Leak of Tax Haven Financial Records Linked to Trudeau's #1 Donor and 3 Former PMs

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Leak of Tax Haven Financial Records Linked to Trudeau's #1 Donor and 3 Former PMs

CBC/Radio Canada and the Toronto Star are part of the International Consortium of Investigative Journalists that reviewed new international tax haven financial records leaked to the German newspaper Sueddeutsche Zeitung. These records, called the Paradise Papers, reveal how the global financial elite avoid and evade paying taxes, thereby leaving the middle, working and poor classes to pick up the bill. Among these elite are Trudeau's #1 donor, Stephen Bronfman, and three former Prime Ministers: Brian Mulroney, Jean Chretien and Paul Martin, as well as former Liberal Senator and fundraiser Leo Kolber and the Queen. 

"Our government has long known — indeed, we got elected — on a promise to make sure that people were paying their fair share of taxes," Trudeau said shortly after his election victory. "Tax avoidance, tax evasion is something we take very seriously." But an investigation by the CBC, Radio-Canada and the Toronto Star has found that Bronfman and his Montreal-based investment company, Claridge Inc., were key players linked to a $60-million US offshore trust in the Cayman Islands that may have cost Canadians millions in unpaid taxes. ...

It's a 24-year paper trail of confidential memos and private records involving two prominent families with Liberal Party ties that experts say appear to show exploitation of legal tax loopholes, disguised payments and possible "sham" transactions.

Among the key questions raised:

  • Is the trust subject to Canadian tax law?
  • Was the trust managed offshore — or in Canada?
  • Were "gifts" made to disguise payments?
  • Were there false invoices?
  • Are taxes owed in Canada? ...

At the centre of the revelations is an offshore entity in the Cayman Islands called the Kolber Trust. It was set up in 1991 by Leo Kolber, who at the time was Claridge chairman and also a Liberal senator. Kolber had been a major Liberal Party fundraiser and once jokingly referred to himself as the Bronfman family's "consigliere." ...

The Kolber Trust had another purpose, too. The Bronfman empire was expanding into Israel and, after working for Claridge in Montreal alongside his father and Stephen Bronfman, Jonathan Kolber then moved to Israel in 1991 to head up the Bronfman efforts. ...

The leaked documents reveal that while Claridge had no official role in the Kolber Trust, most of the initial funding came from the Bronfman family in various forms. Stephen Bronfman personally gave a $5 million US interest-free loan to the Trust in 1997, which was repaid in five months. Over the lifetime of the trust, the Bronfman family and their U.S.-based trusts loaned the Kolber Trust more than $34 million US. And all of it ended up in the no-tax Cayman Islands.




Members of the Canadian elite rank fourth in the number of tax haven users globally, according to the Paradise Papers.

In fact, Canada ranks as one of Appleby's biggest sources of clients revealed in the documents, behind the United States, the U.K. and China.

This vast offshore industry makes "the poor poorer" and is "deepening wealth inequality," said Brooke Harrington, a wealth manager and Copenhagen Business School professor who is the author of Capital Without Borders: Wealth Managers and the One Percent.

"There is this small group of people who are not equally subject to the laws as the rest of us, and that's on purpose," Harrington said. ...

In addition to the Queen, three former Canadian prime ministers have connections to the offshore world that show up in the Paradise Papers::

  • Paul Martin's former shipping empire Canada Steamship Lines — now run by his sons — is one of Appleby's "biggest clients," according to a document in the leak. Martin offered no comment and CSL said it complies with all laws and regulations wherever it operates.  
  • Brian Mulroney was on the board of Said Holdings, run by Syrian-born billionaire Wafic Said, who helped broker the biggest arms deal in British history. Through a lawyer, Mulroney said he considers Said "a good friend" and is "proud" to have served the company.
  • Jean Chrétien lobbied for an East African oil venture called Madagascar Oil. A register of the company's investors lists him as the recipient of 100,000 stock options, but Chrétien told CBC/Radio-Canada he never got, or even heard of, any such options. He confirmed he did briefly do some consulting for the company, and his law firm at the time, Heenan Blaikie, was paid for his work. ...

Marwah Rizqy, a professor of tax law at the University of Sherbrooke in Quebec, said leaks like the Paradise Papers and last year's Panama Papers are vital to understanding how tax havens affect Canada.

"The 21st century will be noted for the fight against tax evasion, the fight against tax havens," Rizqy said. "They're a cancer that can be cured by political will."




Both top Liberal fundraisers Stephen Bronfman and Leo Kolber were involved in the "Kill Bill" campaign to halt Canadian offshore tax haven legislation. The Liberals used their majority in the Senate to block tax haven legisltation is 2007-8.

A Montreal law firm representing clients closely connected to the federal Liberal Party was a leading player in a campaign to block offshore tax legislation passed by the House of Commons, a CBC News/Toronto Star investigation has found. 

Davies Ward, a prominent Canadian corporate law firm, had several clients with offshore interests, including Liberal then-senator Leo Kolber and Stephen Bronfman, an heir to the Seagram whisky fortune.

At issue was legislation first proposed by the federal government as far back as 1999 to tackle what was perceived to be gaping offshore tax loopholes exploited by wealthy Canadians.

