Sunday, May 13, 2012

Not in Haiti, but in Canada: Tales of Corruption, Waste and Deception

Canada's SNC-Lavalin is one large example of hypocrisy

by Roger Annis (Haiti Liberte)


A common refrain says that Haiti is a land of persistent and debilitating governmental corruption that prevents any meaningful human development from taking place. This is repeated ad nauseum by vested interests who gain from disinformation about the true cause of Haiti's underdevelopment. Even sincere people fall prey to what is the surface appearance of a deeper issue.

It is true that corruption in government and economic life is a serious problem for Haiti. But stating this alone doesn't explain much or solve anything. If Haiti has not developed stable and effective government, it is primarily because its democracy is persistently subverted from abroad.

What's more, "corruption" in Haiti is small scale compared to corruption in the countries that lecture Haiti on the subject. One such country, Canada, it is presently awash in cases of corruption and government waste and deception. One can fairly ask if a large part of Haiti's notorious "corruption" is, in fact, imported from abroad.

Canada's engineering darling

The mainstream press in Canada is reporting on the sorry spectacle [1] that has befallen SNC-Lavalin, described by the Globe and Mail as "a respected Canadian company and one of the world's largest engineering firms." The firm employs 28,000 people. As things happen, it is the company that oversaw the construction of Canada's new embassy in Haiti, completed in 2004.

Following the 2010 earthquake, there was great hope by big international engineering and construction firms such as SNC that the "disaster capitalism" that would guide "reconstruction" in Haiti could earn lots of profits for them. But as visitors to the earthquake zone are only too aware, there is nary a construction crane in sight. The world's "largest engineering firms" apparently have little time or interest in assisting Haiti with large-scale housing projects and a host of other, pressing humanitarian needs.

SNC-Lavalin's absence from Haiti is unlikely to change in the short term. The company is being shaken to its core by a large corruption scandal. Leading executives have resigned, been arrested, or are facing criminal charges. The company's stock price has dropped by some 40%. There are reports that only a takeover can rescue the company.

In February, the head of SNC's construction division resigned amidst revelations that $56 million in expenditures he had approved to secure contracts in North Africa had disappeared. Riadh Ben Aissa has now been arrested by Swiss authorities for alleged corruption, fraud and money laundering.

A former company vice-president, Stephane Roy, was supposed to act as an overseer for the large amounts of money that Mr. Ben Aissa was authorized to spend. But he is also involved in the allegations of disappeared funds. He also resigned in February.

CBC News reported one week ago [2] that at least one whistleblower at SNC informed the board of directors months ago that for years, hundreds of millions of dollars of payments were funneled by company executives with little scrutiny to shell companies in Libya in order to secure contracts from the government there.

SNC had a long association with the regime of Muammar Gadaffi, including the construction [3] of Libya’s largest prison.

SNC's interim CEO, Ian Bourne, expects more fraudulent transactions will show up during investigations. And in theory, criminal charges could be laid in Canada. The Corruption of Foreign Public Officials Act dating from 1999 makes it illegal to pay bribes to foreign governments or agencies.

From the "Code of Ethics " page of the SNC-Lavalin website: "The company's integrity and reputation for ethical practices are among its most valued assets and are essential elements in its continued quest for sustained profitability."

Members of the board of directors of SNC-Lavalin are a who's who among Canada's business elite, including Gwyn Morgan (Enbridge Inc), Senator Hugh Segal (former chief of staff of Prime Minister Brian Mulroney), Pierre Lessard (Metro Inc), Claude Mongeau (CN Rail) and billionaire investor Stephen Jarislowsky. The latter is the company's largest shareholder with 14% of its stock.

Quebec government reeling

SNC-Lavalin is headquartered in Montreal and enjoys an especially close relationship to the government of Quebec. That government and its ruling Liberal Party are presently reeling from revelations of their close ties to the criminal underworld that runs much of the construction industry in the province. The Globe and Mail explained on Apr. 20: "Allegations of corruption in major construction projects have tainted all levels of government from smaller municipalities to bigger cities, spreading to the Quebec government and federal officials."

The government has been obliged to establish a formal inquiry into the matter, headed by Quebec Superior Court Justice France Charbonneau. It is supposed to begin public hearings this fall and report by 2013. Meanwhile, the special "anti-corruption" squad of police forces in the province is conducting no less than 16 separate investigations of its own.

As if the Charbonneau commission's task was not already complicated enough, it must also deal with the stonewalling of Canada's federal police force, the Royal Canadian Mounted Police. The force is refusing to release to the commission the results of years of investigations it has conducted on criminal practices in the construction industry, including relations with the Quebec Mafia and other criminal organizations.

Canada's federal police force: Model trainers for Haitian counterparts?

The RCMP has been present in Haiti for more than 20 years on various missions on behalf of the Canadian government in the name of training Haitian police in the methods of good policing. But back at home, the force's credibility among Canadians is at an historic low. What credentials does the RCMP bring to Haiti?

