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Paradise Papers Reveal Financial Data of Wealthy Elite

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http://www.cbc.ca/news/business/paradise-papers-leak-1.4387338

 

An enormous new leak of tax-haven financial records — rivalling the Panama Papers in size and scope — is laying bare some of the financial secrets of the world's elite, from the Queen to Prime Minister Justin Trudeau's chief fundraiser to U.S. President Donald Trump's commerce secretary, along with more than 120 politicians across the globe.

The 13.4 million records in what is being dubbed the Paradise Papers come largely from Appleby, one of the biggest offshore law firms on the planet, which was founded in Bermuda and has branches in tax havens around the world.

The records expose the assets and sometimes murky dealings of a host of characters, as well as the ways corporate giants like Apple, Nike and Uber avoid taxes legally through increasingly creative bookkeeping.  

The leak was obtained by German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists and a network of more than 380 journalists in 67 countries, including CBC/Radio-Canada and the Toronto Star in Canada.  

The leaked Appleby files contain the names of more than 3,000 Canadians and Canadian entities, including hundreds of companies, wealthy individuals, lawyers, accountants, and people who inherited money stashed in their family's offshore accounts in Bermuda or the Cayman Islands.

 

Paradise Papers-logo

 

 

 

 

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.

Martin, Mulroney, Chrétien

 

Former prime ministers Paul Martin and Brian Mulroney

Former prime ministers Paul Martin, left, and Brian Mulroney appear in the Paradise Papers in relation to companies that had dealings offshore. (Canadian Press)

 

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.

 

One of the webs of offshore accounts and companies in the Paradise Papers leads to Trump's commerce secretary, private equity tycoon Wilbur Ross, who has a stake in a shipping company that has received more than $68 million US in revenue since 2014 from a Russian energy company co-owned by the son-in-law of Russian President Vladimir Putin.

The revelation comes against a backdrop of growing concerns about the links between Russia and people close to Trump.

A spokesman for Ross said that the commerce secretary never met Putin's son-in-law or the Russian energy company's other owners, and that Ross recuses himself from matters that relate to international shipping and "has been generally supportive of the administration's sanctions" of Russian entities.

Paradise Papers: The scope

 

In all, the offshore ties of more than a dozen Trump advisers, cabinet members and major donors appear in the leaked data.

About half the 13.4 million Paradise Papers files come from Appleby and Bermuda-based corporate services provider Estera, which split off from Appleby late last year. The records span everything from correspondence with clients and financial statements to internal company memos, emails and database entries.

The rest of the leaked records are from another offshore services firm called Asiaciti Trust based Singapore, as well as 19 corporate registries maintained by governments in other tax-haven jurisdictions.  

In addition to disclosures about heads of state and corporations, the files reveal details about the financial lives of the rich and famous.

 

Russian billionaires

 

While having an offshore account or company is often legal, the built-in anonymity of tax havens tends also to attract money launderers, drug and arms traffickers, tax evaders and others engaged in questionable conduct, the leaked records show.

 

Russian oligarch Arkady Rotenberg

Russian billionaire Arkady Rotenberg and his brother used offshore corporations to buy jets a year before they were hit with U.S. and Canadian sanctions for their ties to Russian President Vladimir Putin. (Sergei Karpukhin/Reuters)

 

Appleby, for example, is one link in a chain of offshore actors who helped Russian oligarchs and government officials to purchase jets, yachts and other luxury items. Arkady and Boris Rotenberg, two Russian billionaires and childhood friends of President Vladimir Putin, were able to buy jets worth more than $20 million US in 2013.

 

U.S. and Canadian authorities imposed sanctions on the Rotenbergs in 2014 for their material support of Putin-backed companies and projects. Appleby cut its ties with the brothers but, in one case, received approval from the government of the Isle of Man nearly two years after sanctions were imposed to disburse fees to keep one of the brothers' companies on the business registry there.

Most common countries in the Appleby data leak

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

 

The Rotenbergs did not reply to requests for comment.

