Big corporations love deferred and non prosecution agreements.

If you have any doubts about this, take a peek north of the border.

There, a giant engineering multinational — SNC Lavalin — is engaged in a campaign to import deferred agreements into Canada.

Why?

Well, for one thing, the Royal Canadian Mounted Police has charged the SNC Lavalin and a number of its former executives with corruption.

If convicted, SNC Lavalin would be barred from government contracts.

What is such a multinational to do?

Do what American corporations did when faced with criminal prosecution.

Change the game so that instead of forcing a company to plead guilty to crime, the company instead could enter into a deferred prosecution agreement.

Under a deferred prosecution agreement, the company is charged with a crime, but the charge is deferred for a period of years. If the company pays the fine and implements certain compliance programs, then the criminal charge is dropped.

Corporations don’t mind paying fines. They don’t mind compliance programs. But they don’t like pleading guilty. They don’t like pleading guilty because a guilty plea has a certain reputational stain that a deferred prosecution agreement doesn’t.

And if found guilty, there is the possibility of probation. And then a judge is involved. And then a judge can sentence the company to do all sorts of things while on probation — like for example, take out advertisements in newspapers and on television telling the world about its criminal activity and the damage it caused.

(This happened recently when PG&E was found guilty in connection with a 2010 natural gas explosion in San Bruno, California that killed eight people, injured 58 and destroyed 38 homes. Last week, a judge sentenced the company to pay a $3 million fine, serve 10,000 hours of community service and advertise its guilt in newspapers and on television.)

SNC Lavalin doesn’t want to face any of that and in particular, being the largest engineering firm in Canada, they surely don’t want to be barred as a corporate criminal from government contracts.

So, the company has launched a public campaign for Canada to adopt deferred prosecution agreements.

SNC Lavalin says, in effect, if it’s good enough for the US and the UK, it’s good enough for Canada.

“If adopted in Canada, it would ensure that Canadian businesses are on the same playing field as their counterparts in countries with a deferred prosecution agreement — such as the United Kingdom and the United States,” the company said in a statement. “This solution would not only be good for SNC Lavalin. It would be good for all Canadian companies that work internationally.”

But not everyone in the US believes that deferred prosecutions are all that great.

David Uhlmann is a former federal prosecutor who now teaches law at the University of Michigan Law School.

In a paper titled The Pendulum Swings: Reconsidering Corporate Criminal Prosecution, Uhlmann writes that “for more than a decade, the Justice Department morphed its approach to corporate crime, eschewing criminal prosecutions in favor of deferred prosecution and non-prosecution agreements that allowed large corporations to avoid the ignominy of criminal convictions.”

“If societal condemnation has substantial expressive benefits, it follows that when corporate wrongdoing occurs and is not prosecuted criminally there may be significant expressive costs,” Uhlmann writes. “When we sanction corporate misconduct with a deferred prosecution or civil penalties that do not involve the same degree of societal condemnation, we minimize corporate misconduct and may risk condoning it.”

Brandon Garrett is a professor of law at the University of Virginia and author of Too Big to Jail.

“I am always concerned when other countries try to import the U.S. model for corporate prosecutions, given how many problems we have had with our fairly new approach,” Garrett told Corporate Crime Reporter. “If Canadians push for a system like that in the UK, where statutes govern deferred prosecution agreements with corporations and judges must review approve them, then they may improve on our system quite a bit. If their goal is to extend more leniency to corporate violators without more supervision and accountability, then they will be learning the wrong lessons from the U.S. experience with corporate crime.”

Even right of center observers like Mike Koehler at Southern Illinois University School of Law and Pamela Adams of Probe International in Toronto question the efficacy of deferred prosecution agreements.

“I don’t think they work,” Adams told Corporate Crime Reporter in an interview last week. “They let the perpetrators of the crime off the hook. It’s not the corporations that commit the crime, it’s the individuals. If you do not punish those individuals — with loss of liberty and fines — then you never have an incentive within the corporation to stop it from happening in the future. The corporation itself doesn’t have a mind, even though corporations are talking about having good corporate culture.”  (For the complete transcript of the q/a format Interview with Pamela Adams, see 31 Corporate Crime Reporter 5(12), January 30, 2017, print edition only.)

SNC Lavalin says that they are not alone in asking the government to introduce deferred prosecutions into Canada.

Who else?

The company says that the major corporate lobbying groups support it — including The Business Council of Canada, the Canadian Chamber of Commerce, the FCCQ (Quebec Federation of Chambers of Commerce) and the Ontario Chamber of Commerce.

What about any non partisan groups?

Yes, the company says.

“The Institute for Research on Public Policy (IRPP), the widely-respected non-partisan Montreal-based think tank, recently released a summary roundtable report where private sector, public policy, academic, anti-corruption and legal experts called for a made-in-Canada DPA, after a period of consultation,” the company says.

Let’s look at that for a moment.

The “widely respected non partisan” IRPP.

It’s true that IRPP put out a paper last year calling for the government “to adopt a regime of deferred prosecution agreements.”

How did the “non-partisan” IRPP come to that conclusion?

“The report is based on a roundtable held in Toronto in November 2015 that brought together legal and academic experts and stakeholders for a frank exchange on how to ensure integrity in government procurement processes while allowing Canadian firms to conduct their business on a level playing field with international competitors,” IRPP reported.

Were there any deferred prosecution skeptics — like Uhlmann, Garrett, Koehler or Adams — among the those at the roundtable held in Toronto?

Apparently not.

And what about footnote three to the report?

“The IRPP thanks Power Corporation, SNC Lavalin and the Business Council of Canada, whose financial support covered some of the costs of this project,” the footnote reads.

Oops.

How is that non-partisan?

IRPP President and CEO Graham Fox refused to be interviewed for this article.

We wrote to IRPP spokesperson Alex Shadeed to ask whether any of the roundtable participants raised objections to the IRPP’s call for Canada to adopt deferred prosecution agreements.

“As the roundtable was held under the Chatham House rule, we cannot divulge the position of individual participants on any issue that was raised,” Shadeed wrote. “Graham explicitly asks every participant to agree to the rule at the opening of the session, so we can’t change it after the fact. They speak freely on the condition of it.”

And exactly how much did SNC Lavalin pay to underwrite the roundtable?

“SNC Lavalin and Power Corporation covered approximately 15 percent of the cost each,” Shadeed wrote. “The Business Council – a bit under ten percent.”

Shadeed wouldn’t divulge dollar amounts.