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PostPosted: Mon Nov 06, 2017 8:32 am    Post subject: top Liberal fundraiser named in Paradise Papers Reply with quote

( more questionable news surrounding affluent high level liberal party members , there top fundraiser is mentioned in the paradise papers )

Top Liberal Party fundraiser, 3 former PMs named in Paradise Papers

CTVNews.ca Staff
Published Sunday, November 5, 2017 1:53PM EST
Last Updated Sunday, November 5, 2017 8:59PM EST

Liberal Party fundraiser Stephen R. Bronfman, Queen Elizabeth II, and several of U.S. President Donald Trump’s allies are said to be among 120 international figures and companies who have been using offshore tax havens, an international team of journalists has learned.

The financial dealings are documented in the so-called “Paradise Papers,” a trove of 13.4 million documents originally leaked to the German paper Süddeutsche Zeitung from an offshore law firm called Appleby.

The documents have been the subject of a massive investigation by the International Consortium of Investigative Journalists (ICIJ) – the same group that dropped the Panama Papers bombshell in April of 2016.

Stephen Bronfman
The Liberal Party of Canada's chief fundraiser, Stephen Bronfman, attends the party's caucus retreat in Georgetown, P.E.I. on Wednesday, Aug. 28, 2013. THE CANADIAN PRESS/Andrew Vaughan

The Paradise Papers contain nearly 7 million financial documents and emails revealing the offshore interests and activities of “more than 120 politicians and world leaders, including Queen Elizabeth II,” according to the ICIJ. The group says details about the Queen indicate that her “private estate indirectly invested in a rent-to-own loan company accused of predatory tactics.”

Former Canadian prime ministers Jean Chretien, Paul Martin and Brian Mulroney are among the most high-profile individuals named in the document release, which has more than 3,000 references to Canadians.

Chretien is said to have received shares in a Madagascar-based oil and gas venture in July, 2007 in exchange for consulting work. The Appleby files contain no evidence that Chretien exercised the options.

Chretien said in an interview that he was not aware of the shares in Madagascar Oil Ltd.

Martin was named due to his former ownership stake in CSL Group Inc., an international shipping firm now run by his sons and said to be one of Appleby's “biggest clients,” according to a leaked document.

A spokesperson for Martin told the ICIJ that the former prime minister “has not been involved in CSL in over a quarter century and is not in a position to comment on its operations.”

Mulroney is listed in the Appleby files as a director of Said Holdings Ltd. between 2004 and 2009. The Bermuda-based company is controlled by Syrian-Saudi businessman Wafic Said, who is said to have had a key role in the multi-billion dollar al-Yamamah “oil-for-arms” deal between the U.K. and Saudi Arabia.

A response from Said confirmed Mulroney’s involvement in his family’s investment company, and referred to his “valuable contributions.”

The federal Liberal Party’s chief fundraiser, Stephen R. Bronfman, was also named. The documents suggest Bronfman’s private investment company, Claridge, moved millions to offshore entities owned by his godfather, Leo Kolber, another former Liberal fundraiser.

Bronfman is also the revenue chair on the Liberal Party's board of directors.

A lawyer for the Bronfman and Kolber families told the ICIJ that “none of the transactions or entities at issues were effected or established to evade or even avoid taxation,” and that they “were always in full conformity with all applicable laws and requirements.”

Any “suggestion of false documentation, fraud, ‘disguised’ conduct, tax evasion or similar conduct is false, and a distortion of the facts,” he said.

A spokesman for Trudeau declined to comment to the ICIJ.

Before the ICIJ report was released, the Canada Revenue Agency issued a statement on Friday outlining its efforts to “combat those hiding their assets offshore.”

The agency said it has invested $1 billion to ensure the integrity of Canada’s tax system, and noted that it currently has more than 990 audits and more than 42 criminal investigations related to offshore underway.

Neither the CRA nor any court has determined the Canadians did anything wrong.

ICIJ reporter Will Fitzgibbon said the investigation peels back the curtain on a complex web of financial dealings well-hidden from public eyes for over five decades.

