On the Farm

On the Farm

Tuesday, February 26, 2008

Who was Bruce Verchere? And why did Karlheinz Schreiber raise his name?

Unless you were watching Mr. Schreiber's appearance before the Commons' Ethics Committee on February 25, you would never know that he raised, again and again, the name of Bruce Verchere. And members of this committee asked me, on February 14, several questions about Verchere.

Who is this man? And why does he figure in the Mulroney-Schreiber story?

The short answer is that Verchere was the tax lawyer who managed Mulroney's blind trust between 1984 and 1993.
Verchere is also the central character in Blue Trust: The Author, The Lawyer, His Wife, and her Money, a book I published in 1998.

A native of Kamloops, B.C., he graduated from the University of British Columbia in 1963 with a law degree and began his career as a government tax lawyer in Ottawa.

He married a beautiful woman, Lynne Walters, who was also a brilliant computer systems expert and they eventually moved to Montreal where he developed a large tax practice. Lynne Verchere established a company to produce software she had developed that would run billing and time management systems for law firms; at the same time, she managed the financial aspects of her husband's law practice.

The Vercheres prospered, with much of their income generated by Lynne Verchere's business. They bought a large house in Westmount and became part of Brian and Mila Mulroney's social circle.

Verchere had several well-known clients but the best known were Mulroney and the author, Arthur Hailey, famous for his blockbuster books
Hotel and Airport.

In Hailey's case, Verchere helped him move from California to settle in the Bahamas, a tax haven, in order to avoid punitive U.S. income taxes on earnings from these books and their movie versions.

When Mulroney was elected prime minister in 1984, Verchere managed his blind trust as his financial trustee. He was also his tax lawyer.
Both Bruce and Lynne Verchere received patronage appointments from the government during this period.

Verchere developed a skill in hiding money. After his wife sold her company to Prentice Hall in 1987 for nearly $17-million, he moved the money around through Panamanian shell companies and other offshore entities until it finally landed in two banks in Geneva: Darier Hentsch et Cie and Pictet Cie, both specializing in wealth management and infinite discretion.

Bruce Verchere used these banks for some of his other clients as well, including the Haileys.

But to her shock, Lynne Verchere discovered that her husband had put the money out of her reach. Not only had he moved it into Swiss accounts that she couldn't access - and was spending it recklessly - but he was having a blazing affair with Arthur Hailey's daughter, Diane, a much younger woman. Adding insult to injury, he and Diane were expecting twins.

With a great deal of effort, Lynne Verchere succeeded in obtaining an injunction to freeze her assets; the injunction, held in the Montreal courthouse, spells out the extent of her husband's fraudulent activities to hide the money.

And her lawyers made it clear to Bruce Verchere that unless he dumped Diane Hailey, returned to Lynne and gave her back her fortune, she would turn over damaging information to the RCMP and to her husband's law partners with information about his activities on behalf of others.

A strange coincidence appears at this point. The lawyer acting for Bruce Verchere in these grinding, emotional negotiations was Claude-Armand Sheppard, the same lawyer who, acting for the federal government, questioned Brian Mulroney three years later when Mulroney sued the government and the RCMP for libel. It was Sheppard who, in 1996, asked the former prime minister about his relationship with Karlheinz Schreiber and received the vague answer about an occasional cup of coffee together.

Verchere agreed to his wife's conditions. On August 3 an out-of-court settlement was signed and he moved back into the family home. On August 28 he walked into his bathroom with a shotgun, put the barrel in his mouth and pulled the trigger. Mulroney attended his funeral as a pallbearer.

As the Globe and Mail reported earlier this month - on February 12, 2008 - "Mr. Schreiber has also testified that in the early 1990s, Mr. Doucet asked him to send a portion of the secret commissions from the 1988 sale of Airbus airplanes to Air Canada to Mr. Mulroney's lawyer in Geneva. Mr. Doucet vigorously denied the claim, calling it a 'fabrication. I did not know any lawyers in Geneva, Switzerland, or indeed anywhere else in that country,' he told the committee."

This week Schreiber went back on the attack.

First he told the committee that the lawyer in Geneva was Bruce Verchere.

When they appeared not to notice, he hauled them back to his statement saying, "You guys haven't listened." He stated plainly that Verchere was Mulroney's financial trustee and that the "lawyer in Geneva" was Bruce Verchere.


Anonymous said...

Amazing article Stevie - makes one ask, is it ever going to be possible to get back to HONESTY, INTEGRITY and TRUTHFULL Governments? Does not seem likely to me, reading your accounts, those of Chretien, and locally Campbell. Where did we, the people, go wrong? Jo5ey

Robby said...

Canada's Gossip Meister strikes again.
Mr Bruce Verchere is deceased. Why dredge up the past yet again. Mrs Verchere does need this tragig side of her life in the public eye again.
As for PM Mulroney perhaps it is time for you to. Send an open apology to a National Newspaper for you actions as an informer for the RCMP and for dragging up the trash stories of Francois Martin before the ethics committee. NO one including yourself could show that their has been any Government impropriety. Apoligise and let Brian Mulroney retire in peace as one of Canada's greatest leaders.
A.Robby McRobb CD
A Proud CAnadian

Lawrence said...

Wow. I am in shock at this revelation. Your additional information here makes a whole lot of things that the very marginalized Schrieber has said to the Ethics Committee make sense. I hope but don't know if you have much readership here, but this is like the key to the puzzle as I have seen it in the hearings to date. I wonder if other people feel the same way.

I do hope you can blog more on this. Thanks Stevie.

Stevie Cameron said...

Mr. McRobb worked for the Mulroneys at 24 Sussex Drive and is, not surprisingly, upset about the comments made about him by me in On the Take, on this blog and by the former Mulroney chef, Francois Martin.
Stevie Cameron

Anonymous said...

Go for it Stevie - even a "bad" review is good advertisement for your blog. All comments must be considered good, shows people are reading it. wish we had many more "REAL" investigative reports like you. Jo5ey

Anonymous said...

Stevie, I've passed what you've said along to as many interested others as I could. They all said "wow."

Your additional information gives so much explanation for what we hear and read elsewhere.

Too bad so many members of the Ethics Committee were asking the wrong questions.

Thanks for this.

Lawrence said...

Hi Stevie,

I just leafed through "On the Take" and "The Last Amigo." The information you posted up here is a new connection.

I gather your bankrupt (?) publisher would not sponsor a second edition. Would you be able to do a creative commons "pay what you can" electronic version?

I got another question for ya: Would there be a new book coming from you or a revision to the "The Last Amigo"? Its a very interesting read at the moment having watched via CPAC some of the testimony.

You likely have a very interesting publishing opportunity available to you. Wish you the best of luck.

Stevie Cameron said...

Interesting suggestion here from Lawrence.
On the Take (published in 1994 and in paperback in 1995)and Blue Trust (the book about Bruce Verchere), published in 1998 and in paperback in 1999, are still available from Seal Books but The Last Amigo: The Anatomy of a Scandal, published in 2001 (about the Schreiber-Mulroney relationship and more) is out of print.
The publisher of all these books, Macfarlane, Walter & Ross, was sold to McClelland and Stewart in 2000 and M&S shut it down after The Last Amigo came out.
M&S will not be re-issuing The Last Amigo and rights have reverted to me and to my co-author, Harvey Cashore.
There has been no decision yet about republishing it but I do hope to update it and do just that.

And given the prospect of a public inquiry into all these issues, the suggestion for an online version is a good one. The Last Amigo is a guide to the whole case, contains a comprehensive record of the payments made by Schreiber to all the players and explains how it all came about.