Follow the ... money? Now there's an idea: Liveblogging the Oliphant forensic accountant's report - Macleans.ca

Follow the … money? Now there’s an idea: Liveblogging the Oliphant forensic accountant’s report

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You might remember today’s witness — Navigant Consulting associate Steve Whitla — from such commissions of inquiry as, well, Gomery, which is pretty much the standard by which such adventures in forensic accounting are, and will continue to be measured. Of course, in that instance, there were a lot more breadcrumbs strewn on the path — but ITQ still holds out hope that Whitla’s report to the inquiry will at least give us some indication of whether there are dots to connect between the Bear Head “success fees” that have so gobsmacked the judge, stubbornly still-mysterious Swiss bank accounts and – of course – the cash-stuffed envelopes that the former prime minister has admitted to accepting from Karlheinz Schreiber. That, or at least dazzle us with graphics and flowcharts of Escherian beauty and complexity. We’re easy to please, really.

9:00:54 AM
Oh my goodness, Oliphaniacs: It’s PowerPoint Day at Old City Hall! Or at least it *will* be in approximately half an hour; on the wallscreen that last hosted the avuncular virtual image of Elmer MacKay is a slide that reads:

Oliphant Commission of Inquiry
May 6, 2009
Navigant Consulting

We don’t know what the *next* slide will say, mind you, but I can report that this one is framed in a very accountable navy blue with enticingly red lettering on an impartial white inset frame. We’re not sure if they’ll be handing out copies of the report itself before – or at the beginning of – Whitla’s presentation, but I’m sure it’ll go up on the website soon after he begins testifying, so you should totally be able to follow the bouncing bankroll along with ITQ.

9:16:22 AM

Okay, maybe I was being a bit too vicariously ambitious on the part of the inquiry communications team — who, if I haven’t said it enough already, have gone above and beyond the call of duty to fulfill our constant and capricious demands — since the report is, apparently, on the hefty side, as tomes go; the executive summary alone is nearly two inches thick. In that case, we may have to wait a bit longer for the eventual PDF, but I promise to do my best not to get all of you hopelessly lost.

9:25:31 AM
And – all rise! Hey, there’s Whitla, who snuck up to the witness stand unobserved by the ordinarily all-seeing ITQ eye, but before he gets started, Wolson has a few remarks to put on the record.

Ooh, this might be interesting: He wants to remind the judge of the three memos related to “the birds”, which goes to the source of funds.

First, there is no evidence that Mulroney knew the *source* of the funds, nor does counsel assert that the payments were for anything other than — and then he slips, and says the A-word That Must Not Be Spoken, but corrects it to “not Airbus”. Other than that, the judge will have to be informed by the evidence when he writes the report.

Um. Wow. Way to get us off to an intriguing start.

9:34:17 AM
Roitenberg begins the main examination – see, I know the right terms now! I’m learning so much at Oliphant Inquiry Law School, really – by getting Whitla to give a quick rundown of his background – chartered accountant, specialist designation in investigative and forensic accounting, did his time at Gomery, etc – as we all fidget impatiently waiting for the presentation to begin.

So, anyone recall if the commission counsel gave a similar speech before the Gomery forensic report was submitted to the court? I’m curious as to whether this is unusual.

9:37:35 AM
Okay, here we go – Roitenberg gets Whitla to explain what, exactly, Navigant was asked to do for the Oliphant inquiry, and at that point, the report is officially tabled as an exhibit, which means we should be able to get copies in the media encampment soon. In response to a question from Roitenberg, Whitla notes that he was “greatly limited” by the lack of bank documents, as well as material obtained from the Swiss and German authorities, which weren’t available, and – oh, there’s the first slide. And – wow, it’s pretty much illegible from where we’re sitting, although I can report that there are four columns, and lots of dollar signs.

