SNC-Lavalin flagged possible breakup of company to Quebec government while seeking deal to defer prosecution

Premier François Legault met with officials from SNC-Lavalin not long after being elected. Emails suggest the company wanted to discuss it's possible break-up and avoiding trial on fraud charges.

Emails obtained by CBC News reveal more about how the engineering giant turned to Quebec for help

As part of its lobbying campaign to secure a deferred prosecution agreement, SNC-Lavalin turned to François Legault's newly elected government in the fall of 2018. (Christinne Muschi/Bloomberg)

As engineering giant SNC-Lavalin sought to avoid prosecution on fraud charges in the fall of 2018, an executive reached out to the Quebec government to raise the possibility the company could be dismantled.

Emails obtained by CBC News suggest the company wanted to discuss the link between a fraud trial and the prospect of a foreign takeover, an outcome that could have been politically damaging to Premier François Legault.

In early October, 2018, federal prosecutors told the company it would not be offered a deferred prosecution agreement (DPA) on charges related to the company's activities in Libya in the 2000s.

That decision contributed to a collapse in the company's share price and intense lobbying efforts directed at the highest levels of the federal Liberal government.

The Montreal-based company appealed to senior advisors to the prime minister and the finance minister to reverse the decision.

A DPA would have allowed it to pay a fine instead of heading to trial, where a guilty verdict could have curtailed its ability to bid on lucrative Canadian government contracts.

As part of its lobbying campaign, the company also turned to Legault's newly elected provincial government.

Quebec Premier François Legault met with officials from SNC-Lavalin, including then CEO Neil Bruce, shortly after being elected in October 2018. (Jacques Boissinot/The Canadian Press)

On Oct.15, 2018, still several days before Legault's new government ministers were sworn in, SNC-Lavalin's head of lobbying had a phone conversation with one of the premier's top economic advisers, Carl Renaud.

The following day, the lobbyist, executive vice-president Erik Ryan, emailed Renaud a Globe and Mail article with the headline "SNC shares sag amid corruption probe, increasing takeover risk."

The email also contained a report by BMO Capital Markets detailing the potential upside of breaking up SNC-Lavalin in light of the failure to obtain a DPA and a document summarizing the general benefits of DPAs.

"I hope that we can organize a meeting or a call with Mr. Legault," Ryan said in the email.

Several hours later Ryan sent another email, with additional documentation about Canada's DPA regime. "Do you think we can speak today about the meeting," he asks Renaud.

Top-level tête-à-tête

The emails were made available to CBC News last week in response to an access-to-information request that was filed in March, 2019.

The meeting with Legault and SNC-Lavalin ultimately took place on the afternoon of Oct. 22, 2018. It was attended by the company's president and CEO, Neil Bruce, and Ryan.

Along with Legault, several other senior Quebec government representatives were also present, including Economy Minister Pierre Fitzgibbon, Legault's chief of staff Martin Koskinen and Yves Ouellet, the top bureaucrat in the Quebec government.

No further information was provided to CBC News as part of the access-to-information request.

Neil Bruce stepped down as president and CEO of SNC-Lavalin in June 2019. (Paul Chiasson/The Canadian Press)

Legault's office declined to answer questions about what was discussed at the meeting. "We won't comment on the premier's private meetings," spokesperson Ewan Sauves said in an email.

Fitzgibbon's office also declined to comment, saying simply "the content of the meeting is confidential."

In a statement to CBC News, a spokesperson for SNC-Lavalin said it was routine for company officials to meet with incoming premiers. The statement also mentioned wanting to clarify the company's situation amid the speculation raised by the failure to secure a DPA.

"As a global company headquartered in Montreal providing thousands of jobs to Quebecers and Canadians, it is common practice to update newly elected leaders of the Government of Quebec on our priorities and ongoing efforts to grow and prosper especially given that there were already many unsubstantiated rumours circulating about the future of SNC-Lavalin," Harold Fortin said in an email.

In the months following the meeting, Legault and Fitzgibbon both publicly advocated granting a DPA to SNC-Lavalin, and supported other measures to protect the company as well.

Legault spoke openly in December 2019 about steps his government was taking to prevent a foreign takeover of SNC-Lavalin, a possibility given its tumbling share price.

This included the admission, considered unusual by some observers, that he had spoken with Quebec's independent pension fund manager, the Caisse de dépôt et placement du Québec, about taking a minority stake in SNC-Lavalin that would be large enough to block a takeover bid.

A senior adviser to Trudeau, Mathieu Bouchard, also spoke with the CEO of the Caisse, who at the time was Michael Sabia. That conversation, according to an investigation by the federal ethics commissioner, took place around Oct. 23, 2019.

Bouchard "understood from his conversation with Mr. Sabia that the Caisse de dépôt was working to ensure that no relocation would occur," the commissioner's report said.

Trudeau avoided meeting with SNC's CEO

Fitzgibbon has acknowledged in the past that he spoke with a number of federal ministers about granting a DPA to SNC-Lavalin, but stopped when the issue erupted in scandal in February 2019.

It began to emerge publicly then that Trudeau and members of his staff had pressured the federal justice minister, Jody Wilson-Raybould, to override the decision not to grant SNC-Lavalin a DPA.

Wilson-Raybould said later she was stripped of the justice portfolio for refusing to bend to their requests.

Former federal justice minister, Jody Wilson-Raybould, said she was stripped of the justice portfolio for refusing to SNC-Lavalin a DPA. (Cole Burston/The Canadian Press)

The investigation by the federal ethics commission found Trudeau violated the Conflict of Interest Act for the actions he took trying to influence Wilson-Raybould.

That investigation also revealed that Bruce, SNC-Lavalin's CEO, had sought a meeting with Trudeau as well, writing to his staff on Oct. 15, 2018.

The Privy Council Office advised Trudeau in November 2018 not to take the meeting "in order to avoid public perception of political interference in a matter that was, at that time, before the courts."

The SNC-Lavalin controversy ended in December 2019 without a trial or a DPA. The company pleaded guilty to a fraud charge and agreed to pay a $280-million fine.

In exchange, federal prosecutors dropped the remaining charges against the company, and allowed it to continue bidding on public contracts in Canada.

Neil Bruce retired in 2019. SNC-Lavalin's shares closed at $28.26 on Wednesday, less than half the highs reached in June 2018.