Opposition parties are accusing the Liberal government of meddling in a decision of the federal prosecution service to proceed with a criminal case against SNC-Lavalin.
Under the law, the federal attorney general does have authority to step in and direct the public prosecutor to negotiate what is known as a remediaton agreement instead of pursuing criminal charges. But how would that work in practice?
A look the SNC-Lavalin file, the remediation-agreement regime and the attorney general's powers:
The SNC-Lavalin case
The Montreal-based engineering firm faces corruption and fraud charges over allegations it resorted to bribery while pursuing business in Libya. SNC-Lavalin says the charges are without merit and stem from alleged misdeeds by former employees who have left the company. A conviction of the company would have the potentially crippling effect of barring the company from bidding on Canadian government business.
SNC-Lavalin has lobbied Ottawa for a Canadian version of the deferred-prosecution agreement provisions in the United States and Britain that give authorities an alternative to seeking a criminal conviction.
The remediation-agreement regime
Legislation passed last year following a public consultation gave prosecutors a new tool, known as a remediation agreement, to deal with a range of corporate economic crimes. The idea is to hold organizations accountable for wrongdoing while avoiding some of the fallout from a criminal conviction for employees, shareholders and others who did nothing wrong.
The corporation would have to accept responsibility for the misdeeds, pay a financial penalty, put compliance measures in place to prevent repeats and make reparations to victims.
A judge would also need to be satisfied the agreement is in the public interest, and that the terms are fair, reasonable and proportionate. Should the judge approve the agreement, the criminal prosecution would be put on hold. Once the organization fulfils the terms of the agreement, the prosecutor would inform the judge and the criminal charges would be formally set aside.
In early September, the federal prosecution service informed SNC-Lavalin it would not invite the firm to negotiate a remediation agreement. The service confirmed this in writing Oct. 9, saying an agreement would be inappropriate in this particular case.
The Globe and Mail newspaper, citing unnamed sources, reported this month that Prime Minister Justin Trudeau's aides attempted to press Jody Wilson-Raybould, attorney general at the time, to intervene in the prosecution, and that frustration with her lack of co-operation was one reason for moving her to a new cabinet post.
The attorney general's powers
Wilson-Raybould could have overruled the prosecution service, directing it to negotiate an agreement with SNC-Lavalin by virtue of a law that allows the attorney general to do so as long as the instruction is in writing and published in the Canada Gazette, the public registry of federal-government decisions.
Trudeau says he told Wilson-Raybould any such decision was hers alone. In the end, she did not overturn the prosecution service's decision. She was shuffled to the veterans-affairs portfolio in January.
Given that a remediation agreement undergoes judicial scrutiny and requires court approval, an attorney general who directed the prosecution service to negotiate one would need to be satisfied the case was appropriate for an agreement, said Jennifer Quaid, an assistant professor of law at the University of Ottawa.
"An attorney general that's not comfortable that this is appropriate is not going to do it, because they're going to be exposed, ultimately," Quaid said.
Having said this, there has not yet been a remediation agreement under the new system, so it is difficult to know exactly how the courts will interpret the law.
In addition, though, an upstanding attorney general mindful of ethical obligations who overrules the public prosecutor "must believe they're doing it for the right reasons," Quaid said.
Where things stand
In October, SNC-Lavalin asked the Federal Court of Canada to review the public prosecutor's decision not to open negotiations on an agreement. The director of public prosecutions says the company's request should be tossed out, and the court's decision is pending.
David Lametti, the Montreal MP who replaced Wilson-Raybould as attorney general, has indicated that he has not ruled out directing the prosecution service to negotiate a remediation agreement with SNC-Lavalin.