SNC Lavalin Prosecution Founders on Lack of Admissible Evidence—No Tipping Allowed
(Co-Chair, Fraud Law Group, McMillan LLP)
In R. v. Wallace, 2017 ONSC 0132 the Applicants were charged with a single offence under the Corruption of Foreign Public Officials Act. They applied to the court to challenge wire tape warrants prior to trial, and won. As a result, the case against them collapsed. Just before they entered their pleas, the federal Crown attorney advised the court that she would not be calling any evidence against the Applicants, and she asked that the judge acquit these accused. Without the wiretap evidence, the Crown no longer had a reasonable prospect of conviction. The case serves as an important lesson to investigators who are bound by the Charter. Instead of doing the proper investigative groundwork and use a search warrant and wire tap as a last resort, the RCMP took the flimsiest of evidence as a basis for using the judicial “nuclear weapon” of a wiretap to discover if there was any case at all---- and in the result let the accused walk free such that we’ll never know if they were truly guilty or not---- an unsatisfactory ending for the accused, the prosecution, and Canadians as a whole.
The matter involved the awarding of a $50 million construction supervision contract (“CSC”) related to the planned construction of the Padma Bridge in Bangladesh by the Government of Bangladesh. The World Bank was a primary lender in relation to the Padma Bridge project. Five companies were short-listed for the CSC aspect of the Padma Bridge Project: AECOM, HPR, Halcrow, Oriental and SNC Lavalin. The decision to award the CSC proceeded in stages. First, consideration was given to the technical qualifications of the bidders. That consideration led to a ranking of the bidders, which was released on December 19, 2010. That ranking placed HPR first, SNC Lavalin second, AECOM third, Halcrow fourth, and Oriental fifth. The second stage involved consideration of the financial aspects of the proposals. Those considerations lead to a re-ranking of the bidders, which was released on March 28, 2011. That ranking resulted in HPR no longer being in first place. Instead, Halcrow was first, followed by SNC Lavalin, then HPR, AECOM and Oriental.
The Word Bank has a unit that is charged with the investigation of allegations of fraud, corruption, collusion and other improper activities in relation to World Bank financed projects. It is called the Vice Presidency for Integrity (“the INT”). In March, 2011, an officer with the RCMP was approached by an INT investigator concerning allegations that had come to the INT’s attention regarding possible corruption involving SNC Lavalin and the Padma Bridge project. In particular, an investigator within the INT, began providing information to the RCMP that the World Bank had received information from four “tipsters”. These tipsters had communicated with the World Bank by email. INT did not meet or know the identity of Tipsters #1 or #3. INT did know the identity of tipster #2 but, at the request of tipster #2, INT refused to reveal his/her identity to the RCMP. INT also knew the identity of tipster #4. That identity was revealed by INT to the RCMP. However, as it turned out, the information from tipster #4 was very general in nature and was essentially irrelevant to the allegations that SNC Lavalin was involved in corrupt practices.
During its investigation, the RCMP did not speak with either tipster #1 or tipster #3. An RCMP officer did speak with tipster #2, but only by telephone. No RCMP officers actually met with tipster #2. As is apparent from a review of the Information to Obtain (“ITO”) filed in support of the first wiretap authorization, most, if not all, of the information provided by the three tipsters had, in turn, been received by the tipsters from other sources. The RCMP did not contact any of the sources of the hearsay information relayed by the tipsters, even though some of those sources were identified by the tipsters, and thus were known both to the INT and to the RCMP.
The RCMP investigation commenced in April 2011. The RCMP applied for and was granted a Part VI authorization to intercept private communications on May 24, 2011 based on an affidavit sworn the same day. That authorization was renewed on June 23, 2011, and again on August 8, 2011. It is these authorizations that were the subject of this challenge. The Crown and Defence counsel agreed that all the wiretap authorizations sank or swam together. The argument concentrated on the first authorization.
There are several conditions precedent that must be satisfied before a judge of a superior court of criminal jurisdiction may grant a wiretap authorization: Are (i) reasonable and probable grounds to believe an offence is being or has been committed, (ii) is the wiretap required as a matter of investigative necessity, and (iii) has the affiant made full, frank, and fair disclosure of all relevant facts, good and bad, to the court. The affidavit in support must not be misleading, and it must be tailored to the facts of the particular case. Boiler-plate language should be avoided. The affidavit must set out the facts truthfully, fully, and plainly. The affiant must be particularly careful not to “pick and choose” among the relevant facts in order to achieve the desired outcome. The informant’s obligation is to present all material facts, favourable or not. While being concise if a laudable objective, it may be only achieved by omitting what both the Crown and Defence would both agree are irrelevant or insignificant details, and not by material non-disclosure. This means that an attesting officer must avoid incomplete recitations of known facts, taking care not to invite an inference that would not be drawn or a conclusion that would not be reached if the omitted facts were disclosed. These three elements are key: One should always bear in mind that the interception of private communications by the state represents one of the most intrusive invasions of a person’s privacy, and short cuts will not be tolerated. Only a superior court judge can authorize electronic surveillance, and the legislative scheme sets a high standard for obtaining these authorizations.
Because there is a high standard, all information provided by the informant must be Compelling, Credible and Corroborated (“the 3 Cs”):
The term “compelling” refers to considerations that relate to the reliability of the informer’s tip such as the degree of detail provided and the informer’s means of knowledge, that is, whether the informer made first-hand observations or merely relied on second-hand hearsay, rumour, or gossip.