“While there is not necessarily evidence of smoking-gun wrong doing . . . the problem with these secretive offshore entities is that money can be moved in ways so that the tax man, be it in Canada or elsewhere, might not be able to follow,” he told CTV News Channel on Sunday from Washington.

At least 13 allies of U.S. President Donald Trump are also included in the Paradise Papers, the ICIJ says. The ICIJ mentioned Trump’s commerce secretary, Wilbur Ross, by name in their release on Sunday, saying that he holds “interests in a shipping company that makes millions from an energy firm whose owners include Russian President Vladimir Putin’s son-in-law and a sanctioned Russian tycoon.”

The financial documents go back up to 50 years. However, the Ross documents are quite recent, according to Fitzgibbon.

“There’s a real question here from the Paradise Papers as to how and why a key member of the U.S. administration is involved in a company doing deals with Russian entities that many experts say is extremely close to President Putin,” Fitzgibbon said. He added that Ross’ representatives say the deal with the Russian shipping firm was signed before Ross took a post in Trump’s cabinet.

Further details about the figures implicated in the Paradise Papers are expected to come throughout the week.

With files from The Canadian Press


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PostPosted: Mon Nov 06, 2017 8:35 am    Post subject: Reply with quote

CBC Investigates
Trudeau's chief fundraiser linked to Cayman Islands tax scheme

Massive offshore leak reveals secrets of Stephen Bronfman's company

By Harvey Cashore, Chelsea Gomez, Gillian Findlay, CBC News Posted: Nov 05, 2017 1:00 PM ET| Last Updated: Nov 05, 2017 9:57 PM ET

Stephen Bronfman, left, is the chief fundraiser for the Liberal Party and a long-time friend of Prime Minister Justin Trudeau, right.

In the early summer of 2015, Justin Trudeau was the star attraction at a private fundraiser in Montreal hosted by philanthropist and financier Stephen Bronfman.

Bronfman, an heir to the Seagram family fortune and a close Trudeau family friend, was revenue chair of the Liberal Party. That day, according to news reports, the two men raised $250,000 in under two hours.

Within weeks, the Liberals would launch their federal election campaign, sweeping to power on a "Real Change" platform that focused on the middle class and a promise to tax the rich.

"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?

"I would say there are lots of red flags, and I would expect tax authorities specifically to be very interested in following up," said University of Florida trust law professor Grayson McCouch after spending two days examining the files.

Denis Meunier, a former senior enforcement official at the agency who also reviewed key documents in the leak, said "this definitely merits an audit by the [Canada Revenue Agency]."

Part of massive financial data leak

The documents are part of a massive offshore leak released today dubbed the "Paradise Papers," which was obtained by the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ). It's a cache of nearly 13.4 million files from two offshore services firms and 19 different tax havens.

Seven million of the leaked files come from the corporate law firm Appleby, which has operations in Bermuda, the Cayman Islands and other offshore jurisdictions.

Paradise Papers: The scope

The CBC/Toronto Star investigation also reveals how Bronfman's longtime law firm — which also represented other offshore clients — helped mount a lobbying campaign in Ottawa that for several years fought legislation designed to crack down on offshore trusts.

■PARADISE PAPERS | Trump's commerce secretary benefited from ties to Putin's inner circle
■PARADISE PAPERS | Queen's estate 'not aware' it held indirect offshore investment

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 Paradise Papers show that Leo Kolber's children, Jonathan and Lynne, were the beneficiaries of the trust. Internal financial records show they received millions of dollars in "disbursements."
■Read about the firm that lobbied to block offshore tax legislation on behalf of Bronfman, Kolber and others

In 2007, for example, $3 million US was wired to Jonathan Kolber for "living expenses" and to help purchase a Manhattan apartment. In total, he received $16.5 million US tax-free from the trust. The documents also show his sister Lynne received $1.2 million US.

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.

According to one memo, "for every dollar the Bronfmans invested in Israel Jonathan's reward was a 15 per cent share" paid through the trust. "This is how and why the trust was set up."