PowerPoint presentations prepared internally by an Appleby employee and other documents cite examples of other controversial or disreputable characters who made their way onto the law firm's client list, including a corrupt Pakistani official, two children of the infamous Indonesian dictator Suharto and an alleged "blood diamond" dealer.

In some cases, Appleby quickly reported its suspicions about clients' activities to authorities, as required by law. In other cases, questionable clients raised no eyebrows for years.

 

'No evidence of any wrongdoing'

Appleby did not reply to a detailed list of questions sent by the International Consortium of Investigative Journalists but released an online statement stating it had investigated the ICIJ's questions.

"We believe they are unfounded and based on a lack of understanding of the legitimate and lawful structures used in the offshore sector," the statement said.  "There is no evidence of any wrongdoing."

 

Appleby said it does not tolerate illegal behaviour and provides advice to clients "on legitimate and lawful ways to conduct their business."

 

"It is true that we are not infallible," the statement said. "Where we find that mistakes have happened, we act quickly to put things right."

 

Asiaciti did not respond to requests for comment.

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."

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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.

Paradise Papers-logo

 

 

 

 

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

(CBC)

 

 

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.

 

 

 

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."

 

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.

hi-852-cayman-islands

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.

 

Appleby-in-canada

 

 

 

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.

 

paradisepaperscountries

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 Stephen 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.

The Liberal Party spokesperson, Braeden Caley, said Bronfman serves on the party's national board "as a volunteer" and assists the party on "fundraising support, not policy decisions."

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http://www.cbc.ca/news/world/wilbur-ross-paradise-papers-icij-1.4383636

 

U.S. Commerce Secretary Wilbur L. Ross Jr. has a stake in a shipping firm that receives millions of dollars a year in revenue from a company whose key owners include Russian President Vladimir Putin's son-in-law and a Russian tycoon sanctioned by the U.S. Treasury Department as a member of Putin's inner circle.

 

Ross, a billionaire private equity investor, divested most of his business assets before joining President Donald Trump's cabinet in February, but kept a stake in the shipping firm, Navigator Holdings Ltd., which is incorporated in the Marshall Islands in the South Pacific.

Offshore entities in which Ross and other investors hold a financial stake controlled 31.5 per cent of the company in 2016, according to Navigator's latest annual report.

 

Among Navigator's largest customers, contributing over $68 million US ($87.3 million Cdn) in revenue since 2014, is the Moscow-based gas and petrochemicals company Sibur. Two of its key owners are Kirill Shamalov, who is married to Putin's youngest daughter, and Gennady Timchenko, the sanctioned oligarch whose activities in the energy sector, the Treasury Department said, were "directly linked to Putin."

'Why would any officer of the U.S. government have any relationship with a Putin crony?'- Daniel Fried, Russia expert

 

Another powerful owner is Sibur's largest shareholder, Leonid Mikhelson, who controls an energy company that was also sanctioned by the Treasury Department for propping up Putin's rule.

Ross's connections emerge from an examination of public records and a leak of millions of offshore financial documents from the Bermuda law firm Appleby obtained by German newspaper Sueddeutsche Zeitung. They were shared with the International Consortium of Investigative Journalists and its global network of media partners.

They represent the inner workings of Appleby from the 1950s until 2016. The files include documents from Appleby's corporate services division, which became independent in 2016 under the name Estera.

Paradise Papers-logo

 

 

 

The leaked files showed a chain of companies and partnerships in the Cayman Islands through which Ross has retained his financial stake in Navigator.

 

As commerce secretary, Ross has a direct authority over trade and manufacturing policy and is an influential voice in the government on virtually any aspect of the U.S. economic relationship with other countries, including Russia. In recent years, tensions between the United States and Russia have escalated, with the U.S. imposing sanctions against Russia after its 2014 invasion of Crimea and interference in the 2016 presidential election. 

 

In the aftermath of the election, investigations by Congress and the U.S. Department of Justice have explored potential business ties between Russia and members of Trump's administration.

