On the trustworthy company Nalcor keeps

Michael Johansen
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How fortunate for the people of Newfoundland and Labrador that they can trust the big mega-corporations that get so much of their tax money.

How lucky that when the

provincial government takes

$563.8-million away from vital public services (like health care, dental care, the arts, the justice system, legal aid, the civil service, education, secondary education, libraries, cultural programs, pensions, wildlife research, conservation enforcement and the Human Rights Commission) to give $531-million to Nalcor and another $90-million to some as-yet unnamed corporate recipients (no wonder there’s a deficit), how lucky that this province’s citizens don’t need to worry that the transactions are in any way underhanded or illegal — at least, how lucky that so far there’s no indication that one of the main beneficiaries of the provincial deficit (that is, the Quebec-based engineering firm SNC-Lavalin) engaged in any kind of bid-rigging, candidate-buying or bribery to not only secure the lucrative contract to oversee the construction of dams at Muskrat Falls, but indeed to be the main driving force behind the entire project.

Other taxpayers in other provinces and countries have not been so fortunate.


Interesting record

For example, the government of Angola is blaming SNC-Lavalin for endangering the lives of Angolan citizens because the company’s actions have seriously delayed the necessary refurbishment of the Matala hydro dam.

An SNC-Lavalin executive, fired after going public with numerous allegations, plans to testify in a wrongful dismissal suit that the company artificially inflated the cost of the project by $200 million through a covered-up scheme of overpaying fees to several shady Angolan agents.

Similarly, SNC-Lavalin is being accused of stalling Bangladesh’s “most significant infrastructure project,” the construction of the six-kilometre Padma Bridge.

After the World Bank withdrew a $1.2-billion loan and barred a SNC-Lavalin subsidiary from bidding on any more World Bank projects over what it called a “criminal conspiracy” involving bribery, the RCMP were sent to search SNC-Lavalin offices in Toronto.

Also, SNC-Lavalin has made a partial admission about hiring a “bribe facilitator” to secure

$6-billion worth of contracts from the Algerian state-owned oil company Sonatrach. Plus, various agencies, including the RCMP, are investigating the company over a total of $160-million in “improper payments” made to get $1-billion worth of government contracts in Libya.


Right next door

Closer to home — very, very close, in fact — Quebec’s official Charbonneau commission and others have been unearthing numerous allegations of corruption involving the company that was formed in the province in 1991.

Two SNC executives and three others have been charged with “fraud, fraud against government, breach of trust, conspiracy, offering secret commissions and laundering the proceeds of crime” in connection with SNC-Lavalin’s $1.3-billion contract to build the now-delayed McGill University Hospital — charges that involve a mysterious transfer of $22.5-million from the company’s Tunisian subsidiary.

The Charbonneau commission has also been hearing allegations about SNC-Lavalin’s contributions to political parties involved in municipal, provincial and federal elections.

In fact, contributions to city politicians in both Montreal and neighbouring Longueuil allegedly led to the company secretly being awarded contracts even before some projects were publicly tendered.

As well, the Quebec Liberal Party and the Parti Québécois together received around $1-million from SNC-Lavalin between 1998 and 2010, and it appears the company used the same donation scheme (wherein employees and members of their family make the maximum donations first and then get reimbursed with year-end bonuses) to provide at least three Conservative party riding associations with money during the 2011 federal election — even though one of those associations didn’t even field a candidate.

Fortunately, while Nalcor gave the main engineering, procurement and construction management contract to SNC-Lavalin long, long ago in 2010, following what they claim to have been a “competitive selection process,” there is as yet no proof, or as yet any indication that there will ever be proof, to substantiate growing suspicions that SNC-Lavalin made any improper payments to any politicians or public officials in Newfoundland and Labrador.

Yes, the citizens of Newfoundland and Labrador can rest assured that despite appearances to the contrary, their government is not risking $7.4-billion and more of their hard-earned money by giving it to a company with a history of self-serving corruption — at least, any that has been proven.

Yes, we are all so, so lucky!


Michael Johansen is a writer

living in Labrador.

Organizations: SNC-Lavalin, Human Rights Commission, World Bank RCMP Charbonneau commission Sonatrach McGill University Hospital Quebec Liberal Party Parti Québécois

Geographic location: Newfoundland and Labrador, Angola, Bangladesh Toronto.Also Libya.Right Quebec Montreal Newfoundland and Labrador.Yes

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Recent comments

  • Virginia Waters
    April 06, 2013 - 15:19

    Ouch! That must really sting Jim (or Paul or Steve as the case may be). I know the guys who take their marching orders from the eight floor are not much into facts, but Johansen did not allege any conspiracy between SNC-Lavalin and NALCOR. He simply questioned NALCOR's judgement in the choice of the company it keeps. Nor is he stretching the truth. SNC's problems with the law are a matter of public record. Didn't your mother tell you when you were growing up that hanging out with the wrong kind of people would eventually rub off - that your reputation can be no better than the company you keep? But it seems that where money is to be made - especially real big money, even the sensible advice that mothers are known for tends to go out the window. No Jim, somehow I don't think there is any job waiting for you at the Telegram.

