Rectifying the sins of the past can be expensive business. But an entirely new management team at Griffiths Energy International, hired during the summer of 2011, was unwilling to ignore the unsavoury truth behind how the exploration and development company acquired oil and gas blocks in southern Chad. After learning of filthy lucre channelled to the country’s ambassador and his wife, Griffiths formed a special committee and began an internal investigation. It voluntarily disclosed the damning conclusions to law enforcement. The real sting came in late January when it pleaded guilty to a criminal bribery-related charge and agreed to pay a $10.4-million fine.
This conviction marks the second belt-notch for the RCMP’s anti-corruption investigative teams, founded just five years ago (the first notch was Niko Resources). Back when the teams were born, global anti-corruption advocates accused Canada of failing to enforce its Corruption of Foreign Public Officials Act (CFPOA), introduced in 1999. But now the criticism is abating. “We’re much heartened by the increased level of enforcement since the specialized units were created,” says Janet Keeping, chair and president of Transparency International Canada.
The anti-bribery squad’s early victories contrast starkly with the RCMP’s troubled record policing other white-collar offences. Founded a decade ago, the Integrated Market Enforcement Teams (IMETs) were conceived to combat the perception the RCMP was ineffectual against securities offenders. That impression endures, amplified by the acquittal of three former Nortel Networks executives in January. How has the anti-bribery squad managed better?
The answer is not obvious, given the challenges confronting both squads. Overseas bribery cases are no cakewalk. Their very nature dictates that evidence must be collected, and witnesses interviewed, in often underdeveloped foreign countries. Use of mutual legal assistance treaties (MLATs) is required—a costly, time-consuming process. The squad is now pursuing 35 investigations, including the much-publicized one involving engineering giant SNC-Lavalin.
Observers credit the diligence of the squad’s 14 investigators, divided between Calgary and Ottawa. Keeping says the personnel she’s encountered “struck me as really serious, competent people.” By contrast, turnover plagued the IMETs; white-collar investigations require specialized skill sets, yet members often departed before they’d accumulated sufficient experience. Observers say that doesn’t seem to be a problem with the anti-bribery squad. Mark Morrison, a partner specializing in anticorruption matters at Blake Cassels & Graydon in Calgary, interacts often with that city’s team. “The people I was dealing with these matters four and five years ago are the same people I’m dealing with today,” he reports.
Peculiarities of the two successful cases certainly helped. Griffiths indicted itself. The earlier convicted company, Niko Resources, was less obliging but equally clumsy in its corrupt tango with Bangladesh’s energy minister. These targets were, in a sense, low-hanging fruit. Chalk it up to luck, or perhaps astute case selection.
Consider too that the corporations were charged, rather than individual executives. Companies can often absorb multimillion-dollar fines. The people behind them may be happy to see the company plead guilty provided no charges are laid against individual executives.
Herein lies one reason the squad likely faces greater challenges ahead. Morrison notes U.S. authorities targeted companies initially but soon pursued individuals, too. He expects a similar pattern here; indeed, the RCMP has already charged three individuals. Unlike corporations, charged individuals stand to be deprived of both personal wealth and freedom, and are thus less likely to strike a plea bargain.
Prosecutors may also be hampered because the CFPOA is blunter than tools available to their British and American counterparts. Extraterritorial application of the CFPOA requires that prosecutors demonstrate a “real and substantial” link to Canada—tougher than it sounds. “The first time a company stands up to charges and takes a position that it’s not going to plead guilty, I think there are a lot of inherent challenges that could make securing a conviction very difficult,” says Morrison.
Foreign Affairs Minister John Baird seems bent on removing the roadblocks. In early February, he tabled amendments to the CFPOA in the Senate. If implemented, these would increase maximum prison sentences to 14 years (from five) and introduce a new offence for keeping false books and records to cover up bribery. Most significantly, the territorial jurisdiction requirement would be eliminated.