The Paradise Papers show that senior executives of Stephen Bronfman's company, Claridge, were routinely offering advice and arranging business transactions between the Bronfman family and the Kolber Trust.

In addition to the beautiful beaches, the Cayman Islands are known as a 'tax neutral jurisdiction,' where foreign companies pay no tax. (David McFadden/Associated Press)

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.

Stephen Bronfman and Leo Kolber declined requests for an interview. William Brock, a lawyer representing Stephen Bronfman and Jonathan Kolber, denied any impropriety. "My clients have always acted properly and ethically, including fully complying with all applicable laws and requirements."

He stated that any "suggestion of false documentation, fraud, 'disguised' conduct, tax evasion or similar conduct is false."

Managed in Canada?

Offshore trusts can be perfectly legal. They are not subject to Canadian law so long as they meet certain conditions.

And for the Canada Revenue Agency, the most important rule for offshore trusts is that they really did have to be offshore — that's where the decisions, the so-called "mind and management," had to be made.

Yet the Paradise Papers — which contain more than 5,000 documents from the Kolber Trust file alone — reveal numerous examples where decisions were made and approved not in the Caymans, but in Canada.

There are memos seeking the "approval," "authorization" and "written confirmation" for business decisions from Montreal-based investment manager and accountant Don Chazan. The Paradise Papers also show there are phone calls and meetings in Montreal between Chazan and Jonathan Kolber.

Leo Kolber
Leo Kolber was a major Liberal Party fundraiser, and once jokingly referred to himself as the Bronfman family’s 'consigliere.' (Fred Chartrand/Canadian Press)

Chazan also kept a set of Kolber Trust books in Montreal, two former colleagues told the CBC.

"He was the adviser. He's the guy who made the decisions," Jonathan Kolber told the CBC in a phone interview.

Tax experts consulted by the CBC and the Toronto Star say that admission could spell tax trouble for the Kolber Trust.

"If that's true, then obviously there's a strong argument the trust was managed in Canada and potentially resident in Canada," said Dalhousie tax law professor Geoffrey Loomer.

William Brock, the lawyer for Stephen Bronfman and Jonathan Kolber, said that "all investment and other decisions" in the Kolber Trust were made by Cayman Islands trustees.

He also denied suggestions that Montreal accountant Don Chazan kept a set of Kolber Trust books in Montreal.

"Contrary to your unfounded assertion there was no second set of books," Brock said.


However, Rick Doyle, a former vice-president of Claridge told CBC that Chazan was keeping a second set of books. "That's what my understanding [was of] why Don Chazan was there."

Ken Shettler, an accountant who worked with Chazan, also said that Chazan did bookkeeping in Montreal, at the request of Jonathan Kolber, who was skeptical of records kept in the Cayman Islands. "He [Jonathan Kolber] didn't have confidence in their accounting so basically we were another set of books."

All that activity in Montreal could spark the interest of the Canada Revenue Agency, said Sherbrooke University professor Marwah Rizqy.

"If at the end of the day the major decisions are taking place here, the mind in management is in Canada," Rizqy said. If so, said Rizqy, that could have tax implications for the Kolber Trust in Canada.

In a second letter to CBC News, Kolber's lawyer, William Brock, said Chazan was engaged by Jonathan Kolber directly, and not through the Kolber Trust, to "confirm that all financial transactions of the Kolber Trust had been properly recorded."

Disguised payments?

The Paradise Papers appear to show that the Bronfmans and Kolbers were themselves concerned about links from Canada to the Cayman Islands and the possible tax implications.

One Paradise Papers memo states, "tax advisers for the Bronfmans and the Kolber family advised" that the work of a Montreal accounting firm not be billed as expenses of the trusts.

Emails and documents show in 2006, they were concerned about an $81,750 US invoice for work on the Kolber Trust paid out to Don Chazan.

The tax advisers recommended the payment be taken off the books and "allocated" instead as "loan repayment" to a third party. "This results in one less formal link between the trusts and entities outside Cayman," says the memo.

"That looks very suspicious," said McCouch, the University of Florida tax expert. "It looks like it was intended to mislead. It looks as if it was intended to conceal and to misrepresent the nature of the payment."

