Party of One (35 page)

Former Conservative Party senator and fundraiser David Angus was reportedly questioned on the day of the raid. Angus was director-at-large of the MUHC board, which had approved the search committee’s recommendation and hired Porter as director general in 2004—the year the giant hospital project was conceived. Angus and Porter had co-chaired the seven-person committee charged with finding a developer for the hospital project, with Porter in the lead position. Bids were received in 2009, and by early 2010, SNC-Lavalin was chosen by the Quebec government’s final selection committee. That decision was ratified by the MUHC board in April 2010.

Montreal-based SNC-Lavalin, formed in 1991, was one of the five largest construction firms in the world, and operated in over one hundred countries. It built the mammoth, gravity-based Hibernia oil platform, the 407 toll highway north of Toronto, extensions to the Montreal subway, and light rail systems in Calgary and Vancouver. In 2011, the company bought the reactor division of Atomic Energy of Canada for just $15 million. The firm has also been linked to corruption regarding a bridge project in Bangladesh, and in Libya over a 4,000-kilometre water pipeline.

After the police raid on MUHC headquarters, Montreal newspaper
La Presse
reported that SNC-Lavalin had spent $22.5 million in “agent fees” to obtain the hospital contract. Two former top executives of SNC-Lavalin were charged with fraud in November 2012 for allegedly authorizing $22.5 million in
“irregular” payments related to winning the $1.3-billion hospital contract. There have been eight arrests in the case. The money was paid to Sierra Asset Management Inc. The company was registered at the same address in Nassau, Bahamas, as a branch of Compagnie Bancaire Helvétique (CBH)—the Swiss bank run by Porter’s business associate Hermann-Josef Hermanns. This was the same bank where the $120 million for Sierra Leone was to have been deposited. According to Porter, Hermanns had introduced him to Ben-Menashe in 2010. Porter denied knowing anything about the $22.5 million or Sierra Asset Management.

According to a past SIRC chair, a person conducting this sort of business would be required to disclose it to the PMO. And according to the Privy Council Office, Porter would have been subject to the Conflict of Interest Act, the Lobbying Act, and the Ethical and Political Activity Guidelines for Public Office Holders. Porter would have also been subject to an RCMP check of police records, a security check by CSIS under section 13 of the CSIS Act, a check with the Canada Revenue Agency, and a check with the Office of the Superintendent of Bankruptcy.

In November 2012, McGill University brought court proceedings against Porter to recover over $300,000 that remained outstanding on a loan, though no one knew where he was. He turned up in the Turks and Caicos Islands offering private cancer treatment with his partner, Dr. Karol Sikora. Sikora was the doctor who had managed to get convicted Lockerbie bomber Abdelbaset al-Megrahi released from prison on the compassionate grounds that he had terminal cancer and had only three months to live. Al-Megrahi was given a hero’s welcome when he returned to his native Libya—where he lived for another three years.

On November 28, 2012, Pierre Duhaime, the former president of SNC-Lavalin, was arrested by Quebec’s anti-corruption squad on charges of fraud, conspiracy to commit fraud, and using forged
documents in connection with the MUHC contract—a public– private partnership. His arrest was based on evidence obtained in the police raid of MUHC offices, where documents from Arthur Porter were seized.

Meanwhile, former SNC-Lavalin executive vice-president Riadh Ben Aissa was in a Swiss jail, facing charges of money laundering and corrupting public officials—part of a separate international probe regarding $56 million in unauthorized payments made by SNC-Lavalin.
La Presse
reported that $22.5 million of this $56 million went to obtain the MUHC contract. Porter was photographed next to Ben Aissa on April 1, 2010, at the ground-breaking ceremony for the hospital.

On January 25, 2013, a Quebec Superior Court judge issued a ruling ordering Porter to pay back McGill University more than $252,000 relating to a low-interest loan and salary overpayments he had received. Just as Nathan Jacobson had not shown up in a San Diego courthouse for sentencing, Porter did not appear in court to defend himself. Looking embarrassed and incompetent, the Harper government announced supposedly strict new vetting procedures for nominees to SIRC. (The greater scandal might be that such procedures were not there in the first place.) Stephen Harper prepared to appoint a new chair of SIRC. On June 19, 2012, former Conservative MP Chuck Strahl was named to succeed Arthur Porter. Strahl said the PMO took charge of the vetting “to make sure [the appointment] was not going to cause a kerfuffle.”

