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SNC-Lavalin has long been seen as one of Canada’s biggest corporate success stories. With SNC now over a century old, and billions in contracts spanning the globe, the Engineering and Construction giant is now among the world’s top five Global Design firms. Or at least it was until this fall.
Yesterday the company’s former CEO, Pierre Duhaime was arrested in Montreal by the “Hammer” anti-corruption squad. He’s charged with fraud, conspiracy to commit fraud and using forged documents, in relation to a new $1.3 billion “superhospital” project at McGill University. He was forced to resign last month after audits revealed $56 million in dodgy payments. Former VP, Ben Aissa who oversaw construction is also being sought, though he’s currently being detained in Switzerland on charges of international money-laundering.
The missing payments and laundered money, thought to be around $140 (Canadian) at this point, were used to “help secure contracts” with governments like the now-deposed regime of Moammar Gadhafi in Lybia. Since the revolution, SNC-Lavalin has come under international scrutiny for their involvement with the regime, going so far as to attempt to smuggle members of the Gadhafi family out of the country.
Before that, the company’s infamy came largely from their role as military contractors. Referred to as “Canada’s Halliburton“, they’ve been involved extensively in the Iraq and Afghan wars. For Iraq, they’ve built power plants, pipelines and manufactured between a third and half billion bullets for the US Military. In Afghanistan, they’re Canada’s largest private contractor.
A lot is being written about the company’s latest scandal(s), but few are drawing the obvious connections. Why did anybody expect that a corporation which saw nothing wrong with providing hundreds of millions of bullets for the Iraq occupation and paying who-knows-how-many millions in bribes to the Gadhafi regime would even blink at defrauding a public hospital in their own hometown? Amorality is amorality – we can hold out hope that our leaders are racist and nationalist enough not to treat us the same way they treat Libyans or Iraqis, but ultimately, if the price is right, they will.
Of course, this raises the question, once again, of how widespread corruption is within Canada’s ‘power elite’? How many more mayors, CEOs and bureaucrats will be drawn into these inquiries, and how many more will have to be sacrificed to satiate the public’s thirst for blood? How many will escape prosecution entirely? And even if every single one were captured, how long would it take for this level of corruption to set in again?
Power corrupts. Wherever the opportunity exists, so will the temptation to take “advantage” of them. That’s true of governments, corporations, religions, armies and schools. As long as we rely on small, secretive and self-interested cliques of individuals to run our society’s largest institutions, we’ll keep falling victim to those who take a little too much for themselves.
With proceedings underway at the Charbonneau Comission, the corruption inquiry into municipal construction contracts in Quebec, some very disturbing allegations are coming to light. This testimony depicts a vast and shady network of politicians, mobsters and city staff, which forced construction projects to pay unofficial “tax” rates of 1-3% in exchange for winning lucrative infrastructure contracts. While nothing’s been “proven” yet, and one has to be sceptical of pretty much everyone involved in this inquiry, this does fit perfectly into the city’s decades-long reputation as one of the most corrupt municipalities in Canada. As a response of the latest accusations, Mayor Tremblay has now suspended all new non-essential infrastructure contracts, putting $75 million in new construction on hold.
So far this scandal has helped dethrone Premier Charest, put Montreal’s Mayor Gerald Tremblay and Laval’s Mayor Gilles Vaillancourt into the spotlight and is now casting its gaze toward Stephen Harper. So far the mayors and others are denying that they did anything wrong and refusing to step down, but if these allegations continue, they may have no choice.
Every major Canadian city I’ve been to has a central public library sporting at least one shelf of books on historic municipal corruption in Montreal. This is not a new problem, and it’s hardly a secret. The question is, how deep does it go? How many other Canadian cities operate the same way, and to what extent? The Toronto Star has been focusing on Ontario’s organized crime lately, revealing allegations of extensive Mafia involvement in our own public and private sphere. Perhaps most telling are reports that Ontario has become something of a haven for Mafia figures fleeing Italian police.
The real problem, when it comes to corruption, is where one draws the line. As anyone familiar with the realpolitik of development and construction knows, there’s always an “old boys club”, and it usually does pretty well for itself. Even without brown bags of money changing hands, all of these people will tend to show up at the same parties and have countless social and professional connections – that’s the nature of elite social circles. There’s never really a “free market” when it comes to valuable and central civic properties or big infrastructure projects, and few would be possible without a collective effort from many different state, business and financial institutions. Power-brokers from government and business will inevitably come into contact with those from the “underworld”, but how many actively participate? What defines involvement, when an entire city’s bureaucracy might be touched by it in one way or another. And perhaps most importantly, what’s really the difference (morally, practically etc) between legal and illegal forms of collusion here?
Real organized crime (beyond the level of colour-coordinated street gangs) tends to be characterised by how similar it looks to other kinds of power. Modern Mafias operate much more like a government or business than a street gang. Instead of brute force, they utilise a complex network of mutually reinforcing enterprises (drugs, rackets, etc). They have an economy, an established leadership structure and complex apparatus of enforcement. These functional similarities allow mobs to integrate deeply into existing state and corporate power structures, and the more this process progresses, the harder it is to tell the two apart. This isn’t an “underworld” at all, if anything, it’s an integral part of the “overworld” we all know.
In neighbouring Laval, investigators are looking into what appears to be a very similar system of kickbacks and rigged bidding processes. Unlike Montreal, though, this “closed market” seems to have sprung more from long-term-incumbent municipal politicians than shadowy mobsters. The Mayor, Gilles Vaillancourt has been raided by police at home and City Hall, though so far denies any wrongdoing and refuses to step down. If corruption this sophisticated can develop independently of existing organized crime, what does that say about the institutions it afflicts?
