An Ottawa-area businessman convicted of arranging illicit payments for public officials in India in a bid to win a $100 million security contract with Air India received a three-year prison sentence today at the Ontario Superior Court in Ottawa.
The landmark bribery case of Nazir Karigar ihas been watched closely by law enforcement and international business observers, as it marks the first sentence handed down against an individual under Canada’s Corruption of Foreign Public Officials Act (CFPOA).
The Crown had asked for a four year prison term.
The defence was asking for a conditional sentence for Karigar, who was convicted of conspiring in 2005 and 2006 to bribe a government of India minister and officials at the state-owned airline in hopes of winning the contract for Cryptometrics Canada, a subsidiary of a U.S. company, to supply facial recognition technology.
The maximum Karigar could have received was five years in prison, although the law was recently amended for future prosecutions, raising the maximum to 14 years.
RCMP beefs up effort against foreign bribery
"Karigar was the first individual charged in Canada. We did go to trial. It wasn’t somebody who pleaded guilty," said RCMP Assistant Commissioner Gilles Michaud.
Michaud says the case also establishes important legal precedents.
"We didn’t have to demonstrate that there was an exchange of money to pay the bribe," Michaud explained, noting Canadian investigators also didn't need to obtain detailed bank records but instead relied on emails and letters documenting the conspiracy. "Just an intent to pay a bribe was sufficient to convince the court that there was a criminal act that was committed."
Michaud oversees the National Division, which in June 2013 was restructured and enhanced to include 115 full time investigators to focus exclusively on "sensitive and international" investigations (ranging from the Senate expense scandal to the on-going probe of SNC-Lavalin.)
"It was felt that we weren’t doing enough," Michaud told CBC News, acknowledging his National Division is keenly aware of Canada’s track record.
Canada's anti-bribery record improving
Canada has faced years of criticism from the OECD and the watchdog group Transparency International for doing "little or no enforcement" against companies paying bribes in developing countries, despite being a signatory to international anti-bribery conventions.
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In 2012, Canada’s global ranking improved slightly to acknowledge "moderate enforcement" after the RCMP and Quebec provincial police laid a series of charges against executives of SNC-Lavalin in cases that have yet to come to trial.
"The fact that we only had these very few convictions, I think, was a very strong signal that there was a problem with Canada," says Huguette Labelle, chair of Transparency International .
She argues recent changes expanding the scope and power of Canada’s foreign bribery laws, as well as additional economic crime investigators assigned to the RCMP, are now changing Canada’s capacity to prosecute companies and individuals.
"Now that these two aspects have been dramatically modified, I think we are likely to see a number of convictions coming forward." She adds it's also likely a significant number of new investigations are underway.
Four convictions since 1999
Canada's anti-bribery record
1999 Canada passes the Corruption of Foreign Public Officials Act.
2005 Hydro Kleen Systems Inc. (Alberta) fined $25,000 for bribing U.S. Immigration and Customs Enforcement officer to help get workers into U.S.
2011 Niko Resources (Alberta) fined $9.1 million for bribing Bangladesh cabinet minister for natural gas drilling rights.
2013 Griffiths Energy International Inc (Alberta) fined $10.35 million for paying a $2 million bribe to a diplomat’s wife to secure oil rights in Chad.
2013 Nazir Karigar becomes the first individual convicted under Canada’s anti-bribery law.
May 23, 2014 Karigar sentenced to three years.
The RCMP has only prosecuted four cases resulting in convictions since Canada passed the CFPOA in 1999.
Until Karigar, the prosecutions were all against companies which paid fines. No individuals were punished.
But in 2012 the RCMP changed tactics and began charging individuals directly, as in the case of their ongoing investigation of SNC-Lavalin, which has resulted in charges against six SNC-Lavalin executives and several other employees.
"That is why you are starting to see, probably, a bit more results, even though we haven’t had convictions yet, but there’s been a significant number of individuals that have been charged over the last year here in Canada, and they are still waiting for trial," Michaud said.
"I would hope that, and it's a measure of our success, we can change the perception of these agencies, international agencies, around the efforts of Canada in respect to corruption of foreign officials," he said.