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UPDATED: SNC Lavalin – Just the Facts Ma’am

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10 minute read

Opinion by Cory Litzenberger

Let’s take emotion out of it. Let’s take a look at the legislation. While I am not a lawyer, I do interpret tax legislation for a living, and so I decided to take a closer look at the criminal legislation pertaining to the SNC-Lavalin scandal.

The relevant legislation is in 《parentheses》below, but here is the Coles notes:

FACT – in 2015 SNC was charged by the RCMP under Section 3 of the Corruption of Foreign Public Officials Act

《3 (1) Every person commits an offence who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official

(a) as consideration for an act or omission by the official in connection with the performance of the official’s duties or functions; or

(b) to induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions.》

FACT – In 2015, the RCMP charged SNC-Lavalin, along with its international division, with corruption and fraud in relation with their business dealings in Libya. The RCMP said officials at the company attempted to bribe several public officials in the country, including dictator Moammar Gadhafi, as well as other businesses in Libya.

FACT – The prosecutor is allowed to enter into a remediation agreement under Section 715.32 of the Criminal Code of Canada , if ALL conditions are met under 715.32(1).

《715.32 (1) The prosecutor may enter into negotiations for a remediation agreement with an organization alleged to have committed an offence if the following conditions are met:

(a) the prosecutor is of the opinion that there is a reasonable prospect of conviction with respect to the offence;

(b) the prosecutor is of the opinion that the act or omission that forms the basis of the offence did not cause and was not likely to have caused serious bodily harm or death, or injury to national defence or national security, and was not committed for the benefit of, at the direction of, or in association with, a criminal organization or terrorist group;

(c) the prosecutor is of the opinion that negotiating the agreement is in the public interest and appropriate in the circumstances; and

(d) the Attorney General has consented to the negotiation of the agreement.》

FACT – for the prosecutor to evaluate their public interest opinion, they must consider subsection 715.32(2) in its entirety which includes many relevant pieces of information except when 715.32(3) overrides it

《 Factors to consider

715.32(2) For the purposes of paragraph (1)(c), the prosecutor must consider the following factors:

[(a) to (h)]; and

(i) any other factor that the prosecutor considers relevant.》

FACT – 715.32(3) says even with all those factors to consider, you can NOT factor in the national economic interest (ie: the jobs argument) if they were charged the way the RCMP charged them

《Factors not to consider

715.32(3) Despite paragraph (2)(i), if the organization is alleged to have committed an offence under section 3 or 4 of the Corruption of Foreign Public Officials Act, the prosecutor must not consider the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved.》

CONCLUSION – the jobs argument is irrelevant under the law in these circumstances – The prosecution knows this – The former Attorney General knows this – and based on the provisions as written, the jobs argument for SNC does not meet the legal requirement for a remediation agreement.

For these reasons, I find in favour of the former Attorney General.
— — — —

Update: While being interviewed on the afternoon of March 7, 2019, I looked even closer at the legislation and caught something I didn’t realize on first glance when reading it.

Notice at the end of 715.32(1)(c) the word “and”.

While I said this means that all of the tests in (a) through (d) must be met, I neglected to say that this means no one person has the sole final decision. The prosecutor is mentioned in (a), (b), and (c); while the Attorney General is only mentioned in (d).

To put another way, this law is written so that it is not solely the decision of the Attorney General, nor the prosecutor. Rather, it requires both the Attorney General and the Prosecutor to agree to proceed with negotiations.

Similar to a scene in the movies where you see nuclear codes kept between two different military heads before proceeding with the launch, such is the wording of this provision.

This means that the Attorney General does not have the final decision and so any suggestion that she does is incorrect. The decision is a joint one with most of the leg work having to be done by the prosecutor, not the Attorney General.

So let me recap: I think it is quite simple, that a Remediation Agreement (aka Deferred Prosecution Agreement) cannot be considered under the “national economic interest” (jobs) argument based on what legislation the RCMP used for the charges.

If that’s the argument, then the answer is “no” and the repeated number of times asking for the former Attorney General to revisit it over a four month period for something that appears so black and white might be considered workplace harassment if I were to do such a thing to one of my colleagues.

So, since the economic argument is moot, what other argument is there?

We heard in testimony that the parties may have wanted the Attorney General to look at it from a stance that does not imply economic interest.

Ironically, “we need to win an election” may actually be legal as “any other factor that the prosecutor considers relevant” but then we would have to assume the prosecutor would have to be partisan, and that is highly not likely in my experience.

So we now know that there must be an agreement between the prosecutor and the Attorney General.

We also know that “economic interest” cannot be the reason under the law.

So, if the law is that clear on economic interest, why would the Attorney General be asked repeatedly for reconsideration, unless it was not “economic interest” they wanted her to consider?

