23 May 2009

Cash in Envelopes

We are living through yet another episode of a fascinating tale of political intrigue in Canada these days. A royal commission is looking into the relationship between ex-Prime Minister Brian Mulroney and Karlheinz Schreiber, a German-Canadian businessman, to see if there are any links between the latter's payment of either $225,000 or $300,000 (depending on who you might believe) in cash to the former and the so-called Airbus Affair (allegations of bribery in the sale of Airbus planes to Air Canada).

I can't help wondering how anyone could accept that accepting thousands of dollars in cash in envelopes in hotel rooms would not be a little suspicious. According to Mr. Mulroney's testimony, that would be an 'error in judgement'. I'll say. Leaving aside what these payments might have bought, let's look at what was done with the cash.

Put into one or more safes and not touched for years. Hmmm. I guess there's no way to prove or disprove that. Years later, he used a part of the tax rules to declare the income and negotiate to pay taxes on part of it. I won't join in any chorus denouncing this as special treatment, as this clause is available to anyone who wants to voluntarily come forward and declare income that they neglected to declare when they should have, and it often results in paying taxes on a part of that money only, which is better than the government's never getting any of that tax money. But don't we all wish we had forgotten to declare hundreds of thousands of dollars?

What about Mr. Mulroney's obligations as a member of the Bar of Québec? If these payments were indeed some kind of retainer for services to be rendered, the Bar has some very specific rules about what you do with the payment, and this does not include putting cash into a safe or safes somewhere. Considering that the Bar regularly sanctions, often with disbarment, its members who fail to deposit advances of amounts as little as $500 in their trust accounts, or who use those amounts for their own purposes before they have properly billed the amounts after having done the work. Lots of decisions about disbarment for various periods of time for this offence here.

So is a safe an appropriate trust account? Just asking.

I am so glad that we taxpayers have had to compensate him over $2 million after his lawsuit for defamation (where he did not disclose anything about the cash, but was not specifically asked about it) and now we are covering another $2 million in his legal expenses for this royal commission. And still he paid taxes on only half of the cash received in envelopes in hotel rooms.

Someone got their money's worth out of all this.


Anonymous said...

ooooooo a money in envelopes scandal I LOVE these! Tell me there were prostitutes too? Were they CUTE?

Ken Monteith said...

Alas, no sex trade workers involved...so far as we know now!