Ontario Finance Minister Resigns

Globe and Mail ^ | 11 Oct 2005 | Karen Howlett, Paul Waldie, Andy Hoffman

[Fair Go]

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Globeandmail.com > Business > Article GGGGGText Size: Ontario Finance Minister resignsBy KAREN HOWLETT and PAUL WALDIE AND ANDY HOFFMAN

Tuesday, October 11, 2005 Posted at 10:23 PM EDT

Globe and Mail Update

A new top Ontario Finance Minister Greg Sorbara stepped aside last night, following revelations that he is a target of a long-running criminal investigation into Royal Group Technologies Ltd.

"While I have no idea as to what the allegations are or the facts on which they are based, my responsibility as a minister of the Crown is to step aside pending a determination of the matters alleged in the warrant," he said in a statement.

The decision of the senior cabinet minister marks the biggest scandal to hit Premier Dalton McGuinty's government and will certainly cast a cloud over today's Speech from the Throne.

Mr. McGuinty said Mr. Sorbara agreed when this issue first came to light that he would step aside if he became the subject of an investigation.

"He's done the right thing under the circumstances," McGuinty said at a late evening news conference. "If he's cleared, he will be returned to cabinet."

Mr. Sorbara hurriedly called a news conference last night, following a day of damning revelations accusing him of defrauding shareholders and creditors of Royal Group over a seven-year period.

The allegations were contained in search warrants, filed in court and served yesterday morning on four companies, including a Woodbridge, Ont., property developer owned by the Sorbara family.

Mr. Sorbara was initially defiant in the face of calls for his resignation, saying he had no intention of stepping down.

"I can tell you clearly and unequivocally, I am not involved in the investigation," he told reporters yesterday afternoon. "Over the past 18 months, I have never been contacted by the RCMP."

He repeatedly said he is "simply not involved in the investigation" even though the search warrants specifically cite his name in connection with the allegations.

He said he found out about the search warrant yesterday morning when someone from Sorbara Group left him a voice message but that he had not seen the document.

Mr. Sorbara was a long-time director of Royal Group, a Woodbridge building products company, until October, 2003, when Premier Dalton McGuinty rewarded him with the most important cabinet post in his new Liberal government.

The scandal swirling around the company has dogged Mr. Sorbara since February, 2004, when the RCMP, the Ontario Securities Commission and federal tax authorities revealed that they were conducting multiple probes into Royal Group. But yesterday was the first time he became directly implicated.

He was named in the search warrants filed in court, along with a handful of former Royal Group executives, including founder Vic De Zen. The RCMP accuses the men of unlawfully defrauding shareholders and creditors "by deceit, falsehood or other fraudulent means" from Jan. 1, 1996 to Sept. 30, 2002.

The accusations are not formal charges, and are contained in court orders for the production of financial statements, banking records and documents relating to numerous business transactions, including Royal Group's extensive dealings with a luxurious resort controlled by Mr. De Zen on the tiny Caribbean island of St. Kitts.

Mr. De Zen and the others have denied any wrongdoing and none of the allegations have been proved in court.

The allegedly fraudulent acts were in connection with a series of so-called related party deals between Royal Group and private companies owned by Mr. De Zen and other officials.

In November, 2004, Royal Group dismissed Mr. De Zen as chairman and removed two other top executives after an internal probe by forensic accountants Kroll Lindquist Avey revealed they earned $6.5-million on a related-party transaction six years earlier.

A summary of a final report by Kroll, released last March by Royal Group, concluded that Mr. De Zen and the others were involved in more than 20 related-party transactions dating back to 1996.

Royal Group did not disclose details of the transactions, including whether the Sorbara Group was involved in one of them. Yesterday, company spokesman Richard Wertheim said Royal Group has made all material disclosures and had nothing further to add.

The search warrant on the Sorbara Group (actually a subsidiary called Sam-Sor Enterprises Inc.) mentions two property deals in Brampton that took place in 1996 and 1997.

The warrant does not indicate that the deals involved Royal Group or provide any details on the purchase price. In the warrant, the RCMP is requesting financial statements from 1996 to 1998, sale and purchase agreements, letters and ledger entries relating to the sale.

Mr. Sorbara said he has not been involved with Sorbara Group since he became Finance Minister.

The allegations are expected to overshadow today's wed. Speech from the Throne, in which the McGuinty government is expected to outline its achievements during its first two years in office and outline its priorities for the remainder of its term.

Opposition leaders noted yesterday that Mr. Sorbara vowed back in February, 2004 that he would resign if he ever became a target in the Royal Group probe. "Should I ever become the subject of an investigation, I would step aside pending the outcome," he said in a written statement at the time.

"Mr. Sorbara is specifically named in a warrant," New Democrat Leader Howard Hampton said yesterday. "That is a very serious matter. He should step down as Minister of Finance and the Premier should insist that he step down."