Kolber's lawyer, William Brock, said there is "nothing inappropriate in noting" there would be "one less formal link" between Canada and the Kolber Trust. Brock stated that essentially all of Mr. Chazan's services were rendered in the Cayman Islands."

The Paradise Papers show that Chazan visited the Cayman Islands trust company once a year.

Avoiding U.S. taxes?

In 2007, the Kolber Trust had a tax problem south of the border. Lynne Kolber was living in the U.S., but had apparently failed to declare payments of $1.27 million US out of the trust for the previous decade. She paid the back taxes, but the trust managers devised a plan to make sure that going forward, she would keep getting funds tax-free.

CBC used a slightly different methodology than ICIJ and found more than 100 additional Canadian entities in the data.

In 2007, Lynne Kolber was removed from the paperwork as a beneficiary. A memo contained in the Paradise Papers stated that Lynne will be "taken care of in other ways" and her brother Jonathan "will arrange to make gifts to her instead."

"Jonathan will arrange to make gifts to her instead of the trust making the present distributions to her," the 2007 Paradise Papers document states.

Gifts between family members are not taxable in the U.S., so it might have seemed like a simple solution. But McCouch said it may have violated tax rules.

"I would think the IRS would be very interested in this," he said, describing it as "precisely the sort of abusive transaction" U.S. authorities have tried to crack down on.

The answers CBC News received from Jonathan Kolber's lawyer about these gifts appear contradictory.

In a first letter to the CBC, William Brock defended the decision in 2007 to make gifts to Lynne Kolber through her brother, instead of direct "distributions" from the trust.

"Jonathan Kolber made gifts to his sister, who is an artist and a writer," Brock wrote. "Making a gift to your sister is not tax evasion and any pretention [sic] to the contrary would clearly be improper."

In a second letter, Brock stated that after 2007, there were "no gifts made by Jonathan Kolber."

False invoices?

The Paradise Papers also describe how two of Bronfman's senior executives intervened to help sort out another problem Jonathan Kolber was having in the U.S. In 2002 Claridge agreed that a $4 million US loan to the Kolber Trust would be interest free.

In the U.S., however, that debt had to be interest-bearing.

So the executives at Claridge came up with a plan. Their solution: Jonathan Kolber would get the interest payments back by invoicing Claridge a fee "for services rendered" equal exactly to the interest payments.

As one email to Kolber in the Paradise Papers states, the loan was "only in form" and not in "substance."

"Well, that's a smoking gun right there," said Rizqy, noting that kind of transaction might have broken tax laws. "Actually, it is very bold to write down."

Kolber's lawyer, William Brock, insisted that "no invoices were sent and nothing was paid."

But former Claridge executive Rick Doyle confirmed that Jonathan Kolber did indeed invoice Claridge for services. "He started charging services at a small amount," Doyle told CBC News. "We are not talking gobs of money here. He wasn't making a profit on it, he just wasn't losing money at the end of the day."

McCouch said there is a legal risk that any such side agreement between Claridge Investment and Jonathan Kolber may be viewed as "sham."

"To an observer, particularly a revenue service, it could look like evidence of fraudulent intent."

Taxes owed in Canada?

Through his lawyer, Jonathan Kolber said that when the trust was set up in 1991, it was not for tax reasons but because "new residents migrating to Israel were recommended to establish trusts" because of volatility in the Middle East.

After more than two decades of a tax-free existence in the Caymans, the Kolber Trust faced political headwinds of a different kind in 2013 when the House of Commons passed legislation, retroactive to 2007, that would tax Canadian-sourced contributions to offshore trusts.

Stephen Bronfman at the Liberal caucus
An investigation by CBC/Radio-Canada and the Toronto Star has found that Stephen Bronfman and his investment company Claridge Inc. were key players linked to a $60-million US offshore trust in the Cayman Islands. (Andrew Vaughan/Canadian Press)

In 2014, Israel also tightened its offshore trust laws, and by 2016, the Kolber Trust was shut down.

