VANCOUVER—As another scandal plays out in Ottawa, government watchdog groups are calling for wider scrutiny of SNC-Lavalin’s activities in jurisdictions like British Columbia, where the company donated to the ruling political party at the same time it was being awarded large public infrastructure contracts.

However, the watchdog groups also argue that the evidence and allegations of corruption against the Quebec engineering firm demonstrate why all corporate donations need stronger rules and regular audits.

“It’s essentially a form of legalized bribery,” said Duff Conacher, founder of Ottawa-based Democracy Watch, referring to lax rules allowing corporations that benefit from political decisions to donate to political parties.

For years, Democracy Watch has advocated campaign finance limits because of the risk that large donors can wield oversized influence on politicians who start to feel more beholden to the wealthy people, corporations and unions that fund their campaigns than to the wider electorate.

Though Quebec, British Columbia and the federal government have lowered donation limits and banned union and corporate donations, companies have found ways around those regulations. Conacher said the rules end up being a “charade” without regular audits.

For example, Conacher noted, in 2016 the federal election commissioner found SNC-Lavalin had funneled $118,000 in donations to the federal Liberal and Conservative parties, meaning that senior executives asked employees to make donations as individuals; the company then reimbursed employees through “fictitious bonuses or other benefits.”

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In an emailed response, the Liberal Party said it returned the money and improved its donation acceptance procedures. The Conservative Party of Canada did not immediately respond to a request for comment.

Dogwood, a B.C. environmental organization, is calling for a deeper examination of SNC-Lavalin’s activities in British Columbia and a full inquiry to examine possible links between political donations and public works contracts. Quebec’s Charbonneau Commission, which concluded in 2014, found that many companies, including SNC-Lavalin, regularly bribed politicians to get government contracts.

“To be fair to (SNC-Lavalin), we haven’t found the same allegations about how they’re operating in B.C.,” said Lisa Sammartino, a campaign co-ordinator with Dogwood. “Quebec knows because they had an investigation … But I think it’s worth looking at the bigger picture of how the company operates and that bigger picture of how we give out our public contracts.”

On Feb. 25, Dogwood published a blog post scrutinizing donations made by SNC-Lavalin and related parties to the BC Liberals, pointing out that the company was awarded several large public infrastructure projects over the same period.

Through Elections BC’s political donations database, the Star verified that between 2005 and 2013, SNC-Lavalin and the company’s chairman of the board at the time, Gwyn Morgan, donated a combined total of $196,157 to the BC Liberal Party.

During the same period, SNC-Lavalin was part of engineering consortiums that worked on the Canada Line and Evergreen Line rail transit projects in Metro Vancouver, the William R. Bennett Bridge in Kelowna and upgrades to the Sea to Sky Highway between Vancouver and Whistler.

In an emailed response to the Star, Nicolas Ryan, a communications staffer with SNC-Lavalin, said many of Dogwood’s assertions in the post were “erroneous” but did not elaborate.

The company is also part of a consortium bidding on the Pattullo Bridge in New Westminster, B.C., a project worth $1.37 billion.

Expanding the analysis to Alberta, the Star found that between 2005 to 2014, SCN-Lavalin and its subsidiaries — including SNC Transmission Ltd., SNC Transmission 11 Ltd., and SNC Transmission 111 Ltd. — donated a total of $54,504 to Alberta’s Progressive Conservative Party.

During that time, the company worked on the Western Alberta Transmission Line.

No investigations have been conducted to prove any connection between the donations and the contracts in either province.

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Ryan pointed to a compliance agreement SNC-Lavalin signed with Elections Canada after the company adopted new ethics and compliance measures, and another agreement the company signed with the federal government after being criminally charged in 2015 with fraud and bribery in relation to allegations the company paid $47.7 million to officials in Libya. The latter agreement allows SNC-Lavalin to continue to get government contracts because of the effort it has made to improve ethics and compliance, according to a Dec. 10, 2015 company press release.

The company has pleaded not guilty to the criminal charges. The allegations have not been proven in court. All allegations of wrongdoing by SNC-Lavalin occurred prior to 2013.

The BC Liberal Party and Alberta’s United Conservative Party did not respond to interview requests. The Star attempted to reach Morgan through Encana, the oil-and-gas company he founded, but did not receive a response.

Last week, Canada’s former attorney general and justice minister, Jody Wilson-Raybould, told a parliamentary committee that Prime Minister Justin Trudeau and others in his office had repeatedly pressured her to give SNC-Lavalin a deferred prosecution agreement rather than face a criminal trial on the fraud and bribery charges.

If found guilty, SNC-Lavalin could face a 10-year ban on bidding on federal government contracts. For its part, SNC-Lavalin says it is a changed company, has replaced board members and senior executives and put in place a “world-class ethics and compliance framework.” The company, which employs 8,700 people in Canada and nearly 35,000 worldwide, has warned that employees and pensioners could be put at risk without a deferred prosecution agreement.

Taxpayer-funded infrastructure projects make up a significant portion of SNC-Lavalin’s business: a Star analysis found that the company was awarded $68 million in new federal work in 2018, not including projects SNC-Lavalin is involved in as part of a consortium of companies. Examples of consortiums SNC is a part of include Ottawa’s new $2.1-billion light rail line and a $2.8-billion contract to upgrade Montreal’s regional transit system.

Transparency is a major subject of debate in B.C., which was once known as the “Wild West” of political donations because it had no limits on who could donate or how much.

The topic was an election issue in 2017. The BC Liberals, which had governed for 16 years, ultimately lost that election and were replaced by an NDP government supported by the Greens. The new government moved quickly to ban corporate and union donations and capped individual donations at $1,200.

Even though the donation rules have changed, Dogwood is still calling for a Charbonneau-style inquiry into B.C.’s anything-goes period.

The Quebec commission found a widespread system of companies bribing politicians to get government contracts. As a result of the inquiry, SNC-Lavalin agreed in a 2016 deal to reimburse Quebec municipalities for contracts obtained through questionable means.

The commission also sparked a 2013 Elections Quebec audit, which found that between 2006 and 2011 more than 500 companies used their employees and others to illegally funnel nearly $13 million in donations to political parties in the province. The audit did not examine the awarding of contracts but did find that the majority of the illegal donations came from employees of consulting engineering firms and construction companies.

A similar inquiry in B.C. would show whether the link between donations and government contracts is more than coincidence, said Sammartino.

Dogwood analyzed provincial road maintenance contracts and political donations between 2013 and 2016. The non-profit found companies that donated to the then-governing BC Liberals received a higher number of contracts and those contracts were higher in value: 90 non-donating companies received $539 million in contracts, while 44 donating companies received $758 million in contracts.

Dogwood’s analysis, which Sammartino shared with the Star, also found donations tended to be made around the same time the companies bid, received winning bids or started work on the contracts.

With files from Alex Boutilier, Alex Ballingall, Tonda MacCharles and Bruce Campion-Smith

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