For these additional reasons, I still find in favour of the former Attorney General

Update #2: On March 8, 2019, the Federal Court of Canada ruled in favour of the Public Prosecution Service on SNC Lavalin’s request for judicial review citing:

“The law is clear that prosecutorial discretion is not subject to judicial review, except for abuse of process.” – Federal Court of Canada Justice Kane

Then, on March 11, 2019, the Organisation for Economic Co-operation and Development (OECD) came to the same conclusion as my interpretation of the law regarding the intention of the 1999 agreement, and said:

“political factors such as a country’s national economic interest and the identity of the alleged perpetrators must not influence foreign bribery investigations and prosecutions.” – OECD

We now have confirmation that there is no legal way that a country’s national economic interest can be considered under the law.

For these additional reasons, jurisprudence about the authority of the Public Prosecution Service, and third party reports about the intentions of the 1999 agreement from the OECD, I still find in favour of the former Attorney General for a third time.

Click to listen to Red Deer Accountant Cory Litzenberger on Charles Adler Tonight

Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

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Crime

The Left Thinks Drug Criminalization Is Racist. Minorities Disagree

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[This article was originally published in City Journal, a public policy magazine and website published by the Manhattan Institute for Policy Research]

By Adam Zivo

A Canadian poll finds that racial minorities don’t believe drug enforcement is bigoted.

Is drug prohibition racist? Many left-wing institutions seem to think so. But their argument is historically illiterate—and it contradicts recent polling data, too, which show that minorities overwhelmingly reject that view.

Policies and laws are tools to establish order. Like any tool, they can be abused. The first drug laws in North America, dating back to the late nineteenth and early twentieth centuries, arguably fixated on opium as a legal pretext to harass Asian immigrants, for example. But no reasonable person would argue that laws against home invasion, murder, or theft are “racist” because they have been misapplied in past cases. Absent supporting evidence, leaping from “this tool is sometimes used in racist ways” to “this tool is essentially racist” is kindergarten-level reasoning.

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Yet this is precisely what institutions and activist groups throughout the Western world have done. The Drug Policy Alliance, a U.S.-based organization, suggests that drug prohibition is rooted in “racism and fear.” Harm Reduction International, a British NGO, argues for legalization on the grounds that drug prohibition entrenches “racialized hierarchies, which were established under colonial control and continue to dominate today.” In Canada, where I live, the top public health official in British Columbia, our most drug-permissive province, released a pro-legalization report last summer claiming that prohibition is “based on a history of racism, white supremacy, paternalism, colonialism, classism and human rights violations.”

These claims ignore how drug prohibition has been and remains popular in many non-European societies. Sharia law has banned the use of mind-altering substances since the seventh century. When Indigenous leaders negotiated treaties with Canadian colonists in the late 1800s, they asked for  “the exclusion of fire water (whiskey)” from their communities. That same century, China’s Qing Empire banned opium amid a national addiction crisis. “Opium is a poison, undermining our good customs and morality,” the Daoguang emperor wrote in an 1810 edict.

Today, Asian and Muslim jurisdictions impose much stiffer penalties on drug offenders than do Western nations. In countries like China, Saudi Arabia, Iran, Singapore, and Thailand, addicts and traffickers are given lengthy prison sentences or executed. Meantime, in Canada and the United States, de facto decriminalization has left urban cores littered with syringes and shrouded in clouds of meth.

The anti-drug backlash building in North America appears to be spearheaded by racial minorities. When Chesa Boudin, San Francisco’s former district attorney, was recalled in 2022, support for his ouster was highest among Asian voters. Last fall, 73 percent of Latinos backed California’s Proposition 36, which heightened penalties for drug crimes, while only 58 percent of white respondents did.

In Canada, the first signs of a parallel trend emerged during Vancouver’s 2022 municipal election, where an apparent surge in Chinese Canadian support helped install a slate of pro-police candidates. Then, in British Columbia’s provincial election last autumn, nonwhite voters strongly preferred the BC Conservatives, who campaigned on stricter drug laws. And in last month’s federal election, within both Vancouver and Toronto’s metropolitan areas, tough-on-crime conservatives received considerable support from South Asian communities.

These are all strong indicators that racial minorities do not, in fact, universally favor drug legalization. But their small population share means there is relatively little polling data to measure their preferences. Since only 7.6 percent of Americans are Asian, for example, a poll of 1,000 randomly selected people will yield an average of only 76 Asian respondents—too small a sample from which to draw meaningful conclusions. You can overcome this barrier by commissioning very large polls, but that’s expensive.

Nonetheless, last autumn, the Centre for Responsible Drug Policy (a nonprofit I founded and operate) did just that. In partnership with the Macdonald-Laurier Institute, we contracted Mainstreet Research to ask over 12,000 British Columbians: “Do you agree or disagree that criminalizing drugs is racist?”

