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It's taboo to talk about Canada's real corporate scandal PDF Print E-mail
Peace News
Posted by Joan Russow
Friday, 22 February 2019 10:00

By Matthew Behrens Rabble

http://rabble.ca/columnists/2019/02/its-taboo-talk-about-canadas-real-corporate-scandalFebruary 22, 2019

While the SNC-Lavalin scandal has torn another strip off the "sunny ways" prime minister, there's another

POLITICS IN CANADA

Prime Minister Justin Trudeau visits CFB Esquimalt. Photo: Adam Scotti/PMO

While the SNC-Lavalin scandal has torn another strip off the "sunny ways" prime minister, there's another corporate scandal that makes the financial figures in that case -- mere hundreds of millions of dollars in fraud and bribes -- seem like pocket change. But no major political party will touch it, which speaks to the manner in which an all-party commitment to bedrock Canadian militarism squelches democratic discourse and strangles any opportunity for real economic justice.

The corporate scandal you won't hear about on the campaign trail is the largest procurement project in Canadian history, one that will result in forking over at least $105 billion in corporate welfare to war manufacturers for a completely unnecessary fleet of Canadian warships.

With every political campaign comes the costing question: how will modest investments in daycare, housing and pharmacare be paid for when Canada struggles with debt and deficits? But the question that will not be asked is whether voters want to mortgage their grandchildren's financial future for a project that will line the pockets of Irving Shipyards and the world's largest war profiteer, Lockheed Martin.

On February 8, the Canadian government awarded the design contract for those warships to Lockheed Martin. Even working from the false assumption that these warships are needed -- no logical rationale has been provided -- critics have pointed out that the design proposed by Lockheed Martin has never been built and tested; hence, any real sense of the cost (and such megaprojects have a way becoming sinkholes for billions robbed from the public purse) is conservative at the estimated $105 billion. Once committed, there is no way the government will say no when Lockheed Martin and Irving Shipyards call out for another $10-$30 billion in "unforeseen costs."

In addition, the lives of Canadian sailors (which have never been a concern for those who order them into conflict from their safe bunkers in Ottawa) will be at risk as well. These megaships, with a limited life expectancy of 25 years, will likely be sitting ducks vulnerable to advanced warfare techniques that will be light years ahead of the eventual finished products. Indeed, as former Canadian navy commander Ken Hansen wrote in December 2018, by the time these warships sail the high seas, they will be essentially obsolete against high-tech weapons systems that remain the world's most maddening annual investment.

Again, even assuming these are needed, what will Canada do after their 25-year life span is over? Spend another $105 billion?

The boondoggle that booted Wilson-Raybould

Canada's warship boondoggles are at the root of the current political crisis swirling around the Liberals. When Trudeau removed Jody Wilson-Raybould from the attorney general's office, he claimed it was a move precipitated by former Treasury Board president Scott Brison's decision to leave politics. But Brison's sudden disappearance from cabinet appears linked to the bizarre case of Vice Admiral Mark Norman, who was arrested by the RCMP for allegedly leaking cabinet secrets related to a Harper-era navy contract that went to Quebec's Davie Shipyards, an Irving Shipyards competitor. It appears that Brison undertook a strenuous campaign to halt the Davie contract on behalf of Irving. He is expected to be called to testify at the Norman trial later this year, but says his resignation has nothing to do with that upcoming court date.

As that court case continues to proceed at a snail's pace, efforts to receive further disclosure will likely unveil even more information about the corporate influence at cabinet level (which is standard practice in Canada, as we have witnessed in cases as diverse as the unending subsidies doled out to tarsands producers and companies like Bombardier, as well as the purchase of a $4.5-billion leaky pipeline last year and the $9.2-billion backstop of the Muskrat Falls megadam).  

While politicians of all stripes will express the usual consternation about corruption in politics, not a soul among them will focus on the new warship scandal. Unfortunately, the addiction to militarism that drives the NDP, the Liberals, the PCs and, in all likelihood, the Greens, will render this a non-issue in 2019 unless we make some noise about it. We saw this addiction in 2015, when Tom Muclair's NDP refused to call for cancellation of the $15-billion Saudi weapons contract. It was a poor decision that prioritized political power games over the lives of Saudi women being tortured in Riyadh prisons and Yemeni children who die at a rate of 10 an hour.

In 2019, there will be no referendum on whether Canadians wish to take on a $105-billion debt that will serve no social purpose whatsoever. Yes, there will be some well-paying jobs in the shipyards, but the majority of the gravy will go to investors in war industries. Imagine that public investment being directed toward renewable energy, clean water in all Indigenous communities, affordable housing, free child care, truly accessible health care, guaranteed annual income support and programs, the arts, tuition, and all the other underfunded programs people need to live decent lives.

Canada's contractor: Unending corruption

Part of the furor over SNC-Lavalin centres around whether a company can be an honest executor of government contracts when it has a high rate of scandal. The Transparency International group reports that even as maligned an institution as the World Bank has banned SNC-Lavalin and its subsidiaries for over 117 instances of corruption. SNC-Lavalin currently claims that it is in pristine shape because the guys involved in defrauding the Libyan people of hundreds of millions of dollars and spending tens of millions on bribes have departed the company. But SNC-Lavalin subsidiaries continue to make the list of banned companies as recently as October 2018, when the World Bank issued a five-year ban to four company branches. In January 2018, an additional five SNC-Lavalin companies were banned when the World Bank found them guilty of fraud and corruption.

But this is the way business has always operated. While SNC-Lavalin was successful in having Canadian law changed to try and protect itself from future prosecutions, the company that has received the Canadian warship design contract -- Lockheed Martin -- is the ultimate master class of corporate corruption.

