Bread price-fixing scheme elicits debate over watchdog’s
The national bread price-fixing scandal has sparked heated debate over the Competition Bureau’s immunity granting program, with a law enforcement expert defending the practice and a government accountability critic arguing it just lets offenders get away with crimes.
Bakery wholesaler George Weston Ltd. and subsidiary grocer Loblaw Companies Ltd. were granted immunity from prosecution in return for their co-operation in the price-fixing investigation under a long-standing bureau program that grants freedom from sentencing to the first party ina car tel who volunteers to co-operate.
According to court documents released Wednesday, the bureau alleges that senior officers at George Weston and rival Canada Bread Co. Ltd. communicated to raise prices in lockstep, then met with five nationalbread retailers who agreed to implement the higher prices.
“If you have an effective whistleblower program and you have the resources to be doing effective best-practice inspections and audits, then the immunity program just amounts to letting one of the violators off the hook. And that’s a bad idea,” said Duff Conacher, co-founder of Democracy Watch.
Conacher said the Competition Bureau’s immunity program offers an offending company an escape route if it becomes aware that its violations are about to be exposed — for example, if a disgruntled employee threatens to do just that.
He said the bureau would be better off if it provided sufficient compensation and better protection for whistleblowers to offset their significant personal risk of losing their jobs or being taken to court.
The immunity program was used in 2007 when Cad bury Adams Canada Inc. agreed to give detail sofa chocolate price-fixing conspiracy in return for avoiding prosecution.
The investigation resulted in criminal charges against three firms and three individuals, and one of the companies, Hershey Canada Inc., subsequently pleaded guilty and was fined $4 million in 2013.
“The bureau’s immunity and leniency programs offer powerful incentives for organizations and individuals to come forward and co-operate with the bureau’s investigations, and have proven to be among our best weapons to combat criminal cartels under the Competition Act,” the bureau stated in 2015 as it announced charges had been stayed against the rest of the defendants.
Senior investigator Sandyaccounting firm Grant Thornton LLP, said being able to offer immunity is a vital tool in crimefighting, citing his experience in his current role, as well as during 12 years as a street cop and narcotics officer with the Hong Kong police force in the 1980s and ’90s.
“If you are trying to investigate and prosecute people involved in conspiracy, there really isn’t a better way to do it than to get a cooperating insider,” he said. “And that applies to organized crime or narcotics, any kind of conspiracy. The most effective way is, No. 1, to get someone to blow the whistle ... or No .2, to do a deal with somebody who is a member of the conspiracy .”
Boucher said he find sit frustrating when a member of a conspiracy or cartel gets off “scot-free” but pointed out that often, evidence of a conspiracy can only be provided by someone who was in the room when the parties were conspiring.
Conacher said Canada should emulate U.S. government agencies which reward whistleblowers with a percentage of recovered funds for reporting wrongdoing.