Tuesday, March 15, 2005

Paul Desmarais and corruption from Canada

The link in the title and this column by our friend Mark Steyn trace the sordid relationships of Paul Desmarais, head of the Canadian company Power Corp., which is a power player in both Canadian politics and the UN's Oil-for-Fraud scheme that enriched Saddam Hussein. A diagram of Power Corp.'s connections is here, along with the observation that one of Power Corp.'s former presidents is the architect of the Kyoto Protocol. Kyoto exempts developing economies from its strict pollution controls, and Power Corp. has sizeable investments in China.

Here are some of Power Corp.'s more notable UN-related ties:

[UN Oil-for-Food Program lead investigator Paul] Volcker, a former Federal Reserve chairman, is a member of Power Corp.’s international advisory board--and a close friend and personal adviser to Power’s owner, Paul Desmarais Sr. [A] U.S. congressional investigation into the UN scandal discovered that Power Corp. had extensive connections to BNP Paribas, a French bank that had been handpicked by the UN in 1996 to broker the Oil-for-Food program. In fact, Power actually once owned a stake in Paribas through its subsidiary, Pargesa Holding SA. The bank also purchased a stake in Power Corp. in the mid-seventies and, as recently as 2003, BNP Paribas had a 14.7 per cent equity and 21.3 per cent voting stake in Pargesa, company records show. John Rae, a director and former executive at Power (brother of former Ontario premier Bob Rae), was president and a director of the Paribas Bank of Canada until 2000. And Power Corp. director Michel François-Poncet, who was, in 2001, the vice-chairman of Pargesa, also sat on Paribas’s board, though he died Feb. 10, at the age of 70. A former chair of Paribas’s management board, André Levy-Lang, is currently a member of Power’s international advisory council. And Amaury-Daniel de Seze, a member of BNP Paribas’s executive council, also sat on Pargesa’s administrative council in 2002.

Of course, the only news channel in the US that mentioned Power Corp.'s connection to Volcker was FoxNews:

the Fox News story wasn’t prompted by an announcement from Power of some billion-dollar takeover or the appointment of a new senior executive. It was something altogether different: the revelation that the man handpicked by the UN secretary general last April to probe the UN’s scandalized Oil-for-Food program, Paul Volcker, had not disclosed to the UN that he was a paid adviser to Power Corp., a story which had originally been broken by a small, independent Toronto newspaper, the Canada Free Press. Why did the highest-rated cable channel in the U.S. care? Because the more that Americans came to know about Oil-for-Food, which has been called the largest corruption scandal in history, the more the name of this little-known Montreal firm kept popping up. And the more links that seemed to emerge between Power Corp. and individuals or organizations involved in the Oil-for-Food scandal, the more Fox News and other news outlets sniffing around this story began to ask questions about who, exactly, this Power Corp. is. And, they wanted to know, what, if anything, did Power have to do with a scandal in which companies around the world took bribes to help a murderous dictator scam billions of dollars in humanitarian aid out of the UN while his people suffered and starved?

As Steyn notes, Desmarais is such a major power broker in Canada, he has intimate contacts with the past four Canadian PMs:

Most Canadians don’t know Paul Desmarais at all. You could stop the first thousand people walking down Yonge Street and I’ll bet no one would know who he is. But the few who do know him know him as the kingmaker behind [Pierre] Trudeau, [Brian] Mulroney, [Jean] Chrétien and [Paul] Martin. Jean Chrétien’s daughter is married to Paul Desmarais’s son. Paul Martin was an employee of M. Desmarais’s Power Corp., and his Canada Steamship Lines was originally a subsidiary of Power Corp. that M. Desmarais put Mr. Martin in charge of. In other words, Paul Martin’s public identity--successful self-made businessman, not just a career pol, knows how to meet payroll, etc.--is entirely derived from the patronage of M. Desmarais.

That in itself is a remarkable achievement. Imagine if Jenna Bush married the chairman of Halliburton’s son, and then George W. Bush was succeeded by a president who’d been an employee of Halliburton: Michael Moore’s next documentary would be buried under wall-to-wall Oscars and Palmes d’Or. But M. Desmarais has managed to turn Ottawa into a company town without anyone being aware of the company.

But this gets worse, as Steyn shows:

During the Iraq war, for example, I mentioned en passant that Power Corp. is the biggest shareholder in TotalFinaElf, the western corporation closest to Saddam Hussein (it has since changed its name to the Total Group). Total had secured development rights to 25 per cent of Iraq’s oil reserves, a transformative deal that would catapult the company from a second-rank player into the big leagues with Exxon and British Petroleum. For a year, the antiwar crowd had told us it was “all about oil”--that the only reason Iraq was being “liberated” was so Bush, Cheney, Halliburton and the rest of the gang could annex in perpetuity the second biggest oil reserves in the world. But, if it was all about oil, then the fact--fact--is that the only Western leader with a direct stake in the issue was not the Texas oilpatch stooge in Washington, but Jean Chrétien: his daughter, his son-in-law and his grandchildren stood to be massively enriched by the Total-Saddam agreement. It depended on two factors: Saddam remaining in power, and the feeble UN sanctions being either weakened into meaninglessness or quietly dropped. M. Chrétien may have refused to join the Iraq war on “principle,” but fortunately his principles happened to coincide with the business interests of both TotalFinaElf and the Baath party.

And yet, no one knows Desmarais like they know Bill Gates or Steve Jobs. Why? Low profile. Have you ever heard of Cargill, Continental (not the airline), Koch Industries or the Marmon Group? Those are four enormous US companies that fly under the public's general radar because they're all privately held by limelight-avoiding people, like Power Corp.

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