9:44:07 AM
Okay, after a bit of legal housekeeping – Oliphant has to rule that Whitla is a qualified expert in forensic accounting – he – Whitla, that is, gives an overview of the slide, which apparently everyone but the media has up on their respective screens; we’re still squinting at the wall. Whitla says they had a complete statement for the Briton account, as well as statements for the Frankfurt account — which received deposits of over $4 million, but had supporting documents of only $350,000. Well, that’s a bit of a gap, isn’t it? According to Whitla, they could see the deposits from the bank statements, but not *what* went in, or why.

More accounts, more discrepencies – some of these accounts are numbered, not named, and – oh, thank goodness for Richard Wolson, who just came back with two much-needed copies of the presentation for the media. Not to be outdone, Roitenberg then interrupts his questioning to warn the judge that some reporters are having trouble seeing the screen, and the judge assures him that he wants to make sure we *all* enjoy “death by PowerPoint”.

Then we’re off to a new slide — this one, showing the alleged flow of $300,000 from the Britan account to Schreiber, who withdrew it in case – and then a timeline, which refers to a withdrawl from the Frankfurt account in May 1993, and – you guys, this is *really* confusing.

9:56:32 AM
This, on the other hand, isn’t – the subtitle of an upcoming series of slides: “Basis for opinion that inference can be drawn that FRANKFURT Funds used to Fund the Transfer to BRITAN came from Airbus”.

10:00:26 AM
Okay, I admit I’ve been flipping through the presentation while Roitenberg has been guiding him through it, slide by slide, but he seems to have gotten to the gist, as it were – the timeline that crossreferences cash withdrawls by Schreiber with “certain alleged meetings” between he and Mulroney between June 3, 1993 and December 14th, 1994; Whitla stresses that since these were, of course, in cash, there is no documentary evidence that connects the money with the payments — note: no *documentary* evidence. Eventually, in December 1994, the original Britan account was closed, and $212,000 was transferred to a *new* Britan account.

The analysis of the facts supports a strong interference that the money that funded the Britan account came from Airbus, Whitla says. I — think that’s the story here, yes?

10:14:36 AM
Whitlaw goes into more detail on the difficulty of tracing the deposits, the withdrawals — pretty much everything, which isn’t really a surprise; the two IAL accounts were particularly light on documentation, with just one page of statements for each, despite deposits of, in one case, over $21 million. Apparently, some of the statements came from Schreiber’s submission to the inquiry, others were produced by the government, although there were also many documents that *haven’t* yet been released by the Swiss authorities. Oh, the Swiss. So cautious.

10:21:26 AM
Hey, there’s Bitucan, and that $610,000 transfer in 1988 that may or may not have been paid out in “success fees”, with another $100,000 from the Canadian account. Roitenberg is doing his best, but this is incredibly tricky to follow, I have to admit – and apologize.

10:22:41 AM
Over to page 14 of the presentation, which shows a timeline of the Frankfurt account with “three distinct time periods” between October 1988 and December 1993, we’re now going to look at the *last* time period – March 13, 1992 to July 28, 1993, which ended with a $500,000 transfer to the Britan account after a series of seven “significant deposits”, all of which were close to 25% of deposits made to a New York account, which tallies what Schreiber had claimed was his usual practice.

Roitenberg speaks for all of us when he reminds Whitla that he has to keep in mind that the rest of us – or at least some of the rest of us – are baffled by numbers, and asks him to give some context; basically, I think he is saying that the pattern of transfers backs up what Schreiber has said, at least as far as depositing a percentage of funds in a “subaccount”.

Roitenberg notes that there was a “rather large” sum of money flowing through the .4 account – over $21 million – and asks if there were any other accounts that took in that much money; there were not. There were also no other accounts that dealt in US dollars, which Whitla says was significant, as that was the currency in which the Airbus payments were reportedly made.

10:35:40 AM
Whitla takes us step by step through a deposit made in August 25, 1992, to show how the percentage worked, and points to the May 13, 1993 payment that demonstrates the money was going from .4 to Frankfurt — there’s no direct documentation of a transfer, but it was an exchange of US dollars into Canadian funds for exactly the expected percentage.