The term “credibility” would appear to capture considerations such as the informer’s motivation, criminal antecedents, and any past history of providing reliable information to the police.
The term “corroboration” refers to any supporting information uncovered by the police investigation.
It follows that the evidence of a tip, by itself, is insufficient to establish reasonable and probable grounds. In this case the court found that the information provided in the ITO provided very little other than the hearsay and rumours that emanate from the tipsters. Second, the requisite degree of detail, in the information provided by the informers, was lacking. There was nothing more than generalized allegations of corruption with virtually no detail that would be unique to the persons involved, as opposed to being the equivalent of rumour or gossip or speculation.
Third, the source of the tipsters information, on the ITO as edited, is unknown. Indeed, in many instances it was simply referred to as rumour, or that it is “generally known”, or that it is “suspected”. Fourth, none of the tipsters have proven reliability based on past performance, and there is no independent confirmation of any of the information other than generally available information. Fifth, one cannot use the fact that the intercepted communications provided evidence of the corrupt practices. In all cases, the focus is on the information available to the police at the time of the application rather than information that the police acquired after the original application was made. If it were otherwise, illegally obtained evidence by way of wiretap could be used to justify the wrongdoing of the police. Not only would the ends justify the means, but an illegal wiretap would be justified (made legal) by the results of the wiretap and make an illegal wiretap legal. The law could not sanction such an absurdity.
b. Investigative Necessity
There are three possible routes that the police can take to establish investigative necessity: (i) other investigative procedures have been tried and have failed, (ii) other investigative procedures are unlikely to succeed or (iii) the urgency of the matter is such that it would be impractical to carry out the investigation of the offence using only other investigative procedures. It is the second of these three routes that was invoked in this case. As a result the police had to establish that there was no other reasonable means of investigating the offences concerned. It must be so in order to protect the privacy rights of individuals. It is a test of necessity, not of expediency.
In this case there were a series of conclusory statements made by the affiant, where the basis for them was not obvious. For example, search warrants were discounted when many competition cases are instigated based on search warrants and those types of offences (e.g. bid rigging, price fixing) are not unlike the nature of the corruption offence here.
Undercover operatives are rejected by the affiant, for vague reasons, and yet there is no evidence that any effort was made to see if the use of an undercover agent might be a reasonable prospect. No apparent effort was made to enlist any of the tipsters in that role, nor was any effort made to determine if any of the persons, to whom the tipsters had referred, might be open to acting in that role. The police were required to demonstrate that other investigative techniques were either clearly not going to be successful, or had been tried but failed. While some of the traditional investigative techniques would be unworkable, or not especially productive, for this type of an investigation (e.g. surveillance, tracking devices), others had not proven unsuccessful. Indeed, they had not been tried, or even explored. The authorizing judge had to be satisfied that other investigative procedures were “unlikely” to succeed. There must be, practically speaking, no other reasonable alternative method of investigation, in the circumstances of the particular criminal inquiry. The contents of the ITO failed to establish that there were no other reasonable ways to investigate the allegations being made by the tipsters. There was no “serious testing” of the bald conclusions made by the affiant regarding this second requirement for an authorization. Consequently, the requirement of investigative necessity was not established by the ITO for the first authorization.
c. Exclusion of the Wiretap Evidence
Given that the private communications of the applicants were intercepted without proper authorization, the applicants had established that their rights against unreasonable search, under s. 8 of the Charter, were violated. Where an accused’s rights are breached, the remedy, rather than automatic exclusion of the evidence, the court’s role is to determine whether the admission of the evidence would bring the administration of justice into disrepute. To do this the court judges (1) the seriousness of the Charter-infringing state conduct; (2) the impact of the breach on the Charter-protected interests of the accused; and (3) society’s interest in the adjudication of the case on its merits. This last point means that the more serious the charge, the less likely the evidence will be excluded. In this case, the court confirmed what we already knew--- that fraud and corruption are not considered very serious crimes. The Crown alleged that “corruption is a scourge in our society. Corruption undermines the socio-economic fabric of society, putting public trust at risk, driving prices up and reducing competition. The harm done by corruption is devastating.”. The Court disagreed, finding there was no evidence of any negative ramifications.
On the second factor, the Crown fairly conceded that the Charter-infringing state conduct had a significant impact on the Charter-protected interests of the accused in this case, because it involves the violation of an individual’s rights that attract a high expectation of privacy, that is, their private communications.
The first factor was the seriousness of the Charter-infringing state conduct. In this case the court was troubled by the affiant offers his own opinion on the strength of the allegations. It is inappropriate for the affiant to take on the role of advocate for the issuance of the authorization sought by promoting the strength and validity of the case that s/he is making. It is for the authorizing judge to make that determination, not the affiant. An affiant has a duty to make full, frank, and fair disclosure in the ITO because there is no one present to argue the accused’s side. There is no one to point out the gaps in the information, or weaknesses that may not be so apparent on a simple reading of the ITO.
In this case the police made selective disclosure to the court to improperly countenance a serious invasion of privacy based on nothing more than suspicion and, thus, justify what amounts to little more than a fishing expedition. As a result, all of the wiretap evidence was excluded and the prosecution against those taped collapsed.