In Defense of Bribery at SNC-Lavalin

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Lee Friday – April 8, 2019

In an election year, Canadian Prime Minister Justin Trudeau is suddenly neck deep in a corruption scandal that could cost him his job. The scandal stems from “ongoing fraud and corruption charges” against SNC-Lavalin (SNC), a large international engineering and construction firm based in Montreal. The charges are “linked to alleged dealings with the Moammar Gadhafi regime in Libya between 2001 and 2011.”

Jody Wilson-Raybould claims that while she was Minister of Justice and Attorney General of Canada, she was subjected to “an intense pressure campaign [from the Prime Minister’s Office] to persuade her to override a decision to deny SNC-Lavalin a remediation agreement, which would allow the engineering giant to avoid criminal proceedings on corruption and fraud charges.” Trudeau denies this, but the scandal persists.

Bribery is at the heart of the charges facing SNC, which raises three questions. First, why are Canadian authorities getting involved in events which took place in a foreign country? Second, is bribery really a bad thing, and if it is bad, who is to blame, the briber or the bribee? Third, what is the difference between legal bribery and illegal bribery?

Jurisdiction

The charges were laid by Canadian federal police, which said “officials at the company [SNC] attempted to bribe several public officials in the country, including dictator Moammar Gadhafi, as well as other businesses in Libya.” If convicted, “the company will be banned from receiving any federal government business for a decade, never mind the massive fines, the criminal conviction and other lost business.”

When did Canadian authorities acquire jurisdiction over actions in a foreign country? Good question. Beginning in the 1990s, “Canada assumed obligations under international law to criminalize foreign bribery by becoming a party to the Organisation for Economic Cooperation and Development’s … Anti-Bribery Convention, as well as the Organization for American States’s Inter-American Convention Against Corruption and the United Nations Convention Against Corruption.” (more on this below)

Bribers or Bribees, an Important Distinction

Bribery should be considered wrong only when individuals violate their terms of employment, in which case the culprit is the bribee, not the briber. Murray Rothbard explains:

“Suppose that Black wants to sell materials to the XYZ Company. In order to gain the sale, he pays a bribe to Green, the purchasing agent of the company. … all he has done is to lower the price charged to the XYZ Company by paying a rebate to Green. From Black’s point of view, he would have been just as happy to charge a lower price directly, though presumably he did not do so because the XYZ executives would still not have purchased the materials from him. But the inner workings of the XYZ Company should scarcely be Black’s responsibility. As far as he is concerned, he simply lowered his price to the company, and thereby gained the contract.”

“The illicit action here is, instead, solely the behavior of Green, the taker of the bribe. For Green’s employment contract with his employers implicitly requires him to purchase materials to the best of his ability in the interests of his company. Instead, he violated his contract with the XYZ Company by not performing as their proper agent: for because of the bribe he either bought from a firm which he would not have dealt with otherwise, or he paid a higher price than he need have by the amount of his rebate. In either case, Green violated his contract and invaded the property rights of his employers.”

“In the case of bribes, therefore, there is nothing illegitimate about the briber, but there is much that is illegitimate about the bribee, the taker of the bribe. … It is only the taker of a bribe who should be prosecuted. In contrast, left-liberals tend to hold the bribe-giver as somehow more reprehensible, as in some way “corrupting” the taker. In that way they deny the free will and the responsibility of each individual for his own actions.”

As Lew Rockwell wrote:

“Whatever may be wrong with bribery should be handled, not by special statutes and not by global anti-bribery laws, but through the law of contract. If an employee takes a job on the condition that he not accept payola, he should not do so. Neither should he miss a day’s work to visit his girlfriend. But to hold the briber responsible is like holding the girlfriend accountable for her beau’s lack of self-discipline. The wrong party is being punished.”

SNC, as the “briber”, has done nothing wrong. Bribes are a daily fact of life in countries where oppressive governments arbitrarily establish numerous obstacles to economic activity. In a recent article for the CBC, Neil Macdonald wrote “I should probably stand in the same courtroom dock as SNC-Lavalin.” Why? Because, over the years, as a reporter in the Middle East (including Libya), he says he bribed “Lots of foreign officials.” Macdonald makes it clear that without bribery, he could not have done his job. As Rockwell wrote, “Bribes will be abolished when artificial barriers to doing business are abolished.”

Entrepreneurs deserve credit for bribing public officials because this enables them to undertake activities which generate prosperity for themselves, the workers they hire, and consumers.

Legal Bribery Versus Illegal Bribery

Why do governments in numerous countries insist on prosecuting acts of bribery in other countries? I propose a theory. Let’s ignore the various justifications from the authorities, and focus on the beginning of the preamble of the Inter-American Convention Against Corruption: “The Member States of the Organization of American States, Convinced that corruption undermines the legitimacy of public institutions …”

There you have it. Its all about the appearance of legitimacy of government institutions. Simply put, the activities of politicians and bureaucrats are considered to be legitimate as long as they comply with various laws, rules, and regulations which they themselves create. Thus, politicians say the act of bribing a public official, foreign or domestic, is illegal, according to the laws made by them.

Which brings us to . . .  

The definition of bribery from wikipedia: Bribery is the act of giving or receiving something of value in exchange for some kind of influence or action in return, that the recipient would otherwise not offer.

Words have meanings, and definitions don’t lie. Bribery is synonymous with lobbying and political campaign contributions, both of which are made legal by, and work to the benefit of, the politicians who make the laws.

Lobbying and Political Campaign Contributions

Analysis by the Sunlight Foundation revealed the following:

“Between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 billion on federal lobbying and campaign contributions. A year-long analysis by the Sunlight Foundation suggests, however, that what they gave pales compared to what those same corporations got: $4.4 trillion in federal business and support.”

“After examining 14 million records, including data on campaign contributions, lobbying expenditures, federal budget allocations and spending, we found that, on average, for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government.”

No amount of political obfuscation can change the nature of these activities. This is bribery, in the purest sense of the word, and politicians are the bribees!

Part and parcel of this is the regulatory apparatus of government (of similar magnitude in Canada as in the U.S. on a per capita basis) which supposedly exists to protect the safety and welfare of consumers from unscrupulous corporations, but somehow manages to affect a massive transfer of wealth from workers and consumers to politically influential corporations. Thus, the 1% gains at the expense of the 99%, thanks to the politicians, the bribees.

Conclusion

Politicians benefit from legal bribes which cause tremendous harm to the economic welfare of the general public, while condemning illegal bribes which are far less harmful to the general public. With their legal stamp of approval for lobbying, campaign contributions, and their regulatory apparatus, politicians cast an aura of legitimacy over these activities. Prosecution of foreign acts of bribery is a logical extension of this warped ideology. This allows politicians to claim they are advocates of legitimate government operations on a global scale, and they shamelessly present themselves as champions of the rule of law, their law. That is the real scandal. Justin Trudeau’s alleged interference in the justice system pales in comparison.

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