[van-discuss] BC Hydro, Enron, Accenture and tax havens

[ernie yacub]

http://www.vancouver.indymedia.org/news/2002/08/15472.php

By: David C. Hawkins 

Wed, 21 Aug 2002 
B.C.Hydro's stored water launders Enron's profits through off-shore tax haven

In 1996, the B.C. Ministry of Finance and B.C. Hydro chair and public 
servant, John Laxton, set up an off-book partnership in a Carribean tax haven 
to enrich insiders on Hydro's Raiwind Project in Pakistan. 

Later, B.C. Hydro's Powerex ("pigs at the trough") subsidiary is alleged to 
have helped Enron extort profits in the California energy market of 2000 and 
then hide these profits in off-book, off-shore(Carribean) partnerships 
created by Arthur Andersen consultants (not auditors). 

July, 2002, the B.C. Ministry of Finance announced that Bahamas-based 
Accenture, formerly Andersen Consulting, would take over B.C. Hydro's 
invoicing, processing and collection of receivables and all of Hydro's energy 
trading in North America. In the same month, Accenture was blacklisted by 
California,s state treasurer for its questionable business practices such as 
relocating to offshore tax havens. California Treasurer Phil Angelides said 
that his office - which controls $45 billion in state and local funds - will 
stop doing business with Accenture and 21 other companies which headquarter 
offshore to avoid taxes and legal responsibilities. 

Forensic Analysis: 

My research into the news above, suggests that B.C. Hydro, the 
Andersen/Accenture Matrix and former Enron insiders together with their 
off-book partners, including the Royal Bank of Canada, the business law firm 
Fasken, Martineau and DuMoulin, the Canada Customs and Revenue Agency, and 
Canada's provincial and federal treasury boards, have created an off-book, 
off-shore partnership in the tax haven of the Bahamas to: 

1) Hide Enron's extortionate profits; 
2) Evade U.S. and Canadian tax liabilities; 
3) Enrich insiders with an unjust share of B.C. Hydro income; and, 
4) Launder money. 

Note: Enron created off-book partnerships (one was called 'Raptor'!) to hide 
debts from its shareholders; others were designed to hide profits from the 
IRS (let's call this one 'Captor'). 

The Captor partners appears to have hidden Enron's profits inside off-book 
loans to B.C.Hydro (early in 2001?) in return for the right to trade in 
future energy supplies from the water stored behind B.C.Hydro's dams on the 
Columbia River, but then..... 

.. Enron's bubble burst. Arthur Andersen was convicted of obstruction of 
justice. Enron's employee pension funds evaporated. Class action lawyers 
began hunting for Enron's assets. 

Problems for Captor. 

B.C.Hydro and its off-book Captor partners are hiding Enron's 
criminally-derived assets. Captor has also bought the water rights to Hydro's 
future energy supplies. To launder the assets there is, paradoxically amongst 
many other challenges, a problem of liquidity. At the time of the energy 
demand, the Captor partners don't know if there will be enough water stored 
behind Hydro's dams in British Columbia to avoid a violation of the Canadian 
Fisheries Act (which makes it an indictable offence to destroy fish habitat 
or kill fish). 

Solution for Captor: 

B.C. Hydro and its trading arm has been privatized into a syndicated loan 
income tax-friendly trust (SLITT), controlled by Accenture in the Bahamas on 
behalf of the Captor partners. Now Captor waits until the Enron scandal is 
off the front page then recovers its fraudulently acquired assets through an 
income trust for tax-friendly distribution to, and enrichment of, insiders.