History of financing oligarchs

While several of Trump's campaign and business associates have come under scrutiny, until now no business connections have been reported between senior Trump administration officials and members of Putin's family or inner circle.

 

During his confirmation process, Ross was asked repeatedly about his business ties to Russia, mostly related to his former role as vice-chairman of the Bank of Cyprus, which has a long history of financing Russian oligarchs.

"The United States Senate and the American public deserve to know the full extent of your connections with Russia and your knowledge of any ties between the Trump Administration, Trump Campaign, or Trump Organization and the Bank of Cyprus," a group of five Democratic senators wrote Ross after the hearing but prior to his confirmation.

Navigator Triton gas transportation vessel

Ross was once chairman of Navigator Holdings Ltd., which connects him to Russian President Vladimir Putin's son-in-law and a Russian tycoon who was subject to sanctions by the U.S. (Navigator Gas)

Ross responded briefly to a question submitted for the hearing, saying the Russians who invested in the bank "were not my partners," but didn't respond to the senators' letter.

 

He was also asked about his shipping holdings and whether they could pose a conflict of interest with his duties at Commerce. But he faced no questions about Navigator — where he once was chairman of the board — and its relationship with Sibur.

 

Sibur is "a company with crony connections," said Daniel Fried, a Russia expert who served in senior State Department posts in both Republican and Democratic administrations. "Why would any officer of the U.S. government have any relationship with a Putin crony?"

Paradise Papers: The scope

(CBC)

Ross joined the board only after Navigator began dealing with Sibur and "never met" Shamalov, Timchenko or Mikhelson, said James Rockas, a spokesman for the Commerce Department.

"Secretary Ross recuses himself from any matters focused on transoceanic shipping vessels, but has been generally supportive of the administration's sanctions of Russian and Venezuelan entities," Rockas said.

 

Another of Navigator's major customers is PDVSA, the Venezuelan state oil company owned by the authoritarian regime of Nicolas Maduro. The Trump Administration sanctioned one current and one former executive at PDVSA in July 2017, and sanctioned the company itself the next month.

 

 

Commerce and conflict

 

The fact that Ross's Cayman Islands companies benefit from a firm controlled by Putin proxies raises serious potential conflicts of interest, experts say.

As commerce secretary, Ross has the power to influence U.S. trade, sanctions and other policies that could affect Sibur's owners. Likewise, Sibur's owners — and through them, Putin himself — could increase or decrease Sibur's business with Navigator even as Ross helps steer U.S. policy.

Trump and Ross

Donald Trump, left, and Ross pose for a photo after meeting at Trump International Golf Club last November in Bedminster, N.J. Ross was a titan in the world of private equity. (Drew Angerer/Getty Images)

Richard Painter, who served as chief ethics lawyer during the George W. Bush administration, said Ross might have to recuse himself from a range of sanctions decisions. He added that while there was no inherent violation in Ross's holdings, the Navigator arrangement warrants closer scrutiny.

"Apart from those legal issues, I'd be very concerned that someone in the U.S. government was making money from dealing with the Russians, and I'd want to know the facts," Painter said.

Commerce spokesman Rockas said that Ross "has never had to seek, nor received, any ethics exemption" and abides by the "highest ethical standards." Ethics exemptions are granted to allow officials to participate in issues where there might be a conflict of interest.

 

 

 

 

 

20% of profits

Before joining Trump's cabinet, the 79-year-old Ross was a titan in the world of private equity, rounding up investors from around the world to put money into troubled companies in the hope of profitably turning them around.

When all went well, he and his firm made money not only on their investments and management fees, but also from a compensation system that allows the general partners, who manage private equity funds, to earn 20 per cent of any profits that exceed a certain level, according to Ross's pre-appointment financial disclosures.

 

'The disclosure requirements weren't written with Wilbur Ross in mind.'- Kathleen Clark, law professor

Many of the private equity funds involved in these investments were created and administered by Appleby. The leaked files offer a window into how Appleby helped his firm, WL Ross & Co, reap the benefits of offshore havens such as the Cayman Islands, a British territory that permits extraordinary levels of financial secrecy and allows paper companies run from New York and elsewhere to operate there tax-free. In 2015, the Cayman Islands was ranked fifth by the Financial Secrecy Index in its worldwide ratings.