Despite the PMO’s direct involvement, Strahl barely lasted eighteen months. From the outset, there was a problem with his appointment: the new chair of SIRC was also a lobbyist, and Stephen Harper had known that before he made the appointment. Strahl promised he had a system of what he called “double make-sure” to protect both himself and the public from conflicts
of interest. He would continue his consultancy business but promised not to “lobby” governments. If a potential problem did arise, he would consult the ethics commissioner, Mary Dawson.

Things did not go well. By January 2014, Opposition leader Tom Mulcair had joined the growing list of those calling for Strahl’s resignation. They got it. On January 24, 2014, Strahl was forced to step down as chair of SIRC when it was revealed he had been lobbying on behalf of Enbridge, the company hoping to build the Northern Gateway pipeline from Alberta to BC. Since CSIS conducts surveillance on First Nations and environmental groups opposed to Enbridge’s planned pipeline and the government has openly denounced these groups as “radicals,” the conflict of interest was obvious. But not to everyone. Ethics commissioner Mary Dawson found Strahl’s activities outside SIRC to be in compliance, a judgment that said more about the ethics commissioner’s office than it did about Strahl’s fitness for the appointment. Although Strahl had a good reputation, the potential was certainly there for conflict, even if the new chair promised to recuse himself from anything to do with the pipeline that came up at SIRC. CBC’s Greg Weston found that two other SIRC members sat on the boards of energy companies. For a government obsessed with perception, the optics were bad.

Meanwhile, the more that was revealed about Arthur Porter, the murkier the picture became. Just two weeks before matters came to a head for Porter, he had met Gerhard Baur at his home in Old Fort Bay, near Nassau in the Bahamas. Baur’s company, Canstar Arms Development Corporation, is based in Alfred, Ontario, and manufactures restricted firearms. In the summer of 2010, Porter had driven up Baur’s driveway in his Mercedes and started talking about investing in a state-of-the-art weapons manufacturing plant. He picked up the thread of that conversation during their February 2013 meeting in the Bahamas.
Porter said he wanted to build a $100-million plant in Africa that would employ two hundred people. Millions of dollars would be available to produce five types of restricted weapons in large quantities. The global arms industry is a $12-billion business for Canada. Canada sells weapons and military equipment to countries with questionable human-rights records, including Saudi Arabia, Colombia, and, ironically, the former Victor Yanukovych regime in Ukraine.

The gathering storm of Porter’s legal problems got in the way of his wheeling and dealing about an African armaments factory. On February 27, 2013, an arrest warrant was issued for Arthur Porter. His former right-hand man, Yanai Elbaz, was arrested on February 28, 2013, on charges of fraud, conspiracy to commit fraud, fraud against the government, embezzlement, secret commissions, and laundering the proceeds of crime. He was freed on $100,000 bail. And the charges facing the man who watched over Canada’s spy service were serious: thirteen counts of fraud, accepting a bribe, paying secret commissions, conspiracy to commit breach of trust, and money laundering.

Extradition procedures were started by the Harper justice department. It was a stunning embarrassment for Stephen Harper. The man the prime minister had personally tagged to become the watchdog of CSIS was now a wanted man. Porter denied any wrongdoing, but claimed he was too ill to travel to Canada to face the false charges. He said that he had stage-four liver cancer. For once, even Stephen Harper was nonplussed: “You know, I don’t know what to say. This is obviously a matter that’s ultimately going to be before the courts. I just point out that none of these matters relate to his work in his former federal responsibilities.” The PM offered no basis for that conclusion. In a March 4, 2013, interview with
La Presse
, Porter said: “I don’t like to smear people, but if I opened up my papers, I could cause quite a fuss in
Canada.” (Porter is reported to be writing a book with freelance journalist Jeff Todd.)

In March 2013, Green Party leader Elizabeth May called for Porter’s removal from the Privy Council, calling his appointment to SIRC “perhaps the most shocking failure of judgment and due diligence in Canadian history.” Meanwhile, the company that received the MUHC contract from Porter was in as much trouble as the man who had awarded it. On April 25, 2013, the World Bank barred SNC-Lavalin and one hundred of its subsidiaries from bidding on any of the bank’s projects for ten years. The harsh penalty was meted out after the company itself admitted to paying bribes to get government contracts. In September 2013, the World Bank updated its catalogue of blacklisted companies. Of the 250 companies and individuals listed, 120 of them were Canadian, with SNC-Lavalin topping the list. By comparison, the United States had 46 blacklisted companies.

