Trudeau's Chief Fundraiser Linked to Cayman Islands Tax Scheme
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.