The Paradise Papers show that Jonathan Kolber, an Israeli citizen, had been worried his connection to certain investment funds held by the Kolber Trust would present a "major difficulty" with Israeli tax authorities.

Kolber and his lawyers decided to prepare a draft "settlement agreement" for Israeli tax authorities. But in so doing, they may have exposed themselves to problems back in Canada.

Kolber's disclosure to Israel includes one line that directly links the trust to Canada: "The source of the Trust's assets is the father of the Beneficiary, who is a resident of Canada," the draft settlement stated, referring to former Senator Leo Kolber.

The new tax legislation in Canada had targeted Canadian-sourced contributions to offshore trusts. So, did Kolber or any of his Canadian advisers notify the tax authorities in Ottawa about his settlement with the Israelis?

"We understand that the application was not sent to anyone in Canada," his lawyer William Brock said. He said that according to their interpretation of the tax rules, Kolber's trusts were never "liable for Canadian taxation."

Dalhousie tax professor Loomer said CRA might take a different view on the Israeli settlement, adding there's a possibility millions may be owed in Canada.

"I think the CRA would be interested to see that statement," Loomer said.

CBC News and the Toronto Star asked Prime Minister Trudeau for a comment on what he thought about Bronfman's involvement in an offshore trust in light of his position as chief fundraiser for the Liberal Party.

"Given you are referring to Mr. Bronfman's role in the Liberal Party, I would direct your questions to the party," Trudeau's spokesperson, Cameron Ahmad, said.

Liberal Party spokesperson Braeden Caley said the revenue chair is a non-voting position and that Bronfman serves on the party's national board "as a volunteer." His role, Caley said in a statement, has "consisted strictly of assisting the board on matters related to building on the Liberal movement's strong grassroots fundraising support, not policy decisions."


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PostPosted: Mon Nov 06, 2017 8:39 am    Post subject: Reply with quote

Revealed: Justin Trudeau's close adviser helped move huge sums offshore

Stephen Bronfman, who played key role in Canadian PM’s rise, was involved in complex offshore web, leaked papers show

Stephen Bronfman, the Liberal party’s chief fundraiser, and Justin Trudeau in 2013.

Ed Pilkington in New York

Sunday 5 November 2017 18.00 GMT Last modified on Monday 6 November 2017 11.37 GMT

The chief fundraiser and senior adviser to the Canadian prime minister, Justin Trudeau, who played a critical role in the rise to power of the charismatic politician, was involved in the movement of millions of dollars to offshore havens, the Paradise Papers reveal.

Stephen Bronfman, heir to the Seagram fortune, who was instrumental in Trudeau’s successful bid for the leadership of the Canadian Liberal party in 2013 and the premiership two years later, engaged through his family investment business in a complex web of entities in the US, Israel and the Cayman Islands. Multimillion-dollar cashflows between the three jurisdictions might legally have avoided taxes in the US, Canada and Israel.

The leaked documents unveil a close relationship between two wealthy families who collaborated to shift millions of dollars to the Cayman Islands. On one side were the Bronfman family, inheritors of the Seagram distillery fortune in Montreal.

On the other side was the Cayman Islands-based trust of Leo Kolber, a former Canadian senator and powerhouse within the Liberal party Trudeau now leads.

Accountants working for the families discussed the possibility of recasting interest owed by the Kolber trust to two US-based Bronfman funds as “services rendered”, on the basis that the loans were not “in substance (only in form)”. Tax experts say that such interest-free loans would generally be barred under US tax laws.

The disclosures are likely to generate political heat for the Canadian prime minister, who swept to power in October 2015 partly on his promise to tackle economic inequality and take on tax avoidance. Last year, Trudeau came under pressure in the fallout from the Panama Papers, the trove of leaked documents from the offshore law firm Mossack Fonseca, during which his family inheritance was scrutinised.

It is absolutely unacceptable that there be people not paying their fair share of taxes

Justin Trudeau

At that point Trudeau insisted his personal assets, which he put into a blind trust after he won his party’s leadership, were “completely transparent”. But he came under renewed pressure this year following a Canadian Broadcasting Corporation (CBC) investigation into a KPMG scheme to help wealthy Canadians move money to the low-tax Isle of Man.