 

 

 

 

The complexity of the offshore structures adds legal and reputational distance and obscures the full extent of Ross's business relationships even as it allows him to profit from them, according to tax and ethics experts consulted by ICIJ.

 

 

"The disclosure requirements weren't written with Wilbur Ross in mind," said Kathleen Clark, a law professor at Washington University who is an expert on government ethics, "and I don't think adequately provide the public or a government ethics official with an understanding of the wide variety of financial interests that he has."

Yale, Harvard

The son of a lawyer-turned-judge and a school teacher, Ross was raised in suburban New Jersey, and graduated from Yale and Harvard Business School.

In the late 1970s, he joined the British investment banking firm Rothschild Group, eventually rising to lead the firm's bankruptcy advisory practice. He met Donald Trump in 1990, when the future president's Taj Mahal casino in Atlantic City was experiencing financial trouble, and Ross represented a group of bondholders. 

Wilbur Ross

Ross divested most of his business assets before joining Trump's cabinet in February but kept a stake in Navigator. (Drew Angerer/Getty Images)

 

Ross engineered a deal that preserved a stake in the company for Trump, reportedly telling disgruntled bondholders that the Trump name was "still very much an asset." It was a welcome assist for the future president.

Over the years, Ross has climbed to the ranks of the wealthiest U.S. individuals, with a fortune estimated by Forbes in September 2017 at $2.5 billion. He and his wife own a Palm Beach, Fla., villa down the road from Trump's Mar-a-Lago resort, another house in Southampton, N.Y., and a third home in Manhattan. 

They also own an art collection with a value that Bloomberg has estimated at $250 million, including a collection of the surrealist painter Rene Magritte valued at $100 million.

Grand Swipe

Ross was also leader — known as the Grand Swipe — of a secret Wall Street fraternity called Kappa Beta Phi and in 2012 presided over an annual ceremony in which initiates performed song-and-dance routines in drag during a feast of lamb and foie gras at a Manhattan hotel, according to a New York Magazine report.

Ross has dismissed the idea that the very wealthiest have unfair advantages, arguing in 2014 that "the one per cent is being picked on for political reasons." He added: "Education is the way that people get out of the ghetto and into, if not the one per cent, something close to it."

According to Appleby records, Ross is a shareholder and was a director of two companies established in July 2011 as general partners to control two other WL Ross & Co entities that invested in the shipping industry, which, in turn, control two WL Ross Group funds. These funds invested in several shipping companies, including Navigator, according to SEC filings and Ross' ethics disclosures.

paradisepaperscountries

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

 

In all, Ross's former firm, WL Ross & Co., is Navigator's largest shareholder, owning 39.4 per cent of Navigator through companies it controls. When he became commerce secretary, Ross kept his personal financial interest in some of the WL Ross entities but resigned from managing them. The ones he kept a stake in, which also include other investors, own a substantial part of the larger stake with 31.5 per cent of the shipping company's stock.

Federal ethics law requires officials to recuse themselves from matters that would have "a direct and predictable" effect on the official's or a family member's financial interest or if the official has a close relationship that might cause a reasonable person to doubt the official's impartiality. 

 

During his confirmation hearings, Ross sought to reassure senators that he would avoid any conflicts of interest between his business holdings and his cabinet post.

"I intend to be quite scrupulous about recusal and any topic where there is the slightest scintilla of doubt," he said.

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1 minute ago, Jimmy McGill said:

newsflash, rich people know how to hide money! i'm shocked. 

Ya just ask our finance Minister. 

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1 minute ago, RRypien37 said:

This was leaked back in 2015.

 

Old news. 

Those were the "Panama Papers" these are the "Paradise Papers".

 

A whole new group of people are ensnared in these revelations.

