5 million in bribes to ensure that a consortium led by SNC-Lavalin got the contract for the P3 privatization scheme for a new hospital. An investigation led to 9 people being charged with a number of offences, however, the low number of convictions is yet another reason to worry about the ability of privatization schemes to escape the scrutiny.
Former CEO of SNC-Lavalin convicted of only 1 of 15 charges
Pierre Duhaime, the former CEO of SNC-Lavalin, originally faced 15 criminal charges. Last week, his criminal case ended with a guilty plea for only one of the less serious charges. 14 other charges, including fraud, conspiracy and issuing false documents, were dropped.
Other senior SNC-Lavalin executives also avoided being convicted of more serious charges
Two other senior SNC-Lavalin executives faced a combined total of 27 criminal charges. These charges also included fraud and the use of false documents. Riadh Ben Aïssa, a former vice-president of SNC-Lavalin, plead guilty to one of the less serious charges and had the remaining 15 charges dropped. Another former vice president, Stephane Roy, was acquitted of 11 charges after the crown decided not to present evidence.
A $22.5 million bribe was received but never paid?
Being charged does not mean that a person is guilty. However, the outcomes of the criminal cases arising from the MUHC P3 privatization scheme leave a $22.5 million dollar question unanswered.
There is no question that a $22.5 million bribe was paid to senior MUHC executives to ensure that the consortium led by SNC-Lavalin got the contract for the P3 privatization scheme. Because of the value of this contract — an estimated $3.7 billion once all lease payments are included — a police officer has described the MUHC privatization scheme bribery case as the “biggest corruption fraud in the history of Canada”.
But at the end of all the criminal cases, no one has been convicted of paying the bribe and the consortium that benefitted from the bribe still has the contract for the P3 privatization scheme.
Role of the secrecy surrounding privatization schemes needs to be looked at
Secrecy is an integral part of privatization schemes. Even though the public are paying for privatized services, the contracts and other agreements dealing with costs and service levels are not public documents. When copies of these documents are obtained through access to information requests, key information is blacked out.
The National Union of Public and General Employees (NUPGE) and other privatization critics have repeatedly raised concerns about how the secrecy surrounding privatization means that accountability is lost. In the case of the MUHC P3, the secrecy surrounding privatization schemes may have been the getaway car that allows those responsible for paying the bribe to escape.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE