Ex-PM Chrtien lobbied for African oil company he didn't know was based in tax haven, he says

Former Canadian prime minister Jean Chrtien lobbied for an East African oil venture whose business involved money flowing to tax havens, a notorious Australian fraudster and the lure of billions of barrels of crude, according to the latest major leak of offshore financial documents.

But in a twist befitting the often murky world of tax havens, Chrtien says he thought the company was based in Houston and never knew it was actually incorporated in Bermuda.

He also vehemently denies receiving 100,000 stock options mysteriously recorded on the company's books in his name.

Chrtien is among the most prominent Canadian names in the Paradise Papers leak made public Sunday, a vast trove of records obtained by a German newspaper and shared with media partners via the International Consortium of Investigative Journalists (ICIJ).

That's because in 2007, he did work for a company called Madagascar Oil, which hoped to pump ultra-heavy crude from some ofthe island country's remote but potentially massive oil fields.

The company had hit a snag and needed to smooth things over with the Madagascar government, so it brought in the former Canadian PM with his Rolodex of world leaders through Heenan Blaikie, the law firm he worked for at the time.

Chrtien was asked to facilitate a meeting between the company's CEO and the president of Madagascar, and he came through at a summit of African leaders.

"There was a meeting of African heads of state and it was a chance to meet with the president," Chrtien said in a phone interview withCBCNews last month, referring to Madagascar's then-leader, Marc Ravalomanana.

"It wasn't a long meeting. We sat down, and [Madagascar Oil's CEO] talked about what he wanted to talk about."

'Not here to scrutinize'

Chrtien said he understood the company was from Texas, with a chief executive who had worked in the Canadian oil sector.

Madagascar Oil's headquarters was indeed in Houston and its CEO had been president of Chevron Canada. But the Paradise Papers extensively document how the company itself was incorporated in Bermuda a tiny territory of 60,000 people that boasts no corporate tax and is considered a tax haven. Madagascar Oil had no employees there, just a mailing address at offshore law firm Appleby, where the company's administrative paperwork was signed and stamped.

There is no suggestion any of Madagascar Oil's offshore activity was illegal, but offshore incorporations and accounts often allow businesses to game the tax system adhering to the letter of the law while thwarting its spirit.

Askedhis views on companies' use of offshore schemes,Chrtiensaid that he believed "it's not the right thing to do" and that he had fought tax havens while in office. He said he had no idea Madagascar Oil was registered in Bermuda.

Maybe they thoughtthat ...having my name added to it would give it an air of prestige.- Former PM Jean Chrtien

"I never heard that mentioned. Listen, when someone comes to see you, you don't do an analysis of their corporatestructure. They come to see you to ask for your professional opinion,"Chrtiensaid.

"Every company has subsidiaries all over the place. ... We're not here to scrutinize that," he continued. "They asked me to help, they had retained our law firm, and I did my job. I did what I was paid to do."

But Brigitte Alepin, a Montreal-based tax expert and global authority on tax havens, said that public figures even afterthey have retired "need to avoid rubbing up against" anything involved with tax havens, which risk tarnishing their image.

• Explore the otherpower players in the Paradise Papers leak
• Look up other notable Canadiansin the Paradise Papers

"Public figures, especially current or former prime ministers, MPs, even famous artists, have to be vigilant about not going anywhere near tax havens. Everyone in the public limelight has to do their due diligence," Alepin said.

"Mr.Chrtien... was involved in all these questions to do with tax havens while he was running the country, so he has the ability to do a smell test and to ask the right questions."

Mystery stock options

Madagascar Oil was founded in 2004 by Sam Malin, a Canadian-raised businessman who believed Alberta oilsands expertise could help with the thorny problem of extracting Madagascar's ultra-heavy deposits of crude. Malin left the company a decade ago.

The company's other early backers and operatives, the Paradise Papers confirm, included Alan Bond, an Australian tycoon in the 1970s and '80s who came crashing down in a spectacular bankruptcy in the '90s and spent four years in prison for the country's then-biggest fraud.

The lone leaked document in the Paradise Papers actually mentioning Chrtien is a register of Madagascar Oil stock options granted through September 2007. It lists "Joseph Jacques Jean Chrtien" his full name as the recipient of 100,000 options issued on July 17, 2007, well before the company's shares ever traded on any stock market.

• See the document from the Paradise Papers

Chrtien is adamant he never received them. In fact, he said a CBC reporter was the first person to even tell him about it.

"I have zero records of it. I looked, and I've got nothing," he said. "They never told me I had any options. There's nothing stopping someone from saying, 'Mr. Chrtien has options to buy some of our shares.'"

Madagascar Oil did retain Chrtien's firmHeenanBlaikieand paid it $179,000 US over two years for "consulting," according to aseparate, public filingthecompanymade in 2010.Chrtiensaid that part seems accurate.

In a further statement issued after his name emerged over the weekendin the ParadisePapers, Chrtiensaid: "Any news report that suggests I have or ever had or was associated in any way with any offshore account is false. While as a lawyer for Heenan Blaikie, I did some work for Madagascar Oil as a client of the law firm.All fees were billed by the law firm and went to the law firm. I never received any share options and I never had a bank account outside Canada."

Madagascar Oil did not reply to questions about why it put Chrtien's name on the list of its stock-option holders or about any other aspect of its business.

"Maybe they thought," Chrtien speculated last month, "that since I was working for Heenan Blaikie, having my name added to it would give it an air of prestige."