“It is absolutely unacceptable that there be people not paying their fair share of taxes,” the Canadian prime minister said in March, pledging to do “a better job of going out and getting tax avoiders and tax frauders”.

The Paradise Papers put the spotlight once again on Trudeau’s record on tax fairness, only this time the focus falls within his inner circle. Specifically, on Bronfman, one of his closest advisers.

The two men are childhood friends who in recent years have revived their bond to assist Trudeau’s meteoric rise. Bronfman, 53, raised $2m for Trudeau’s leadership campaign and was was rewarded by being made the Liberal party’s chief fundraiser with a seat on its national executive.

Bronfman runs Claridge, the Montreal-based investment firm set up by his father, Charles Bronfman, to manage the vast wealth of the Seagram liquor empire, which came to prominence in the 1920s supplying the illicit alcohol trade during US prohibition. The distinctive Seagram Building in Manhattan, designed by Ludwig Mies van der Rohe, still stands as a monument to the family’s status.

One of Claridge’s clients was the Cayman Islands-based trust of Kolber, Stephen Bronfman’s godfather and predecessor as chief fundraiser of the Liberal party who for decades was in charge of the Bronfman family’s investments. Kolber was appointed to the Canadian senate in 1983 by Pierre Trudeau, Justin’s father, towards the end of his stint as prime minister.

The tight triangle between Kolber, Bronfman and Trudeau was on display last December when a Liberal party fundraiser, at $1,500 a ticket, was held at Kolber’s Montreal home with Bronfman as co-host and Trudeau as its prize draw.

Confidential emails contained in the Paradise Papers reveal that links between the Bronfman and Kolber businesses were so close they were almost intertwined. In 1991, a Kolber family trust was set up in the Cayman Islands and Leo Kolber’s son Jonathan named as one of its beneficiaries.

The Bronfmans helped kickstart the Kolber trust with an injection of millions of dollars of funds, the leaked files show, including a $5.3m loan made by Stephen Bronfman personally in 1997. By then the trust was flush with almost $40m in assets.

What are the Paradise Papers? – video

From the beginning, the arrangement between the two families over the repayment of the Bronfman loans was unusual. A contract tied to a Charles Bronfman loan in 1991 of almost $10m said: “The loan shall bear interest at such rate as may be determined between the parties from time to time.”

In 2002, the Kolber trust took on an $8m debt to the Israeli offshoot of the Bronfman empire, Claridge Israel – an enterprise that, in a further sign of the close ties between the two families, Jonathan Kolber had helped set up and run after he relocated from Canada to Israel in 1991.

For reasons that are unclear but do not suggest anything unlawful, the Kolber trust debt was transferred from Claridge Israel to two other Bronfman entities. The entities, Charles Bronfman Trust and Charles R Bronfman Trust, were US-based and thus liable to pay US taxes on any interest accruing, which would be treated as income.

In October 2005, Jonathan Kolber fired off an 18-page fax from his business offices in Israel about the Cayman Islands trust of which he was beneficiary. He hand-wrote on the cover sheet: “CONFIDENTIAL!!”

One of the documents in the fax was an email that was sent to him from a financial adviser. It noted that as a result of the switch of the debt from Claridge Israel, the Kolber trust had paid the US-based Bronfman trusts about $40,000 in interest charges.

The email went on to say: “As there was never supposed to be interest paid on this debt in substance (only in form), the [Kolber trust] needs to be compensated by the Bronfman trusts for these cash outlays, in some manner to be agreed upon by both parties.”

A second email from the financial adviser contained in the fax gives details of the “manner” by which the interest issue might be resolved. It records that senior Bronfman officials told Kolber that they would “‘make you whole’ somehow”.

One idea floated in the email was to get Kolber to “invoice Claridge a fee for services rendered, equal to the interest which Claridge has charged to the [Kolber trust] on these loans”. The Kolber trust would then mark on its books the sums as receivable fees instead of describing them as they really were – reimbursement of the interest payments.