  • saelcove
    April 06, 2013 - 13:37

    Jim, no conspiracy just facts, do not be afraid to do a little research you may actually learn something

  • david
    April 06, 2013 - 13:21

    The most single damning indictment of Muskrat Falls came a few months ago, when Nalcor responded to questions of the project's technical feasibility and potential for problems and cost overruns. The entire, pithy answer amounted to saying that SNC-Lavalin was involved in the project, as a sort of "self-evident" goodness that should make everyone relax. A couple of things to note about this: 1) Even when SNC did what it did in backwards, corrupt, foreign countries to "grease the wheels", it likely did not expect or enjoy the level or display of public worship it has received here from Nalcor. If it wasn't clear before then, this surely was seen by SNC as a stunning admission of how in-over-our-head Newfoundland is, and an unofficial invitation to obscenely overcharge us as clients. 2) If SNC was able and willing to conduct such heinous, corrupt activities as it is accused of in its HOME province of Quebec, what should a rational person think they might be willing to pull on in Newfoundland, given such blatant, extreme naivete of the cheque signers, our long history of being the sadsack rubes at the table, and the political panic to drive this thing forward at breakneck speed?

  • EDfromRED
    April 06, 2013 - 13:16

    I think we should trust the PC's and their budget, that hurts the poor and middle class and protects and coddles corporations and the rich. I'm sure they'll spread the wealth: demands for escort services, Drug Dealers, Poll Padders and paid Bootlickers are going to skyrocket.

  • Shouldn't the truth be to be told Jim, it steers us away from trouble?
    April 06, 2013 - 12:22

    What this columnist has written about appears to be the truth, that is if you believe what the National Media has been reporting. Isn't the truth better to be told Jim? What has gotten us in trouble over the past with our resource development is that everything was secretive and nobody in the electorate was aware of what was coming down the chute and it is plain to see that we have not benefited from the development of those natural resources. It is not much that we can do about the past other than guiding our future resource development on the mistakes of the past. We cannot afford to give anything else away for the sake of the other provinces economies, we need them to keep our province running with jobs, industries and the resulting profits from the development of the resources is the catalyst to make that wonderful even happen.

  • Jay
    April 06, 2013 - 12:16

    Jim, Well said. The writer's constant conspiracy theme about everybody victimizing Labrador on every issue is an easy, cheap way to write an article. However, most Labradorians can see though him. He can make the wildest claims he wants, speculate on the worst case scenario for everything, and never have to back anything up with facts. If any of it ever comes true, he'll say "I told you so." If it doesn't, nobody will even remember he said it. This guy makes Chicken Little sound like a calming influence.

  • Jim
    April 06, 2013 - 11:59

    How does the Telegram publish this conspiracy theory dog-crap??? Why not make your reporters do some real investigative research before publishing a column fit for the National Enquirer. With the quality of MJ's recent columns at least I know a job will always be waiting for me at the Telegram. This guy is a broken record. For months now he basically regurgitates his same anti-Muskrat article with a few tweaks here and there. You are looking for Labrador input but there has to be somebody in the Big Land with more to write about than this joke.

    • S Redgrave
      S Redgrave
      April 06, 2013 - 12:41

      Perhaps MJ knows more about this than you are capable of understanding. Whenever BILLIONS of dollars are involved---THERE IS A CONSPIRACY somewhere. You are fortunate the Telegram lets you insult them free of charge. If MJ were to did into your history, I'm sure he'd have a lot of fun and chuckles.

  • Cyril Rogers
    April 06, 2013 - 09:30

    Given the history of SNC-Lavalin, it is more than disconcerting to know that they are the project leaders for Muskrat Falls. Also, given the provincial government's penchant for enacting legislation that hides information from the public, one could form the conclusion that there is some sort of collusion going on. Because of the secrecy surrounding this project, nobody outside the corridors of power really know how much influence SNC-Lavalin is exerting or if they and the government are, in fact, violating the public tendering process. It gives me no comfort to know that this company is playing such a prominent role nor does Bill 29 give me any assurance that the government is above board. Is perception reality in this instance? We don't know....but heaven help us if we find out that this whole process was seriously flawed and the truth was hidden. By then it would be too late and, no matter how much disgrace it would heap upon the PC administration, the fact remains that we will be stuck with a giant white elephant.

  • The allegations you mentioned in your column have been public knowledge for years?
    April 06, 2013 - 09:28

    Excellent article Michael! I have been reading all those allegations you have stated for years now, some of which are true according the the Firm's own admittance. I have gleaned the information from our National News Media, so then, why weren't our elected politicians, who are responsible for administering good governance in the development of our natural resources and administering our hard earned tax dollars properly aware of what was going on with this Firm? Why did our government not delay engaging in doing business with the Firm until the allegations were cleared up? Were our politicians inept or is it they are Corrupt? It is a terrible state of affairs given the fact so much of our needed tax dollars were syphoned off to keep the Muskrat Falls Project in orbit, when so much is needed to keep our province' affairs running.

  • Maurice E. Adams
    April 06, 2013 - 08:40

    If not for a cover up, why did government need Bill 29? If there is nothing to hide --- why is there need for a Secrecy Act?

  • Corporate Psycho
    April 06, 2013 - 08:28

    Scary stuff.

  • lonenewfwolf
    April 06, 2013 - 08:23

    well said. we need answers about this whole boondoggle. the abitibi expropriation, the private dams that were taken and the resulting water rights granted by harper via the nafta case. that leading into the offshore contract mismanagement and resulting loss inside nafta over clauses there and ending with muskrat falls (as well as perhaps gull island) and the transmission deal with emera. the people have been abused and should not be forced to pay for this mess created by a few individuals.