From: AlanBaggett@volcanomail.com   
      
   Revenue Canada records missing in KPMG tax dodge affair :CRA SOTW    
      
   Watchdog groups call for investigation after correspondence appears to have   
   been deleted   
      
   By Harvey Cashore, Nicole Percy, Nicole McCormick, Kimberly Ivany, Patrick   
   Butler, CBC News Posted: May 18, 2017 5:00 AM ET Last Updated: May 18, 2017   
   6:34 AM ET    
      
   Some correspondence from the Canada Revenue Agency's former top enforcement   
   officer appears to have been deleted in the months leading up to the agency's   
   secret 'no penalties' amnesty offer to wealthy KPMG tax dodgers, a Fifth   
   Estate/Enquête    
   investigation has found. (CBC)    
      
   Call it the case of the vanishing CRA records.   
      
   Some correspondence from the Canada Revenue Agency's former top enforcement   
   official went missing — and appears to have been deleted — in the months   
   leading up to the agency's secret "no penalties" amnesty offer to wealthy KPMG   
   tax dodgers in the    
   spring of 2015, a Fifth Estate/Enquête investigation has found.   
      
   Those revelations may call into question the findings of an external probe   
   that cleared the CRA in its dealings with accounting firm KPMG, which for   
   years had run a secret offshore scheme in the Isle of Man for multimillionaire   
   clients.   
      
   "There's no reason to destroy these documents unless you're trying to cover up   
   a decision-making trail," says Duff Conacher, head of the watchdog group   
   Democracy Watch.   
      
   At issue is a central mystery in the KPMG affair.   
      
   Exactly why did the CRA offer KPMG clients what critics have called a   
   "sweetheart" deal to millionaire Canadians -- on the condition that the public   
   be kept in the dark about it?   
      
   That secret offer, leaked to CBC News in a brown envelope, sparked deep   
   resentment even within the agency.     
      
   A parliamentary inquiry into the CRA's dealings with KPMG was abruptly halted   
   by the Liberal-dominated finance committee last year.    
      
   Now, it appears that correspondence between 2012 and early April 2015 that   
   might have helped shed light on why the CRA signed off on the agreement —   
   was deleted.   
      
   Different answers    
   Fifth Estate journalists first learned about the possible deletion of CRA   
   records after making two virtually identical access to information requests   
   — one to the CRA and one to the Department of Justice.   
      
   Those requests asked for any correspondence involving Richard Montroy, then   
   the agency's head of compliance, and the KPMG file.    
      
   Initially, The Fifth Estate requested those records from the CRA in early   
   April 2015. However, the Canada Revenue Agency responded that there were no   
   such records.   
      
   "Documentation does not exist," the agency wrote CBC News.    
      
   The Fifth Estate later decided to request the same records from the Department   
   of Justice, which was also involved in the KPMG file.     
      
   And that's when The Fifth Estate received a different response.   
      
   The Department of Justice confirmed it did have correspondence involving the   
   CRA's Montroy in that time period — but would not release those records for   
   legal reasons.   
      
   So why would the Department of Justice have records of CRA correspondence —   
   but not the agency itself?   
      
   In a statement to The Fifth Estate, Montroy, now retired, said his practice   
   was to delete emails that were "transitory" or "not considered important."   
      
   Records considered transitory are allowed to be deleted under federal   
   government document retention rules.   
      
   'Not the way I worked'   
   "If you think I or my EA ever deleted emails 'because someone might see it'   
   (i.e. the famous smoking gun), you watch too many police dramas on TV. It is   
   just not the way I worked," Montroy wrote.   
      
   Democracy Watch's Conacher says any emails or other correspondence relating to   
   the KPMG file should not have been considered "transitory."   
      
   "There should be an investigation about whether these emails were deleted in   
   violation of the Access to Information Act."   
      
   After The Fifth Estate informed the CRA of the apparent discrepancy, the   
   agency's media relations office issued a statement. "We can confirm that a   
   reasonable and diligent search for records was performed by CRA officials."     
      
   The agency added that if correspondence was deleted it could simply have been   
   a matter of "routine records management practices."   
      
   That missing correspondence might have been relevant to a later probe into the   
   secret settlement offer.   
      
   In the spring of 2016, Revenue Minister Diane Lebouthillier brought in   
   Dalhousie University tax professor Kim Brooks to independently examine the   
   CRA's handling of the KPMG file.    
      
   Lebouthillier told Radio-Canada that Brooks was guaranteed access to all   
   relevant documents.   
      
   "I had specifically asked that [Brooks] get access to every document needed,"   
   LeBouthillier later said in an interview.   
      
   The correspondence in question, however, would have been deleted by the spring   
   of 2015 — nearly a year before Brooks was allowed complete access into CRA   
   files.   
      
   Brooks's review concluded the agency had acted "according to standard   
   practice."   
      
   Despite earlier media reports, the review also concluded there was no evidence   
   of internal dissent at CRA over the "no penalties" offer to KPMG clients.   
      
   Access to relevant documents   
   Dennis Howlett, head of Canadians for Tax Fairness, says the questions around   
   missing correspondence raise concerns about Brooks's findings.   
      
   "If the review did not have access to all the information needed to make a   
   clear decision then I think the review needs to be reopened," Howlett said.   
      
   A parliamentary inquiry into the CRA’s dealings with KPMG was abruptly   
   halted by the Liberal-dominated finance committee last year. (Canada Revenue   
   Agency)   
      
   In her report, Brooks wrote she was not asked to decide whether the CRA's   
   enforcement policies are "sufficient to the task" but rather, whether the   
   agency followed the existing practices.    
      
   After her report clearing the CRA, Brooks was appointed vice chair of the   
   agency's "independent" offshore advisory committee.      
      
   Brooks did not respond to a phone message and an email request for an   
   interview.    
      
   For his part, Montroy has previously stated that he did not personally make   
   the controversial settlement offer to the KPMG clients. The leaked document   
   shows the offer was signed by a manager in his division.   
      
   "What I did do," he wrote, "was provide appropriate oversight, when required,   
   that compliance approaches were based on the facts and merits of the case and   
   in keeping with CRA policies and the legal framework under which my branch   
   operated."   
      
      
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