CRA to reveal details of Mob boss Rizzuto’s refund

DANIEL LEBLANC - OTTAWA — The Globe and Mail

The Canada Revenue Agency will shine a public light on the $381,737 reimbursement cheque that it incorrectly sent to Mob boss Nicolo Rizzuto, breaking with its traditional code of silence on its dealings with taxpayers.

CRA Commissioner Andrew Treusch has ordered an internal investigation on the payment to the now-deceased godfather, who was in jail and owed a large debt to the federal agency at the time.

A CRA official retrieved the cheque before it was cashed, but revelations about the payment have raised questions about the integrity of the country’s tax system, and a possible infiltration of the agency by the Mafia.

The CRA is promising to provide a “public summary of the findings of its investigation when it is complete.”

Earlier this week, the CRA refused to provide any details about the controversial cheque, citing confidentiality rules.

“There are several reasons why CRA would issue a cheque to a specific taxpayer, but the agency has a legal obligation to protect the information of all taxpayers, regardless of the individual’s circumstances,” CRA spokesman Noël Carisse said in a statement. “Should the CRA receive consent from the taxpayer’s estate, we could provide more details.”

It was unclear on Friday whether the CRA has sought or obtained any consent from the Rizzuto estate, as the agency refused to comment on the matter.

In a statement, Mr. Treusch said that after making initial inquiries into the transaction, he has “been advised of no criminal wrongdoing.” Still, he has asked for an “independent and immediate review” by the CRA’s security and internal affairs division.

“As always, if any information revealed by this investigation gives rise to questions of possible criminal behaviour, I have given direction that it be shared immediately with law enforcement officials,” Mr. Treusch said.

In a statement, National Revenue Minister Kerry-Lynne Findlay said that the federal government is ensuring that everyone at the CRA is held accountable.

“We are committed to cracking down on crime and protecting the integrity of our tax system,” Ms. Findlay said in a statement.

At the time of the cheque to Mr. Rizzuto in 2007, the CRA had a $1.5-million lien on his home, which meant he was not eligible for a reimbursement, according to court records and retired officials.

“This suggests either incompetence or corruption,” NDP MP Murray Rankin said in an interview.

Mr. Treusch said that he expects the CRA’s 40,000 employees to follow their code of ethics and conduct.

“Employees who breach the code are subject to disciplinary action, up to and including termination of employment. Where criminal wrongdoing is suspected, the matter is referred to law enforcement authorities, and we fully assist their efforts,” he said.

The CRA has been shaken by allegations that its Montreal offices were infiltrated by a group of corrupt employees. An investigation launched in 2008 resulted in fraud and corruption charges against six former officials, over allegations that business people received favourable tax rulings in exchange for kickbacks. The cases are all still before the courts.

Retired CRA officials said they could not comprehend how the payment to Mr. Rizzuto could have been approved.

“I can guarantee you that in order to issue a cheque for $382,000, you need approvals; no one can wake up one day and do that,”Jean-Pierre Paquette, who retired from the CRA in 2009, said in an interview.“How did that one manage to go through the safeguards? It remains a mystery.”

Mr. Paquette first spotted the payment as he was going through Mr. Rizzuto’s file. Given the patriarch of the Mafia family was in jail, Mr. Paquette spoke to Mr. Rizzuto’s lawyer before going to his house to recover the cheque from his wife and daughter, who complied.