Federal Finance Department officials stated that high net worth Canadian families were finding ways to "circumvent" the rules and "disguise" offshore transactions to avoid paying millions in tax back in Canada. ...

 Leo Kolber was a top fundraiser for the federal Liberal Party under prime ministers Jean Chrétien and Paul Martin, a role later assumed by Stephen Bronfman, his godson, in 2013. Kolber was also chair of the Senate committee on banking, trade and commerce.

A review of lobby registry records, parliamentary finance committee hearings and Hansards going back more than a decade shows that Davies Ward and numerous tax law and accounting firms were heavily involved in a campaign that delayed the passage of any such legislation by 14 years. ...

"I think every step of the way the big financiers in this country, the wealthy families, the corporations that benefited from these tax havens just kept the pressure on the government and many times, they were the government," said Judy Wasylycia-Leis, a former NDP member of Parliament who sat on the House of Commons finance committee in the early 2000s.

In the end, the Liberals never did pass legislation to crack down on offshore trusts while in office.

It was only in 2007, after Stephen Harper's Conservative government came to power, that a bill finally passed the House of Commons. The hallmark of that legislation was that all Canadian contributions to foreign trusts would now be taxed on their earnings. ...

ogether with other accounting and tax law firms, Davies Ward turned its attention to the Liberal-dominated Senate, which had agreed to hold its own hearings on the legislation. ...

The Senate spent nine months debating the new changes. "This level of review from a body that has traditionally rubber-stamped legislation is likely unprecedented," a tax lawyer wrote at the time. The proposals died on the order paper when the 2008 federal election was called. A tax firm's newsletter called the campaign to get rid of the proposed legislation "Kill Bill." It said the tax community was "particularly indebted" to Davies Ward for carrying "the torch" in the effort to stop the bill. ...

In 2013, Parliament finally passed a version of the 1999 proposals. The new rules effectively tax Canadian contributions to offshore trusts retroactively to 2007. Parliament did, however, remove some of the farther-reaching aspects of the legislation that tax law firms had said were too broad and would have captured income from non-Canadian sources.





The CBC National has extensive coverage of the Trudeaus-Bronfmans connections in tax havens and tax haven legislation  starting at 3:15 and running up to 41:55, as well as descriptions of how the Queen and Wilbur Ross,  Trump's Secretary of Commerce who is involved in NAFTA renegotiations, are also using these tax havens. Furthermore, some of the world's largest corporations, such as Nike, Facebook and Apple, are also described. The url below has this National broadcast. 




The settler-state of Canada is an oligarchy, a 'Dominion', not a democracy, where money talks and bullshit walks...


CBC's On the Money has an excellent discussion of the games the Conservatives and Liberals have played in passing legislation and making tax treaties that leave giant loopholes for the super wealthy and corporations to avoid paying taxes that is very conservatively estimated at $6 billion. The money could be used to pay for a national pharmacare or daycare program. It can be found from 1:00 minutes to 15:19 minutes of the url below.

Basically, since 2009, both the Conservatives and Liberals have signed tax deals with 25 countries that make it easier for wealthy individuals and corporations to bring money back into Canada from tax havens. They claim the deals allow Canada to get information on who is taking advantage of tax havens. 

However, David Kirzer, a tax lawyer, says the Canadian government has set the standards so high for finding out who is doing this that the laws are unenforceable. For example, to get information from the tax haven country you must have the name of the individual and corporation involved, as well as their tax haven bank account number. In other words the bar for gaining transparency was set so high that almost no information was being obtained. At the same time, the legislation allowed corporations to repatriate tax-free earnings of corporations, as well as that of tax evaders and criminals.

The new July 2017 rules set  by the Liberals allow automatic information exchange but is so full of loopholes that "it gives multinationals a Christmas present in terms of tax policy", according to Kirzner.

The CBC's Evan Dyer said that the NDP's Murray Rankin has the only credible bill, Bill 362, on the order paper that would fix this problem. 






At 24:15 minutes of the url below, the NDP's Murray Rankin discusses his Bill 362, which is aimed at closing the loopholes that enable the widespread abuse of tax havens to avoid and evade taxes.

The bill would make taxation fairer by enabling courts to review tax haven paperwork to determine whether it provides no economic substance to it. If so, the money would become taxable.

This paperwork game is facilitated by shell companies that enable the hiding of income. Canada has the easiest regulations for establishing shell companies among developed countries. The bill would make the formation of such shell companies more difficult and make their transactions more transparent.

In addition, the bill would also require that financial penalties be paid who break these laws, something that did not happen when KPMG advised wealthy Canadian clients to use tax havens as flow through mechanisms to pass on wealth as "gifts" that are not taxed. 

Both the Liberals and Conservatives have established the current system that enables hundreds of billions to escape taxation through these tax havens. The Paradise Papers contain 13.4 million documents that allow 3,300 wealthy Canadian individuals and corporations to avoid paying their fair share of taxes, thereby raising the taxes of everyone else and reducing the strength of our social and infrastructure programs. 




The Taxing Life of Leo Kolber  -  by Linda McQuaig


"The Bronfman's boy."