Stephen Bronfman denies link to offshore trust, but documents show it helped expand family business - Action News
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Stephen Bronfman denies link to offshore trust, but documents show it helped expand family business

Liberal fundraiser Stephen Bronfman, under fire for his ties to an offshore trust in the Cayman Islands exposed in the Paradise Papers, insisted Monday that he "has never funded nor used offshore trusts." But documents point to close business ties between his investment company Claridge and the Cayman Islands-based Kolber Trust.
The Liberal Party of Canada's chief fundraiser, Stephen Bronfman, said he had no direct or indirect involvement with a Cayman Islands trust, but the Paradise Papers reveal his investment firm, Claridge had close business ties with it. (Andrew Vaughan/Canadian Press)

Liberal fundraiserStephen Bronfman,under fire for his ties to an offshore trust in the Cayman Islands exposed in the Paradise Papers,insisted Monday that he "has never funded nor used offshore trusts."

But his statement made no mention of his Montreal-based investmentcompanyClaridgeInc., which, documents show, had close business ties with the Cayman Islands-based KolberTrust.

In his response to the leak of tax haven records, Bronfman said he had no "direct or indirect involvement" with the trust other than an arm's length loan made "over a quarter century ago" that was repaid five months later.

In fact, the Paradise Papers show thatClaridgehelped set up the trust as part of an expansion of the Bronfmanfamily's investments in Israel in the 1990s and 2000s.

The leaked documents show that the Bronfmanfamily would loan millions of dollars to the trust that would then be used to purchase investments in Israel.

The documents, released Sunday, are part of a trove of 13.4 million files from two law and financial services firms specializing inoffshore business as well as 19 corporate registries from jurisdictions frequently used as tax havens. They include correspondence, internal memos andfinancial statements and were leaked to the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists and media around the world, including CBC/Radio-Canada and the Toronto Star in Canada.

Bronfman is the executive chairman of Claridge, which, according to its website, "represents the interest of the Stephen Bronfman family."

Bronfman, the site says, "spent more than 20 years guiding the firm's investment strategy."

In 1991,Leo Kolber, chairman of Claridge at the time,set up the KolberTrust, which had a dual purpose: to invest in Israel with the Bronfmansin a tax-advantageous wayand to benefit Kolber'stwo children, including his son Jonathan, who went to Israel to work for the Bronfmans.

"He moved to Israel to oversee and manage the Israeli investments of the Charles Bronfmanfamily and co-invest with them," WilliamBrock, the lawyer for Jonathan Kolber and Stephen Bronfman,told CBC and the Toronto Star in a letter.

"The economic interests of Jonathan Kolber and the Bronfman family were aligned."

(CBC)

Jonathan Kolber was co-founder and CEO of Claridge Israel from 1986 to 1997, according to his own website. He kept working for the Bronfmans for nearly a decade after that.

The leaked documents in the Paradise Papers reveal that for "every dollar"invested by the Bronfmans in Israel, Jonathan Kolber's "reward" was a 15 per cent share paid through the Kolber Trust.

The leak also contains dozens of references to Claridge advisers corresponding with the Kolber Trust on a variety of issues, including loans from the Bronfman family andfinancial investmentsand sometimes providing tax advice to the trust's beneficiaries.

Leo Kolber set up a trust in the Cayman Islands, a known tax haven, in 1991 to benefit his children and help expand the Bronfman family's interests in Israel. (Fred Chartrand/Canadian Press)

One document shows Claridge Israel loaned $6 million USto the Kolber Trust in 2006.

Another document appears to showtwo senior Claridge executives suggesting Jonathan Kolber write an invoice "for services rendered"as a way to get reimbursed for interest charged on a Bronfman loan.

The trust was shut down in 2016.

Bronfman declined numerous requests for an interview with the CBC, but in his statement Monday, he said he and his family "have always conducted themselves in accordance with the highest legal and ethical standards."


Read Stephen Bronfman's full statement:

StephenBronfmanis a proud Canadian and has always fully complied with all legal requirements, including with respect to taxes.

StephenBronfmanhas never funded nor used offshore trusts. His Canadian trusts have paid all taxes on all their income to the Canadian government.

StephenBronfmanstates that the single loan made over a quarter century ago to the Kolber Trust was repaid fivemonths later and was on an arm's length, fully commercial basis, in full compliance with all legal requirements, including with respect to taxes.

StephenBronfmanhad no other direct or indirect involvement whatsoever in the Kolber Trust.

StephenBronfmanand his family have always conducted themselves in accordance with the highest legal and ethical standards.

StephenBronfmanwill not make any further comment.