There’s few places in a modern city where political or financial power are as concentrated and centralized as development and construction. With tens or hundreds of millions on the line in single projects, schemes like these are inevitable, and a few might even turn a profit and establish themselves. It’s hard to know how often this happens, but a safe bet that it wasn’t limited to a few cities in Quebec. Power corrupts, and as long as power over land, infrastructure and development is concentrated in a few hands, there will always be potential for corruption to take hold, however you want to define it. This corruption is a symptom of an already secretive and self-interested urban elite, and as long as we build and run our cities this way, corruption is a problem we’ll continue to face.
Revelations are exploding across the nation this weekend that Stephen Harper’s last electoral win may have included a few dirty tricks. Liberal leader Bob Rae among others are now accusing conservative campaigns in the last election of illegally using “robocalls” (automated dialers) to spread misinformation about polling stations and opposition parties. Elections Canada and the RCMP are now investigating.
So far the investigation has traced some of these calls to an Albertan telemarketing firm associated with several Tory campaigns. The allegations involve impersonating Liberal Party members and sending people to the wrong polling stations. Since much of this occurred in ridings where the Conservatives “won” by a few dozen or hundred votes, this casts significant doubt on the legitimacy of their recent win – or in layman’s terms “they cheated“.
What happens when you cheat in an election and win? Not a whole lot. We witnessed this locally when former Mayor Larry DiIanni was convicted of violating new campaign financing laws. It took years of pressure and tens of thousands in legal fees to even convince Council to press charges, even though his violations were apparent within days of winning the election. In the end he had to repay the excess (without interest) and write a letter of apology. Never was the legitimacy of his reign openly questioned, nor the role of local business/development leaders who’d donated (and re-donated, then donated again…) the illicit contributions in question. To this day, DiIanni still portrays the issue as one of a personal vendetta rather than blatant corruption, but that’s done little to stop him from losing two elections since.
Such allegations also stalked George W. Bush through both of his elections – focusing on Florida in 2000 and Ohio in 2004.. Though little was ever proven, reports abound about taking black voters off the electoral roles en-masse, and technical interference from Diebold, big republican donors who also manufacture much of America’s voting machines.
Obviously, this isn’t an isolated problem.
Did the actions of Conservative campaigners affect the outcome nationally? Harper narrowly gained a majority in last year’s election with eleven ridings more than he needed, and his party is now facing allegations in twenty-seven. Even if less than half of these ‘robocall ridings’ led to a victory, it could still have prevented a Liberal/NDP coalition. We’ll never really know for sure, but does it matter? What do these actions say about how our “leaders” see the Canadian public?
Would you bet on a race which you know is fixed? Would you even bother watching a game if you knew the winner ahead of time? How much confidence would you have in future matches if foul play were continually being unearthed after the fact?
These embarrassments show clearly the true purpose of voting. The point is not to determine who the public want as their “representatives” – it’s to present a picture which looks that way. Elections differ responsibility from those in power onto the public for “voting them in” (even when we didn’t) and paint all criticism as an attack on the Canadian people. Whether or not those who “win” truly “represent” the public is beside the point, and trying to enforce the “public will” against even the most corrupt officials would set a horrible precedent. Elections serve to convey the illusion of democracy and legitimacy through regular collective rituals, and for that purpose appearances are all that matter.
If election fraud didn’t change anything it would probably actually be illegal.
I, like many activists, am fairly critical of the notion that new technologies are about to arrive which will diffuse the ticking time bombs that are peak oil and climate change. But there’s a much bigger mythical solution which needs even more scorn and contempt: government. Too many activists, academics and pundits have become addicted to seeing government policy as a magic wand which can be used to solve any and all problems. It won’t, and it can’t. A much better analogy would be a magic ring, like something Tolkein would write, which has an evil and devious mind of it’s own.
It’s 2010. Bush is gone. The science on climate change is stronger than ever and runaway oil prices already have wrecked the world economy. Everyone from Al Gore to Alan Greenspan is admitting that we have a very serious problem. And yet the “solutions” we are being offered have not changed. Bigger highways, fossil fuels and a strong auto industry. These policies overshadow in every way any “progress” made in North America towards sustainable government policies.
I’ve already written recently several times about Obama’s bailout extravaganza for the auto industry. But the situation is becoming pretty clear at all levels. Deutsche Bank recently snubbed the US over its failure to pass effective climate change legislation and pledged to focus its $6-7 billion climate investing portfolio on Western Europe and China instead. And locally, though he did pledge billions in his most recent tax break for big corportions to build new rail lines, it was not only overshadowed by a much larger increase in highways, but also isn’t going to come close to meeting the growing maintenance backlog for America’s transit system – now $77.7 billion. This case is especially telling, since people are actually flocking to public transit in droves, passenger miles went from 39.8 billion in 1995 to 55.2 billion in 2008. Unfortunately, without extra funding, this success is putting a huge added strain on transit networks.
Locally, politicians continue to drag their feet. In the name of “giving more stalls to local farmers”, the newly redeveloped Hamilton Farmers Market will have 26 less stalls than it did before. The stadium debate still rages around the merits of a highway-side location, and now threatens to tear up the Aberdeen rail yard on the recommendation of city staff. Now that’s planning for a low-oil future.
The $100 million budget for the Pan-Am games would be really handy at dealing with these problems. It’s a damn shame we’ll never be able to direct that money as it should be spent. But what’s even more unfortunate is that this money is only a drop in the bucket of the billions we hand over annually to deal with these issues, for which we get less and less (school, health care etc) back. The very nature of governments prohibits them from solving these problems because it places them in bed with the corporations which cause it. Canadians can understand this – the entire history of our colonization is one where big, resource-hungry corporations like the Hudson Bay Company ran the land.
The first step in taking effective action is to realise that the government is not going to do it for us.