Experts consulted by news organizations investigating the Paradise Papers said both the US and Canadian tax authorities viewed no-interest loans as red flags for potential tax avoidance schemes. Grayson McCouch, a tax professor at the University of Florida, told CBC that in his view the US Internal Revenue Service (IRS) would probably want to interrogate the transactions.

“If it’s done to disguise or to reverse the purported interest payments, then it could look to an observer, particularly a revenue service, like evidence of fraudulent intent,” he said.

You can’t have interest-free loans between related parties

Reuven Avi-Yonah, University of Michigan

Steven Rosenthal, a senior fellow at the Tax Policy Center, told the Guardian that under US tax law any loan greater than $10,000 that charged no or below-market interest rates would be assumed by the authorities to bear imputed interest that would bring it up to applicable federal levels. “The lender must report it as taxable income and pay taxes on it,” he said.

The head of the international tax program at the University of Michigan, Reuven Avi-Yonah, told the International Consortium of Investigative Journalists that tax laws generally barred transactions that failed to report interest. “You can’t have interest-free loans between related parties,” he said.

Jonathan Kolber stressed to CBC that he had relocated his family’s trust from the Cayman Islands to Israel a few years ago following a change in Israeli tax law. “The trust declared Israeli status and we paid back taxes and whatever they asked for,” he said.

Kolber went on to deny any wrongdoing: “I’ve never broken any laws and this was all reported and so transparent, and is now an Israeli entity. This has all been declared and above board and properly handled with full transparency.”

Stephen Bronfman and Leo Kolber declined to comment.

A lawyer representing Jonathan Kolber and Bronfman father and son denied any improper activity on their part. He said: “None of the transactions or entities at issue were effected or established to evade or even avoid taxation. My clients have always acted properly and ethically, including fully complying with all applicable laws and requirements.”

The lawyer said that the Cayman Islands trust was set up because of volatility in Israel at the time. Kolber was not liable for tax in Canada under existing law given that he no longer lived there; nor was there any tax owing in his adoptive Israel.

The lawyer confirmed that Stephen Bronfman did make a $5.3m loan to the Kolber trust in 1997, but said it was repaid within five months.

Of the proposed reimbursement of interest from the two Bronfman trusts based in the US to the Kolber trust and the suggestion that it be portrayed as “services rendered”, the lawyer said: “No invoices were sent and nothing was paid.” He added that “non-interest-bearing loans by a US person do not violate US law”.

Trudeau was contacted at his official prime ministerial residence, 24 Sussex Drive, but chose not to respond.

• This article was amended on 6 November 2017. An earlier version said Justin Trudeau was premier. This has been corrected to prime minister.


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PostPosted: Mon Nov 06, 2017 9:24 am    Post subject: Reply with quote

I hope people realize that this is almost certainly entirely legal.

Another example of persecution in the press. You would think that the example of Jiann Ghomeshi would encourage people to be a little more careful.

I have nothing against the information being available to ordinary folk. What is more objectionable is the aura of "gotcha" around it.

If you want to get to the bottom of this, you would have to understand who wrote the law (or more likely, the regulations) and what they were trying to accomplish. And those people were almost certainly civil servants. The Courts are civil servants, capiche?

Do you blame someone who takes advantage of a loophole? Or the ones who arranged the loophole?

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PostPosted: Mon Nov 06, 2017 12:56 pm    Post subject: Reply with quote

I wasn't ready to grab a pitchfork until I saw this ...

Queen invested millions in offshore tax havens, Paradise Papers show
Dominic Kennedy, Valentine Low, David Brown
November 6 2017, 9:00am,
The Times

The Queen invested millions of pounds in offshore tax havens, according to financial documents leaked after a law firm was hacked.

The former Tory treasurer Lord Ashcroft, the owners of Arsenal and Everton football clubs, the singer Bono and a senior member of Donald Trump’s administration are among those facing questions after the breach of security.

The attack was described as extremely sophisticated, allowing hackers to move within the network of Appleby, a law firm based in Bermuda, from October 2015 to May last year. More than 13 million files were released; they are being called the Paradise Papers.