The U.S. government's Federal Contractor Misconduct Database notes that Lockheed Martin has been found guilty of misconduct in 86 instances since 1995. It's an accepted price of doing business for war industries which can write off their penalties (Lockheed Martin received over $50 billion in U.S. weapons contracts in 2017, while the price for over two decades of bad behaviuor was a paltry $767 million in penalties).

Almost weekly, new misconduct claims arise. Indeed, a mere two weeks ago, Lockheed Martin was subject to a U.S. Justice Department complaint about false claims and kickbacks on a contract to clean up the devastated Hanford nuclear site in Washington State.

For those wondering about the due diligence undertaken by the Canadian government in choosing a company to design Canada's $105-billion warships, it is quite instructive to peruse the readily available public information that Ottawa is quite happy to ignore in plowing ahead. The list of complaints against Lockheed Martin pursued by the U.S. Justice Dept. is massive. It includes failure to pay overtime, falsification of testing records, mismanagement of retirement funds, groundwater contamination, nuclear safety violations at the Oak Ridge plant, contract fraud, deficiencies in radioactive work controls, nuclear waste storage violations, violations of the U.S. Arms Export Control Act and International Traffic in Arms Regulations, the unauthorized export of classified and unclassified technical data, the failure to comply with requirements for safeguarding classified information, false and fraudulent lease claims, age discrimination, producing defective software on the F-35 Joint Strike Fighter (a project to which Canada has maddeningly contributed over $500 million in corporate welfare), groundwater cleanup violations, Toxic Substances Control Act violations, overbilling and mischarging the government, wrongful deaths, retaliatory firings, PCB contamination, conspiracy to commit wire fraud, National Labor Relations Act violations, sexual and racial discrimination, procurement fraud, unfair business practices, nuclear reactor safety violations, emissions violations, and whistleblower retaliation.

Meanwhile, the U.S. Equal Employment Opportunity Commission filed a lawsuit last September claiming Lockheed Martin "violates the Americans with Disabilities Act (ADA), which prohibits disability discrimination and retaliation for opposing it and requires employers to provide reasonable accommodations to individuals with disabilities unless it would cause an undue hardship."

Profit from torture and nuclear weapons

Then there's a little matter of torture, in which Lockheed Martin companies were found complicit early on during the so-called war on terror. Aside from the daily business of corruption, what Lockheed Martin actually produces -- the world's most dangerous weapons -- would appear to be in complete contradiction to all the Trudeau/Chrystia Freeland talk of a rules-based order founded on peace and respect.

Lockheed Martin executives have spoken unabashedly in defence of the Saudi regime's appalling human rights record. On June 23, 2016, the European Centre for Democracy and Human Rights, Defenders for Medical Impartiality, and the Arabian Rights Watch Association filed a complaint against the Boeing Company and Lockheed Martin for alleged breaches of OECD guidelines. The companies' products were alleged to have contributed to human rights violations in Yemen by Saudi forces (last August, we learned, without surprise, that the missiles that murdered 40 Yemeni children was made by Lockheed Martin).

Perhaps it is also no accident that the Trudeau government's expressed opposition to the Treaty on the Prohibition of Nuclear Weapons seems to have been developed in the executive offices of their favoured weapons of mass destruction contractor: Lockheed Martin, which continues to develop the most dangerous nukes the world has ever known. Indeed, the U.S.-based multinational produces the Trident II (D5) nuclear missiles (on average the equivalent of 25 Hiroshima bombs) for U.S. and U.K. arsenals, along with Minuteman III nuclear intercontinental ballistic missiles and the new Long Range Stand-Off (LRSO) missile. They are also a primary recipient of the trillion-dollar investment begun by the Obama administration in a new generation of nuclear weapons. 

As Forbes recently reported, "a single D5 equipped with multiple independently targetable reentry vehicles carrying nuclear warheads can destroy a small country such as North Korea. A handful of D5s could collapse the entire electrical grid, transportation network and information infrastructure of even the largest countries. And the Navy has hundreds of D5 missiles."

Addicted to militarism

While Lockheed Martin is quite the loathsome corporate entity, Irving is no lovey-dovey Canadian boy scout in the corporate world, instead acting as a privately held company to squeeze as many dollars out of the public purse as possible. As the National Observer reports, Irving and its subsidiaries "don't have to reveal any financial information to the public -- including how much they receive in government handouts, earn in profits, pay in taxes or invest. They also don't pay out dividends to shareholders -- only members of the Irving family presumably receive the wealth."

It was Irving that Scott Brison went to bat for in closed cabinet sessions that led to the arrest of Mark Norman. Meanwhile, the federal government and Irving teamed up to oppose a trade tribunal complaint that alleged the awarding of the warship contract violated a series of trade rules. In their defence, Canada and Irving argued that the warship contract is exempt from normal trade laws because they have invoked a  "national security exception" to keep the issue beyond the tribunal's jurisdiction.

What happens next is entirely up to everyone who lives in this land known as Canada. Are we willing to face up to how our addiction to militarism kills, whether it's the blood of Yemeni children being murdered with Canadian-made and exported weapons or the frozen bodies on Canadian sidewalks because Ottawa continues to invest the largest amount of discretionary funding into war instead of housing for all?

It's certainly a question that will only be on the table if we place it there.

Matthew Behrens is a freelance writer and social justice advocate who co-ordinates the Homes not Bombs non-violent direct action network. He has worked closely with the targets of Canadian and U.S. 'national security' profiling for many years.

Photo: Adam Scotti/PMO

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Last Updated on Saturday, 09 March 2019 20:13
 

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