The results undermine progressives’ assumptions. Only 26 percent of nonwhite respondents agreed (either strongly or weakly) that drug criminalization is racist, while over twice as many (56 percent) disagreed. The share of nonwhite respondents who strongly disagreed was three times larger than the share that strongly agreed (43.2 percent versus 14.3 percent). These results are fairly conclusive for this jurisdiction, given the poll’s sample size of 2,233 nonwhite respondents and a margin of error of 2 percent.

Notably, Indigenous respondents seemed to be the most anti-drug ethnic group: only 20 percent agreed (weakly or strongly) with the “criminalization is racist” narrative, while 61 percent disagreed. Once again, those who disagreed were much more vehement than those who agreed. With a sample size of 399 respondents, the margin of error here (5 percent) is too small to confound these dramatic results.

We saw similar outcomes for other minority groups, such as South Asians, Southeast Asians, Latinos, and blacks. While Middle Eastern respondents also seemed to follow this trend, the poll included too few of them to draw definitive conclusions. Only East Asians were divided on the issue, though a clear majority still disagreed that criminalization is racist.

As this poll was limited to British Columbian respondents, our findings cannot necessarily be assumed to hold throughout Canada and the United States. But since the province is arguably the most drug-permissive jurisdiction within the two countries, these results could represent the ceiling of pro-drug, anti-criminalization attitudes among minority communities.

Legalization proponents and their progressive allies take pride in being “anti-racist.” Our polling, however, suggests that they are not listening to the communities they profess to care about.

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Business

Dallas mayor invites NYers to first ‘sanctuary city from socialism’

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From The Center Square

By

After the self-described socialist Zohran Mamdani won the Democratic primary for mayor in New York, Dallas Mayor Eric Johnson invited New Yorkers and others to move to Dallas.

Mamdani has vowed to implement a wide range of tax increases on corporations and property and to “shift the tax burden” to “richer and whiter neighborhoods.”

New York businesses and individuals have already been relocating to states like Texas, which has no corporate or personal income taxes.

Johnson, a Black mayor and former Democrat, switched parties to become a Republican in 2023 after opposing a city council tax hike, The Center Square reported.

“Dear Concerned New York City Resident or Business Owner: Don’t panic,” Johnson said. “Just move to Dallas, where we strongly support our police, value our partners in the business community, embrace free markets, shun excessive regulation, and protect the American Dream!”

Fortune 500 companies and others in recent years continue to relocate their headquarters to Dallas; it’s also home to the new Texas Stock Exchange (TXSE). The TXSE will provide an alternative to the New York Stock Exchange and Nasdaq and there are already more finance professionals in Texas than in New York, TXSE Group Inc. founder and CEO James Lee argues.

From 2020-2023, the Dallas-Fort Worth-Arlington MSA reported the greatest percentage of growth in the country of 34%, The Center Square reported.

Johnson on Thursday continued his invitation to New Yorkers and others living in “socialist” sanctuary cities, saying on social media, “If your city is (or is about to be) a sanctuary for criminals, mayhem, job-killing regulations, and failed socialist experiments, I have a modest invitation for you: MOVE TO DALLAS. You can call us the nation’s first official ‘Sanctuary City from Socialism.’”

“We value free enterprise, law and order, and our first responders. Common sense and the American Dream still reside here. We have all your big-city comforts and conveniences without the suffocating vice grip of government bureaucrats.”

As many Democratic-led cities joined a movement to defund their police departments, Johnson prioritized police funding and supporting law and order.

“Back in the 1800s, people moving to Texas for greater opportunities would etch ‘GTT’ for ‘Gone to Texas’ on their doors moving to the Mexican colony of Tejas,” Johnson continued, referring to Americans who moved to the Mexican colony of Tejas to acquire land grants from the Mexican government.

“If you’re a New Yorker heading to Dallas, maybe try ‘GTD’ to let fellow lovers of law and order know where you’ve gone,” Johnson said.

Modern-day GTT movers, including a large number of New Yorkers, cite high personal income taxes, high property taxes, high costs of living, high crime, and other factors as their reasons for leaving their states and moving to Texas, according to multiple reports over the last few years.

In response to Johnson’s invitation, Gov. Greg Abbott said, “Dallas is the first self-declared “Sanctuary City from Socialism. The State of Texas will provide whatever support is needed to fulfill that mission.”

The governor has already been doing this by signing pro-business bills into law and awarding Texas Enterprise Grants to businesses that relocate or expand operations in Texas, many of which are doing so in the Dallas area.

“Texas truly is the Best State for Business and stands as a model for the nation,” Abbott said. “Freedom is a magnet, and Texas offers entrepreneurs and hardworking Texans the freedom to succeed. When choosing where to relocate or expand their businesses, more innovative industry leaders recognize the competitive advantages found only in Texas. The nation’s leading CEOs continually cite our pro-growth economic policies – with no corporate income tax and no personal income tax – along with our young, skilled, diverse, and growing workforce, easy access to global markets, robust infrastructure, and predictable business-friendly regulations.”

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