Smart man, clueless decisions
What is it about politics that makes very smart people do things that are not at all very smart? It’s a question non-holders of elected office find themselves asking on an alarmingly regular basis, as the people they vote into positions of political decision-making careen, like out-of-control drivers on a rush-hour freeway, from controversy to scandal and from abuse of power to conflict of interest.
A second question inevitably follows: what in the world was he/she thinking?
Federal Finance Minister Bill Morneau — who has been on the hot seat lately for his efforts to close tax loopholes that allow small-business owners to “cheat” the system — is the latest politician to land neck-deep in the smart-person-doing-notsmart-things quagmire.
At the same time that he defends the controversial business-tax amendments and then backpedals from earlier pronouncements — in an effort to quell an about-to-boil uprising in the small-business sector — Mr. Morneau has been forced to defend a tax-related strategy of a different nature: the handling of his own massive personal fortune.
First came questions about a villa in Provence; Mr. Morneau’s flimsy rationale for not disclosing the property to the ethics commissioner for two years was “early administrative confusion” and the fact he doesn’t actually own it; rather, it’s owned by a private corporation in which Mr. Morneau and his wife, Nancy McCain, are partners.
That, for workaday taxpayers keeping score at home, would fairly be described as a loophole.
Next, and much more damning, came the flare-up this week over the fact the finance minister had not placed his substantial holdings in Morneau Shepell — the publicly traded pension and humanresources company he headed before seeking election in 2015 — into a blind trust. He advised officials of the company he planned to do so, and he reiterated that intention in media interviews after his election.
Instead, he opted to leave his shares in Morneau Shepell — estimated to be worth at least $46 million — in a holding company, which technically frees him from the obligation to divest or put them in a blind trust. As loopholes go, that’s a doozy. Mr. Morneau, echoed by Prime Minister Justin Trudeau, has stated repeatedly that his actions followed the direction he received from ethics commissioner Mary Dawson. For her part, Ms. Dawson said her advice to the finance minister was limited to telling him that, given his current financial arrangements, a blind trust “wasn’t required.”
Perhaps not. But surely, for ethical appearances’ sake, it was preferred.
Given that Mr. Morneau, as finance minister, is responsible for the aforementioned small-business tax-loophole closing strategy, and is also the sponsor of legislation (Bill C-27) that will significantly affect pension rules, he must have recognized that his personal financial situation was fraught with conflictof-interest peril. Morneau Shepell is in the pension business, for heaven’s sake.
And yet he proceeded, lecturing Canadians on the evils of small-business tax loopholes while exploiting some of the biggest big-business loopholes imaginable. And now he, Mr. Trudeau and the federal Liberals find themselves in a public relations mess from which there seems to be no clean exit.
Mr. Morneau is, by all appearances, a very intelligent and highly accomplished individual, which makes it all the more puzzling that he would be so cluelessly entangled in this exercise in abject political stupidity.
He’s the guy in charge of all the money. Seriously, what in the world was he thinking?