10:38:20 AM
In a nutshell, Roitenberg inveigles Whitla, can he summarize the flow of funds related to the $300,000 cash withdrawals from Britan, and — oooh, a seriously pretty flowchart, and yes, I’ll try to figure out how to upload it as soon as my head stops spinning. Anyway, the money goes from Airbus to an Unknown Account Holder to IAL the first to Frankfurt to Britan to Schreiber’s pocket. Aroitenberg again gets Whitla to confirm that there is *no evidence* that the recipient of those funds – Mr. Mulroney, or anyone else – would have been able to know the original source of the money. With cash withdrawals, it’s just not possible. There are also many, many funds that can’t be traced – cash withdrawals with no record of the ultimate receipient – totalling nearly $10 million.

Was there any evidence of any payments to Mulroney? None of the banking records showed that he was the recipient of the funds, Whitla says.

And — morning break? Before we’re let out for recess, the judge wants to know if Whitla is saying that it is “reasonable to conclude” that the money received by Mulroney from Schreiber came from Airbus – yes, it is – but nothing to confirm that he *knew* that, which Whitla also confirms.

Roitenberg points out that actually, there’s no definitive way to document that the money that came from Britan was the same that went to Mulroney, and – okay, yeah.

Breaktime! See you in fifteen minutes!

10:55:20 AM
Two quick notes, just to make sure these salient points weren’t lost in translation — liveblogging accountants reading flowcharts is *hard*! Let’s go shopping! — the documentation trails off when the money turns into cash, and the Swiss haven’t turned over some of the information requested by the commission. Also, there is a lot of money that has gone missing, and Schreiber is grinning like a flock of Cheshire cats, but who knows what that means, really.

11:10:57 AM
Before we start, can I once again voice my most profound gratitude to Roitenberg for making such an effort to ensure we media folks can follow along with the presentation, despite two different sets of page numbers and some of our pathological difficulty in reading flowcharts? Okay, good.

11:12:41 AM
Oliphant opens the next part of the hearing by getting Whitla to clarify once again that, testifying as a forensic accountant, he can’t definitively associate the withdrawals from Britan with the payments to Mulroney, although he *can* strongly infer that the Britan account was funded largely from the Airbus account.

Also, the Swiss *and* the Germans have actually refused to hand over the documents. Thanks, guys.

11:15:38 AM
Okay, we’re now moving from the presentation to the report itself — which none of us have — and the documents used to prepare it, which have all now been submitted into evidence; with that, Roitenberg is done with Whitla, and opens the floor to the other lawyers, should they have any questions for the witness.

11:16:45 AM
Team Mulroney up – Grondier is at the lectern, and he admits that if Roitenberg is confused, he’s even confused-ier — he has one bank account — “and it isn’t in Switzerland” — and sometimes forgets his PIN. Don’t we all. Anyway, he points Whitla to one of the appendices to the report, and gets him to confirm that most of the bank accounts listed are controlled by Schreiber; he does, however, note that he can’t conclusively confirm that Schreiber controlled *all* of them, although there are transfers from those ones to Schreiber’s accounts.

Grondier then chats with Whitla about how long he worked on the report – since January – and that sort of thing, and – you know, Whitla seems like a very agreeable sort; he keeps having trouble with his microphone, which is either too far or too close, and unfailingly apologizes to the listening audience when he notices.

11:22:11 AM
Grondier would like to point out that this is not, to put it mildly, the normal, everyday banking arrangementfor an average person – given that there may be accounts that Schreiber did *not* provide to the commission, it’s impossible to know exactly how the money flowed. Oliphant warns Grondier against putting words into the mouth of the witness — Whitla does agree that it was a “relatively complex” arrangement. I think we can all stipulate to that one.

11:24:32 AM
Grondier also points out that, among the other limitations of the report, as detailed in the introduction, was the fact that no *original* documentatio was provided. Once Whitla confirms that fact — it’s in the report, so I’m not sure what the point was of that exchange — Grondier steps down, and Robert Houston takes his place. Huh. Didn’t think he’d have questions for this witness.