It took the arrest of Riadh Ben Aissa by Swiss authorities more than one week ago to give new legs to the investigation of SNC. That's because the RCMP is notorious in the developed capitalist world for its poor record in investigating and prosecuting cases of corporate larceny or corruption. (Switzerland's involvement stems from the large number of charities registered in Switzerland by Libya’s Gadaffi family.)

The RCMP's credibility has for years been rocked by controversy over the deaths of unarmed citizens at the hands of its officers, including the most notorious case, that of Polish visitor to Canada, Robert Dziekanski, at the Vancouver airport in 2007. Still, the killings continue.

Now a new scandal has broken. Dozens of former female RCMP officers have launched a class action lawsuit [4] over the sexual violence they suffered at the hands of their fellow officers or bosses.

How low have RCMP fortunes sunk? Last year, at the time of his appointment as the new commissioner (top dog) of the RCMP, Bob Paulsen told CBC News that the "changes" he proposes for the force are the RCMP’s "last chance" to save itself as an institution.

Police crimes in Canada are not limited to the national force. The Toronto Star, Canada's largest daily newspaper, has just completed two special series on policing across the country. One has been nominated for a national journalism award and is titled "Known to Police." It looks at the practice of police compiling dossiers on hundreds of thousands of Canadians who have encountered police in routine checks but committed no illegal acts.

The other series is titled "Police Who Lie" and it examines more than 100 cases of police officers who lied to judges and courts while under oath.

In addition to the RCMP, Quebec's provincial police force and many municipal forces in the province are part of the Canadian police mission in Haiti. Quebec police have been conducting exceptionally violent attacks on the mass, student strike and protest movement that has shaken the province over the past three months.

Waste and deception, associated with imperialist warmaking

The credibility of Canada's national government is being seriously challenged by fallout from two close cousins of corruption-waste and deception. It's no accident that these are closely bound up to Canada's military industries.

The government has been lying to the Canadian people over its untendered and unilateral decision to purchase new F35 fighter jets from the U.S. military merchant Lockheed Martin. It said the planes would cost some $15 billion, including operational costs over their life span. Turns out the real figure is twice that amount.

The government is dealing with embarrassing cost numbers on a fleet of four used submarines that a predecessor government purchased from Great Britain in 1998 for $750 million. The ships were so badly designed that they have never been used. Since their purchase, they have consumed more than their purchase price in repair work.

The costs of Canada's increasing war posture in the world are staggering. From 2005 to 2011, military expenditures have risen by 54%, to more than $23 billion for 2011. Several tens of billions are earmarked for a new fighter jet and even more will be spent on a new warship program announced at the beginning of this year. Billions more spending in new equipment for Canada's army is well underway.

In all of these projected military expenditures, serious spending overruns are just part of the game.

Corruption among the overseers

Canada is not the only player in Haiti to be enmeshed in corruption scandals. The U.S. company Wal-Mart, one of the world's largest corporations, suffered a drop in its stock price earlier this month
following publication in the Apr. 22 New York Times [5] of a book length study of how the company paid tens of millions of dollars in bribes in Mexico in and around the year 2005 in order to win speedy approval of expansion plans in the country.

Especially damaging was the Times' discovery that company higher-ups tried to hush up the reports of bribes and prevent further investigation. Wal-Mart puts great stock in its claims to operate on the highest ethical principles (notwithstanding its notorious hostility to the right of its workers to join a union).

Meanwhile, the U.S. government and media are being drawn inexorably into the scandal surrounding the conduct of international media mogul Rupert Murdoch. He holds 27 media licenses in the United States, including the venerable Wall Street Journal. Some senators and congressmen want to know if Murdoch's outlets enjoyed the same cozy relationship with political leaders and committed the same criminal violations of privacy laws in the U.S. as it did in Britain.

In Brazil, the takeover of poor neighbourhoods in Rio Di Janeiro by the police and army in anticipation of several large international extravaganzas to take place in the city has led to accusations by local residents [6] that police are taking bribes from the very drug dealers they were supposed to displace.

Corruption, lies, waste – it's all endemic to capitalism, and the rot starts at the top. Haiti's people are no more and no less the victims of these social illnesses than others. They are as capable of tackling them as any other people. Their right to do so should be respected.

Corruption in Haiti? Whose influences and whose practices lie at the root of the problem? Haitians shouldn't have to suffer the hypocrisy of accusers bearing false credentials.

Roger Annis is a coordinator of the Canada Haiti Action Network (CHAN) and its Vancouver affiliate, Haiti Solidarity BC. This article was originally published on rabble.ca.

Notes


[1] http://www.theglobeandmail.com/news/politics/former-head-of-snc-construction-arrested-in-switzerland/article2417489/
[2] http://www.cbc.ca/news/canada/story/2012/05/01/snc-lavalin-executive-gadhafi-email.html
[3] http://www.theglobeandmail.com/globe-investor/snc-lavalin-defends-libyan-prison-project/article1919872/
[4] http://www.cbc.ca/news/canada/british-columbia/story/2012/03/27/bc-rcmp-harassment-lawsuit.html
[5] http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?_r=1&ref=global
[6] http://www.canadahaitiaction.ca/content/rio-de-janeiro-slums-drug-lords-gone-police-now-create-fear

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