The Greatest Scandal in Canadian History

In the last newsletter I described how my former client in Montreal, SNC-Lavalin, was involved in the Grand Man Made River in Libya. In 2011, when the civil war took place, Muammar Gaddafi’s son, Saadi, needed to get out of the country. Fast. An SNC executive facilitated a payment of $200K to charter a private jet to fly him to Niger. But that wasn’t the only crime SNC was involved with. The construction of the super hospital in Montreal has been called “the biggest fraud corruption in the history of Canada.”

The saga began in 2007, when the McGill University Health Center (MUHC) called for bids for a CAD 1.5 billion contract to build a state-of-the-art hospital. Arthur Porter, the CEO of MUHC, and another employee coordinated the bidding process. Porter was also a senior official in the Canadian government and very involved in the country’s security. Porter and his colleague apparently passed on technical information to SNC so they would have an advantage in the bidding process. SNC bribed Porter for his services through a special company in the Bahamas. Is it any wonder that SNC won the building contract in 2010?

Some executives at SNC grew suspicious. In 2011 they wondered why one of their employees wanted CAD 34 million related to a contract in Alberta to be paid outside the country. The next year, Pierre Duhaime, the CEO of SNC, was arrested and charged with using a counterfeit document during the bidding process. The fake document was key to transferring the payoff money to Porter. A year later, Porter, his accomplice at the hospital, and an employee of SNC were charged with fraud and money laundering. Maybe that was why plans were canceled to pave an “Arthur T. Porter Way” street on the hospital property.

Then it really gets weird. Porter and his wife fled to Panama in 2013, where they were arrested based on a warrant from a Montreal courthouse. Porter’s wife returned but Porter remained in Panama. He was a radiation oncologist and was treating himself for lung cancer. Unsurprisingly, he died there. His wife returned to Canada and was convicted in 2014. She was sentenced to 33 months in prison. Apparently she never got to see her husband again after leaving Panama.

Pierre Duhaime resigned from SNC in 2012 because of the scandal. He was later charged and in 2019 pleaded guilty for breach of trust and was sentenced to 20 months of house arrest. He didn’t get punished with a longer sentence because the prosecutor found a credibility problem with a key witness — Gilles Laramée, SNC-Lavalin’s former chief financial officer. (I worked with Gilles and his people back in the 90s when Bank of Montreal participated on the Great Man Made River Project in Libya.) The disciplinary council of the Order of Engineers of Quebec fined him and said that he’d tainted “the honour and dignity of the profession.” SNC successfully sued Duhaime for more than CAD 2 million. The other employee at SNC pleaded guilty and was sentenced to 51 months in prison.

So how did this affect the construction of the giant hospital? It was completed. On the way from the Dorval airport you can see it on a hill that used to be a rail shipping container yard. However the total cost was CAD 2.355 billion, more than double the original estimate. Here is a photo by DarkFireTaker:

There are still many questions surrounding the scandal. Why didn’t Arthur Porter return to Canada to fight the fraud charges? He could have gotten bail and received more sophisticated cancer treatment than he got in Panama. He said he feared he would become a scapegoat if he returned. He also appeared fearful for his safety. Instead he was confined to a bad jail cell in Panama and treated himself with chemo drugs his daughters brought to him.

The crime writer in me finds this interesting. Did he really die there? Has his wife spent vacations outside of Canada? Then there are the questions about the Canadian government. Why didn’t Canada press harder for his extradition? And why did Panama ignore its own extradition laws? As chairman of the Security Intelligence Review Committee, did Porter have secrets that the government did not want revealed? He was a big supporter of the Conservative party and had promised to interviewers that he had much to tell. He also denied all wrongdoing.

Where is Dudley Do-Right when you need him?