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The Political Economy of Corporate Bribery: SNC-Lavalin Group as a Case Study

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Abstract

In 2013, the World Bank suspended financing for the construction of the Padma Multi-Purpose Bridge in Bangladesh following allegations of massive payoffs from SNC-Lavalin Group (Canada) to several Bangladeshi officials and politicians. This resulted in the arrest of a major SNC-Lavalin employee in Switzerland, who pled guilty and co-operated with the Royal Canadian Mounted Police (RCMP) in Canada. This article examines the intricacies of the corruption allegations against SNC-Lavalin in Canada. There are suggestions of a toxic corporate culture historically noted by Sutherland (1949, 1983). As well, a criminal action was commenced against the corporation, which lead to extensive political fallout and a guilty plea. Both the outcome of this prosecution and its theoretical implications raise important questions about on the role of structural pressures and “holes” in global capital markets. Here, we invoke Quinney’s (2002) analysis of capital, Chambliss’ (1994) notion of law and markets, and Merton’s (1957) theory of organizational strain.

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Notes

  1. See US Department of Justice (2020). Related Enforcement Actions: 2020. Retrieve from: https://www.justice.gov/criminal-fraud/case/related-enforcement-actions/2020.

  2. Despite this drawn-out saga, the charges against all charged by RCMP, including the Kevin Wallace, Ramesh Shah, and Mohammed Ismail would eventually be dropped. The charges against SNC employee Mohammad Ismail were the first to be dropped. Ismail eventually became a witness against SNC-Lavalin for the Crown (Seglins, 2019). The charges against Kevin Wallace, Ramesh Shah, Abul Hasan Chowdhury, and Zulfiquar Ali Bhuiyan were thrown out by Justice Ian Nordheimer of the Ontario Superior Court on February 10, 2017 (Seglins, 2019; McFarland, 2017). Justice Nordheimer claimed that the RCMP did not have enough evidence for wiretaps which were obtained in 2011 against the executives. The judge called the evidence used to obtain the warrants “nothing more than speculation, gossip and rumor” and that no “factual evidence” had been presented to justify the wire taps (McFarland, 2017).

  3. On Feburary 1, 2019, Duhaime plead guilty to one charge, helping a public servant commit a breach of trust (Montpetit, 2019). As a part of his guilty plea, the other 14 charges against him were dropped (Montpetit, 2019). He received a sentence of 20 months of house arrest and 240 h of community service. He was also ordered to pay $200,000 restitution to a fund for crime victims (Montpetit, 2019).

  4. In correspondence dated January 12, 2016, Public Works Canada affirmed receipt of our ATIP request under case file A-2015–00,618/AR. We later filed an appeal of the delay in obtaining this document with the Information Commissioner of Canada, dated February 23, 2016.

    However, on March 4, 2016, we received a CD-ROM alleged to contain a copy of the agreement. Examination of this CD-ROM showed that it contained only one document titled “Administrative Agreement between SNC-Lavalin Group Inc. and Public Services and Procurement [Canada] for the Purpose of the Integrity Regime.” The document was about 25 pages long, and only the title page and signature page (p. 14) were disclosed. All the other pages were deleted on the basis that they allegedly constituted a trade secret containing confidential financial, commercial, scientific, or technical information, the disclosure of which could be expected to prejudice the competitive position of SNC-Lavalin. We immediately appealed that decision to the Information Commissioner on March 4, 2016, under case file 3215–01,974.

  5. We finally received a decision from the Information Commissioner’s staff on January 5, 2017, enclosing the redacted copy. It is very difficult to challenge these redactions in Federal Court, given the time, limited funds, and low likelihood of success before a member of the judiciary. As the reader can observe, just this administrative appeal took over one (1) year to consummate.

  6. Further discussion of this claim is found in Shelden et al., (2016, pp. 23–25).

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Authors and Affiliations

  1. Department of Sociology, King’s University College, Western University, London, Canada

    Matthew G. Yeager

  2. Department of Criminal Justice, University of Nevada, Las Vegas, USA

    Randall G. Shelden

  3. Department of Sociology, Western University, London, ON, Canada

    Alyssa Holden

Authors
  1. Matthew G. Yeager
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  2. Randall G. Shelden
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  3. Alyssa Holden
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Correspondence to Matthew G. Yeager.

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Yeager, M.G., Shelden, R.G. & Holden, A. The Political Economy of Corporate Bribery: SNC-Lavalin Group as a Case Study. Int Criminol 1, 341–355 (2021). https://doi.org/10.1007/s43576-021-00037-8

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  • DOI: https://doi.org/10.1007/s43576-021-00037-8

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