Progressive Conservative Leader John Tory echoed that view, saying: "If Mr. Sorbara does not offer to resign, then Premier Dalton McGuinty should request it."

The Mounties also served a search warrant on the headquarters of the Bank of Nova Scotia in downtown Toronto yesterday. It marked the second time the RCMP had raided the bank as part of the Royal Group investigation. The police made headlines last February when they parked an enormous RCMP-marked camper van at the corner of King and Bay streets.

"The bank is not under investigation," said spokesman Frank Switzer. "The police are conducting a search with respect to a client and we are co-operating fully."

[Fair Go]

Is there no end to the political scandals in Canada?

[Allan]

Sorbara’s brother, Joseph, who is a board member of York University, Toronto,
also has been accused of stealing millions from the University
in a crooked land deal .

The tentacles of the Libranos extend everywhere in Canada:

York U. land deal draws media fire

TORONTO – A deal that saw York University sell some of its land for a housing development has been criticized for not being publicly tendered, and for having potentially cost the cash-strapped institution millions of dollars.

In an investigative report published Feb. 26, the Toronto Star also alleges the university official involved in negotiating the deal has close business ties with the chosen developer, Tribute Communities. That company is now building 550 townhouses, duplexes and detached homes ranging in price from $279,990 to $458,990. The development, to be called The Village at York University, is located on barren adjacent land.

The Star says Joseph Sorbara, university board member and chair of York University’s land development agency, whose family has business connections with Tribute that go back to 1994, is also a developer and is involved with Tribute in other construction jobs and has investments in two Tribute companies. It says Sorbara touted Tribute as the best builder for the York project and was a key negotiator in the land deal but “the land,” said the report, “appears to have been sold for much less than it was worth.”

According to documents examined by the newspaper, the per-acre price in the deal was $374,648. Other property in the area offered for sale on the open market by another public institution sold in 2003 for $879,817 per acre after offers from multiple bidders.

In a written statement to the Star, York said its goal was to find the best developer for the project, not the best price. York’s president, chair of the board and Sorbara all refused the newspaper’s request for interviews.

York University, with 47,000 students, has Canada’s third-largest student body and has the largest campus in the country at 524 acres. The owners of homes in The Village at York University will have access to the institution’s fitness centre, indoor pool, gym, squash courts and outdoor tennis facilities as well as borrowing privileges at the library.

The Star also points out that Tribute’s owner Howard Sokolowski is part-owner of the Toronto Argonauts, which is in partnership with the federal and provincial governments and the university to build a $70-million football stadium at York.

The university’s statement reportedly said York is “satisfied that the land was sold for a competitive price ...”.

[Allan]

ping

[ncountylee]

Yet another liberal.

[fanfan]

Thanks for the ping, Allan.

Ontario Finance Minister Greg Sorbara stepped aside last night, following revelations that he is a target of a long-running criminal investigation

He knows nathink , nathink ! (sgt. Shultz)

Typical liberal.

[GMMAC]

Hey FanFan,
The German accent you've utilized above sets an inaccurate flavor.
Click this 'talkin' wid 'is hans' pic for that true 'Libranos' feel:

Former Finance Minister Sorbara
AKA "Don Gregory"

Compared to the Martin gang, ya gotta love the McGuinty Liberals' far more "in your face" style of moral bankruptcy:

An openly gay Minister of Health 'combating' the spread of disease and now a Finance Minister charged with fraud - LOL!

Hopefully, Attorney General Michael Bryant's disbarment will be the next news flash from Queen's Park?

[Former Proud Canadian]

A liberal involved in corruption and scandal? Couldn't be.

[fanfan]

Nailed it again, Gmmac.

[ARridgerunner]

All politicians are crooks wearing for sale signs. Not surprising, but at least they could stay bought. They don't have even that much decency.

[Heartofsong83]

At least Mr. Sorbara was honorable enough to resign immediately when it became exposed, unlike the desperate federal Librano cabinet ministers, who stay on long after scandals break...

[GMMAC]

"At least Mr. Sorbara was honorable enough to resign immediately when it became exposed ..."

Hardly!
Calls for Sorbara's resignation over his unsavory business dealings have been heard for the better part of 2 years now!

Based upon a very quick search, here's one going back more than 19 months:
Step Aside, Mr. Sorbara ~ canadafreepress.com, March 1, 2004

Far from being 'honorable' in comparison to the Ottawa branch of the Liberal crime family, even a gangster like Chretien finally demoted Hedy Frye from Cabinet a mere 7 or 8 months after her lying 'crosses are now burning' claim was thoroughly exposed in the Commons!

Surely, by this standard, McGuinty either has less shame or more arrogance - take your pick.