‘Paradise Papers’ expose names of Canadians linked to offshore data leaks

TORONTO – A massive cache of private financial data leaked to the German media exposes the private offshore dealings of Canadians, which could spark a public scandal after their alleged involvement in cash-for-access donations…

‘Paradise Papers’ expose names of Canadians linked to offshore data leaks

TORONTO – A massive cache of private financial data leaked to the German media exposes the private offshore dealings of Canadians, which could spark a public scandal after their alleged involvement in cash-for-access donations to the country’s governing Conservative party.

The database, dubbed “Paradise Papers,” details financial relationships between 382 people and companies who live or have business interests in Canada. It includes billionaire financier Jacob Frenkel, former athlete and Olympic volleyball star Roxanne Quirke Hill and family members of billionaire Louis-Hippolyte Lafontaine, a.k.a. the porn king behind the Montreal porn web site “Cocaine Bard.”

Still unknown is the financial, legal or medical status of the data. It has been seized by German tax authorities and is being analyzed by staff from two agencies.

Among the Montrealers named in the Toronto Star’s coverage is a real estate developer who has been under RCMP investigation for allegedly making racist and sexist remarks to a woman. Former provincial Liberal leader Paul Martin Jr. was accused of influence peddling. Others are suspected of wrongdoing in ways that range from illegal money laundering to overstating their incomes to secure tax-planning benefits.

As is common with the vast majority of leaked financial information, the Canadian papers have not revealed individuals’ names.

Still unknown is the financial, legal or medical status of the data. It has been seized by German tax authorities and is being analyzed by staff from two agencies.

Experts say these questions would be answered once the data has been presented to Canadian authorities, and they note the laws that govern this information are complicated and opaque.

Canada has been under pressure from the U.S. and the UK to crack down on tax avoidance. The U.S. Treasury Department in 2016 concluded that companies with a net worth of $1 billion or more should have their foreign profit reported in the U.S. tax system. It said so-called “tax-driven” companies that shift profits overseas should be “should be “weakened” by having them taxed on the basis of where profits are “unlikely to be realized.”

Canadian financial firms were already under pressure to change their behavior. In January 2017, Canada’s Senate finance committee concluded that global “theft of intellectual property” by multinationals was a real and pressing concern, as well as tax evasion and the use of intermediary structures to hide profits.

“It’s good we have these vehicles to pursue these types of transgressions,” said Neil Reynolds, a tax and financial services lawyer with Osler Hoskin & Harcourt LLP in Toronto. “But we would need to redouble our efforts to ensure this process is not abused.”

The documents’ comprehensive nature means that only a select group of officials, the experts say, will be able to work through them. In February, Canadian tax authorities raided the Toronto home of Brookfield Asset Management CEO Bruce Flatt and the Toronto offices of KPMG. The search was focused on a report by the Canadian Centre for Policy Alternatives on the use of conduits.

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