After months of saying he was too ill to travel to Canada to face charges, Porter and his wife, Pamela, were apprehended in Panama on an Interpol warrant while en route to the Caribbean on Sunday, May 26, 2013. Although Pamela Porter was arrested immediately, Porter flashed his diplomatic passport and talked his way out of being detained on the spot. But he was taken into custody at his hotel the next day.
The Globe and Mail
reported on June 3, 2013, that oncologist Karol Sikora claimed Porter had terminal cancer that would kill him in six months to a year: “The prognosis is not good. He will never go to trial.”
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Sikora had known Porter for thirty-five years. Porter’s lawyer claimed that the doctor and his wife were on their way to Antigua, where Porter said he was scheduled to meet with the prime minister as part of a diplomatic mission for Sierra Leone. The
Montreal Gazette
interviewed a senior official in Antigua who told the paper, “We don’t know anything about that. We weren’t
expecting him.” Porter’s lawyer said the couple would fight extradition to Canada.

On June 26, 2013, Arthur Porter’s status as ambassador-at-large for the Republic of Sierra Leone was revoked, as was his diplomatic passport. Porter remains in a Panamanian jail fighting extradition, while his wife, Pamela Porter, is free on bail in Canada.
⁴

Testimony at the Charbonneau commission into corruption in late May 2014 revealed details of how Porter, and the others charged in the conspiracy to defraud taxpayers, allegedly rigged the bidding in favour of SNC-Lavalin. During a second round of submissions, SNC-Lavalin supporters were placed in key positions on the MUHC selection committees. It was also alleged that former MUHC executive Yanai Elbaz warned a member of the selection committee to “remember where [her] paycheque comes from,” while pushing for the SNC-Lavalin bid. She testified it was clear to her the message was coming from “the boss,” Arthur Porter.

Technical drawings from the rival Spanish consortium were allegedly even slipped to SNC-Lavalin by Elbaz. According to investigator Jean-Frederick Gagnon, this was “the biggest fraud and corruption investigation in Canadian history.” The investigator revealed that $22.5 million was allegedly to be split between Porter and Elbaz. After the money went into Sierra Asset Management, Porter’s share was directed mostly to Regent Hamilton Lumley Associates, a shell company under his wife’s name. A preliminary hearing in the criminal case against Porter and seven others is scheduled for 2015.

As for Porter’s former business partner, Ari Ben-Menashe, his home in Montreal burned down December 2, 2012. A man was seen running from the scene. The Montreal arson squad investigated whether a military-grade accelerant was used.

The case remains unsolved.

I
T
IS
NOT
every prime minister who hires a convicted man with eighteen months of jail time on his résumé as his senior policy analyst. But when Stephen Harper won the 2006 election, that is exactly what he did. Bruce Carson had served eighteen months in jail for two charges of theft in 1983, and was convicted of fraud in 1990. Carson was part of Stephen Harper’s transition team, which also included Chief of Staff Ian Brodie. Carson went on to become Harper’s chief policy analyst and troubleshooter from 2006 to 2008. “The Mechanic,” as he was known because of his ability to fix tricky problems, also had a top-secret security clearance.

After leaving the PMO in 2008, the personable and outgoing Carson was given a soft landing by Stephen Harper. Carson was appointed the inaugural head of the Canada School of Energy and Environment (CSEE) in Alberta, administered by the Universities of Alberta, Calgary, and Lethbridge. Although he had no science background, Carson found himself astride an institution with 260 researchers and almost 7,000 students. It also had one other thing—$15 million in federal funding at a time when established scientific organizations run by scientists were having their budgets slashed or their doors closed.

Although the stated goal of Carson’s new school was to make Canada a clean-energy superpower, it was essentially a platform for the oil industry. Although Carson claimed he wanted it to become the go-to place in North America for research into the development of clean energy and protection of the environment, his closest working associates were conventional energy producers. Carson felt that the oil companies in the tar sands had been unfairly criticized for producing dirty oil. In his speeches, he came across more as a government spokesperson than the head of an independent research facility. He dismissed Kyoto as unrealistic, and defended the Harper government’s environmental policy at every opportunity. Carson used the school to fund a series of
multi-million-dollar energy exhibits in national museums, which were criticized by environmentalists as a public relations show for the tar sands.