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6 minutes ago, nuckin_futz said:

Those were the "Panama Papers" these are the "Paradise Papers".

 

A whole new group of people are ensnared in these revelations.

Same shlt, different toilet. 

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Just now, darinbadershouldamadeit said:

 Grow some balls, use your ideas, and go out and make your own millions. Stop whinging about other people making and keeping their money...

Real talk. 

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28 minutes ago, 189lb enforcers? said:

Tax them so that lazy people can have a decent standard of living.

 

 

1 hour ago, Jimmy McGill said:

newsflash, rich people know how to hide money! i'm shocked. 

 

13 minutes ago, RRypien37 said:

Same shlt, different toilet. 

 

9 minutes ago, darinbadershouldamadeit said:

 Grow some balls, use your ideas, and go out and make your own millions. Stop whinging about other people making and keeping their money...

Amazed at these reactions. Egoistic individuals Illegally screwing over millions of regular taxpayers on a massive scale causes a slight shrug? Practice decency and solidarity much?

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12 minutes ago, joe-max said:

 

 

 

Amazed at these reactions. Egoistic individuals Illegally screwing over millions of regular taxpayers on a massive scale causes a slight shrug? Practice decency and solidarity much?

Probably what their Mom's and Dad's tell them around the kitchen table in their house in Kits or West Van, it's the Go'ments and poor people's fault you have a BMW and not a Ferrari.

Edited by canuckster19

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25 minutes ago, joe-max said:

 

 

 

Amazed at these reactions. Egoistic individuals Illegally screwing over millions of regular taxpayers on a massive scale causes a slight shrug? Practice decency and solidarity much?

I am sorry that you have no confidence in your abilities.

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28 minutes ago, joe-max said:

 

 

 

Amazed at these reactions. Egoistic individuals Illegally screwing over millions of regular taxpayers on a massive scale causes a slight shrug? Practice decency and solidarity much?

solidarity? with who?

 

I'm not going to get outraged over the way the world has always been. Tell me something new. 

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14 minutes ago, darinbadershouldamadeit said:

I am sorry that you have no confidence in your abilities.

This doesn't even make sense. I agree one should work hard and try their best and make it on their own however this is not what the story is about.

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16 minutes ago, darinbadershouldamadeit said:

I am sorry that you have no confidence in your abilities.

:lol: You must be either very young or very blinkered.

 

11 minutes ago, Jimmy McGill said:

solidarity? with who?

 

I'm not going to get outraged over the way the world has always been. Tell me something new. 

I feel it myself. The older you get, the easier it becomes to succumb to cynicism. Still I try not to give in too easily.

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2 minutes ago, joe-max said:

 

I feel it myself. The older you get, the easier it becomes to succumb to cynicism. Still I try not to give in too easily.

I guess I just care more about what I can have an effect on, this kind of stuff began in ancient Rome. 

 

I'd love to see donations taken out of politics completely and have it all be a per-vote subsidy. We pay for it anyway in tax deductions, at least a per-vote subsidy is fair. So I'll vote for whoever comes forward with something like that. 

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14 minutes ago, Jimmy McGill said:

I guess I just care more about what I can have an effect on, this kind of stuff began in ancient Rome. 

 

I'd love to see donations taken out of politics completely and have it all be a per-vote subsidy. We pay for it anyway in tax deductions, at least a per-vote subsidy is fair. So I'll vote for whoever comes forward with something like that. 

:lol: ya that's fair... My tax dollars go to a party I don't support. One of those parties that I hate and receive the funding is a separatist party in Quebec who's only purpose is to break up this Country. I'm glad to see you like to see your tax dollars go to separatists.

Edited by Ryan Strome
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3 hours ago, darinbadershouldamadeit said:

 Grow some balls, use your ideas, and go out and make your own millions. Stop whinging about other people making and keeping their money...

Who is whining here?

 

Just posting this because it's amusing to see so many elected officials that want your tax money...hiding theirs to avoid paying taxes.

 

If you really want to get ahead screw making millions.  Run for office

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