The Duchy of Lancaster, the private estate that funds the Queen, put about £10 million into the Cayman Islands and Bermuda. Some went into the failed off-licence chain Threshers and a rent-to-buy business, Brighthouse, which has been accused of exploiting the poor.

The duchy obeyed the law and was not involved in decisions made by funds. There is no suggestion that the Queen knew of specific investments.

This probably puts a new light on these things.

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PostPosted: Tue Nov 07, 2017 8:26 am    Post subject: Reply with quote

EDITORIAL: One rule for Liberals, another for rest of us

Postmedia News
Postmedia News

November 6, 2017

November 7, 2017 7:21 AM EST

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EDITORIAL: One rule for Libs, another for rest


Nov. 7, 2017

Prime Minister Justin Trudeau boards a government plane in Montreal, Monday November 6, 2017. Trudeau is heading to the APEC Summit in Vietnam. THE CANADIAN PRESS/Adrian Wyld

For champions of the middle-class, Canada’s federal Liberals sure seem to have little in common with average people.

Over the weekend, a large dump of documents called the Paradise Papers revealed the top fundraiser for Prime Minister Justin Trudeau’s Liberals is listed among the thousands of names connected to offshore accounts and firms.

Stephen Bronfman, grandson of Seagrams creator Samuel Bronfman, is the current “revenue chief” for the federal Liberal party. He’s also a long-time friend of Trudeau’s.

The papers have not been made publicly available but, as The Canadian Press puts it, “according to the Toronto Star and CBC/ Radio Canada, the records suggest Stephen Bronfman and his family’s Montreal-based investment company, Claridge Inc, were linked to an offshore trust in the Cayman Islands that may have used questionable means to avoid paying millions in taxes.”

Bronfman’s representatives denied any impropriety, saying they’ve always acted in full compliance with the law.

Regardless, this story didn’t sit well with Conservative leader Andrew Scheer.

“Justin Trudeau’s well-connected Liberal friends get away with paying less and you pay more,” Scheer said. “There is nothing fair about that.”

For the past few months, we’ve watched Trudeau and his Finance Minister Bill Morneau tour the country to justify wringing more taxes from the hides of the middle-class (by eliminating tax credits) and small businesses (through new tax changes), all in the name of “fairness.”

Farmers, doctors and others rebelled. What had they been doing wrong, they asked? Why did the rules need to change?

Neither Trudeau nor Morneau ever clarified what was wrong with the status quo and from our perspective it looked and smelled like a cash grab masquerading as “fairness”.

Meanwhile, news broke the Canada Revenue Agency was considering taxing low-income workers for the discounts they receive at work on store products like clothing or food.

And then there was Morneau’s failure to place his wealth in a blind trust and a $200 fine under the Conflict of Interest Act for failing to disclose his interest in his French villa.

Now this news about Bronfman.

The trouble with all this is the distasteful double standard.

Liberals pay lip service to middle class woes, but play by a different set of rules themselves.


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PostPosted: Tue Nov 07, 2017 9:24 am    Post subject: Reply with quote

Why do you expect anything different? If it's legal, they will do it to avoid the taxes. What is shitty about it is that only some of them have the connections and the ability to use system in that way.

It's as if you expect these people to simply line up to be shorn of their wealth like sheep.

The problem is that taxes, not the people escaping taxation. The solution is to have a taxation regime that will not incentivize taking money out of the country. Because, once it starts enjoying tax-free income, money doesn't return.

Of course it makes the wagon heavier for those of us who have to push. But at least they aren't in the wagon, adding to the weight.

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PostPosted: Tue Nov 07, 2017 10:16 am    Post subject: Reply with quote

I am with Bugs on this one.

If you have the means to legally move money overseas and you do so within the confines of the Income Tax Act then while its a nice mechanism to outrage the masses it doesn't make it illegal.

When business leave Ontario for the Southern US, I don't blame the business.
In this case, I don't blame the individuals assuming all transactions were legal.
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top Liberal fundraiser named in Paradise Papers

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