11:26:24 AM
Houston notes that, counting up the number of accounts that were covered by the report, it seems there were a total of “thirty or forty” separate accounts. He also draws Whitla’s attention to an entity called “Rockliffe Enterprises”, which was controlled by Schreiber, to which several transfers were made in 1993, which total approximately $225,000. Does Whitla know the purpose of that money? No, he doesn’t – he didn’t have access to those documents, nor documents related to yet another Schreiber-controlled account.

11:29:31 AM
Bitucan! I’m sorry, I just get so excited when a familiar word surfaces amid all these numbers and charts. Anyway, Houston tries to get Whitla to confirm that he didn’t have access to cancelled cheques related to a ScotiaBank account, but when Whitla demurs, noting that he had one, Houston shows his crankiness, and then moves on to a 1988 cheque for $4 million and change that was written on the Kensington account, and was payable to IAL, as well as a payment to Schreiber of $4 million, also 1988, from just after the Understanding in Principle was signed.

Oh, and Whitla had no documentation for the Bitucan account for 1988, but here, Houston’s line of questioning runs into a slight hurdle; he tries to get Whitla to say he has no documentation from the Bank of Montreal account — yes, another account — but Whitla points out that, had there been cheques for, say, $90,000 paid through that account, it would show up in the scripting.

11:36:06 AM
Richard Auger takes the floor, and elicits the perhaps not insignificant bit of information that Whitla’s investigation did *not* include any accounts held by Fred Doucet or Brian Mulroney – really? Why is that? Does it somehow fall outside the mandate? Anyway, he wonders if Whitla is willing to confirm reviewing “literally hundreds of pages” of Schreiberian bank documents, he didn’t come across a single retraction – true – as well as Schreiber’s diary.

11:38:34 AM
Auger has Whitla go back through the slide that flows the money through Airbus, to IAL, to Frankfurt, where it hangs out with all its other little money friends, including over $100,000 from other accounts and interest earned, and then to Britan via the alleged 25% deposit rule.

11:41:42 AM
Redirect by Roitenberg! One brief area of reexamination, he promises – about that production of documents by Schreiber. Back in March, he notes, Schreiber agreed to be interviewed by Navigant, which he was, as confirmed by Whitla.

That’s it for the witness, who is now free to leave; Roitenberg notes that due to the predicted bafflement by numbers that he scheduled the entire day for this witness, and Oliphant – who is really kind of adorable, honestly – gravely asks him if he’s inferring that we’re done for the day, and the fact that I now find callbacks to forensic accountant testimony to be capable of making me laugh in court is probably something we should all worry about, really, but yet. There it is. A bit of amused back and forth, and we’re out for the day — the shortest one yet, but that’s okay by ITQ; she has to prepare for tomorrow’s reappearance by Schreiber. Whee!

Which means she’s signing off for the moment, but stay tuned.

11:49:27 AM
Oops – spoke too soon; SchreiberScrum! The amazing Rosemary Barton asks how it felt to have his version of the forensic events confirmed by a third party, and Schreiber – who is definitely happier than I’ve seen him in a while – says it felt good, but wants to highlight the refusal of the Swiss and German governments to fork over the evidence — he notes that the only way to force those governments to release the information is by consent. Oh, he’d also like to note that the evidence from the German prosecutor – yes, there was some of that – was comprised of their allegations, not necessarily hard documents. He’s the only one who provided documents – yes, I’m very tired of typing that word – voluntarily.

“If you want to follow the money,” he points out, you need *all* the accounts – not just his, but the Frank Moores, GCI, Fred Doucet and, yes, Brian Mulroney. He is “keen” to find out where the “big money” went — there were some sizeable accounts, so where did it go? “It didn’t disappear,” he lectures us, owlishly. When the *other* people are prepared to release *their* documents — unredacted — we’ll know the truth.

Or something like that.

And with that, Auger collects his client, and the scrum comes to an enigmatic close. “À demain,” indeed.