Warner fails to pay taxes
By Camini Marajh Head Investigative Desk (Express).
Story Created: Oct 19, 2013.
Austin Jack Warner, the once powerful football figure who boasted of having deep pockets before his entry into politics, has been operating outside this country’s tax laws with impunity for more than a decade in what tax experts say is a deliberate scheme to evade the payment of personal and corporate taxes.
And, as continuing Sunday Express investigations have found, he failed to disclose tens of millions of dollars in cash gifts received from miscellaneous sources and beneficial interests held in no less than 15 business entities as required by the Integrity in Public Life Act (IPLA) 2000.
Warner, who has been the subject of national and international investigations into allegations of financial fraud, has failed to file corporation tax returns for all of his registrable interests disclosed in his statements of return made to the Integrity Commission (IC), the State watchdog agency tasked with keeping public officials honest.
The stockpile of evidence, collected in an ongoing Sunday Express investigation, reveal that the former government minister, Member of Parliament for Chaguanas West, interim political leader of the Independent Liberal Party (ILP) and the man who is offering himself as a prospective prime minister of this country, failed to file corporation tax returns for any of his many business interests in more than a decade and in one or two instances—seven years.
Off the Grid
In the case of three of his business interests—Eastern Agricultural Resorts Ltd, JAW Holdings Ltd and JAW Ltd—there is no record of any of these companies even being registered with the Board of Inland Revenue (BIR), according to persons with knowledge of the situation. Warner, who served at times as this country’s acting prime minister and is the listed owner of a substantial business empire which includes the US$26 million Dr Joao Havelange Centre of Excellence, also failed to file any personal income tax returns for the last three years.
His last return filed in 2009 reported a net income of TT$651,893 with consultancy fees from the Federation Internationale de Football Association (FIFA) of US$75,000 or TT$472,500. Total emolument income, including pension, was said to be $179,393. His tax return, however, failed to reflect honoraria payments made by football’s ruling body for North and Central America and the Caribbean (Concacaf) of which he was president until a 2011 cash-for-votes corruption scandal put an end to his world football administrator career.
Concacaf insiders report that Warner was provided with an American Express card with a US$10,000 a year credit limit, attendance fees of US$10,000 per board meeting (this figure was increased to US$15,000 in 2010), a per diem allowance of US$175 and hotel and air travel expenses whenever he had to go abroad on Concacaf’s business. The board of the region’s governing football body met twice, sometimes three times a year.
Warner also failed to disclose the honoraria payments he received from Concacaf to the IC in direct breach of the IPLA legislation. In a December 9, 2011 response to an IC request for additional information relating to his statement of registrable interests, he made clear that he was “not employed by Concacaf” and had been provided only with a vehicle from the football body.
Tax Evasion
He also reported not being in receipt of any employment or dividend income from 11 of the 12 business entities he disclosed an interest in to the IC. The list of Warner’s 11 comprise: Sportel Ltd, Multi Stores Ltd, Eastern Agricultural Resorts Ltd, Jamad Maintenance Services Ltd, Reenalen Ltd, JAW Ltd, Renraw Ltd, Kantac Ltd, JAW Holdings Ltd, Joe Public Ltd and H&Z Ltd.
In correspondence dated February 7 this year, his long-time pal and accountant-in-chief Kenny Rampersad informed the IC that Warner held investments in the Cayman Island company, J&D International (which derived tens of millions of US dollars from Warner’s controversial acquisition of World Cup broadcasting rights for the region), and CCAM Ltd.
As reported in an earlier series published in this newspaper, Warner bought the TV rights for several World Cup editions for a mere US$1 in a backroom deal in Zurich. Publicly, the deal was sold as a rescue effort to save the financially-stricken Warner-created and controlled CFU but privately, the lucrative TV rights were diverted to Warner’s offshore company.
CCAM is one of three partners behind a trading entity called the Dr Joao Havelange Centre of Excellence (CoE), the disputed asset which was listed on the books of Concacaf for years by Rampersad and which Warner claimed was a gift from FIFA. CCAM has failed to file corporate tax returns for more than a decade or pay any taxes, including VAT.
Opaque Dealings
Renraw Ltd, the other business partner behind the CoE has also failed to file corporation tax returns for the last seven years in clear contravention of the Income Tax Act. It has, however, filed VAT returns, for the CoE. But the revenue figures submitted in the VAT filings for the CoE in the last 14 years, according to persons with knowledge of the situation, suggest under-reporting and in some instances, no reporting of income.
For example, Renraw claimed an average annual CSM (Commercial Supplies Made) or revenue stream of TT$7.5 million.
In each of the last four years which gave it a VAT liability of about $300,000 a year. In 2000, Renraw reported $1.3 million income for the CoE. No return was filed for 2001 and in 2002, revenue was reported at $2.9 million.
Concacaf’s financial statements for 1999 show payments of US$1,415,388 or TT$8.8 million going to the CoE for what is described as “courses”. In 2001, this figure went up to US$2,291,762 or TT$13.9 million. In 2009, Concacaf paid CoE US$650,738 or just over TT$4 million for courses run at the Macoya sport and hotel facility. In 2010, the figure was US$578,608 or TT$3.6 million. Renraw did not file VAT returns for the CoE for several years including 2004, 2006, 2007 and 2008.
It is not clear whether the VAT returns filed by Renraw represent that company’s share of earnings from the CoE and whether they include revenue from Bollywood concerts, trade shows, weddings and miscellaneous other events. The tax laws require each member of a partnership to disclose income to the BIR. In this case, none of the partners, including Warner himself, disclosed income to the national tax collection agency. Warner also failed to disclose income from his Cayman activities.
Withholding VAT
And in yet another contravention of Trinidad and Tobago’s tax laws, a trading entity called Le Sportel Inn, another Warner business creation owned by the same three partners—CCAM, Renraw and Warner—and the apparent management company of the CoE, has been issuing invoices without evidence of a VAT registration number stated in the billing document, as required by law.
Documents obtained by this newspaper show another Warner company, Jamad Ltd doing the same thing. A 2004 Jamad invoice shows office rent charges issued to the Trinidad and Tobago Football Federation (TTFF) for $30,000 with a 15 per cent tax rate of $4,500. It is not clear whether the tax charged is for VAT but the company has not filed VAT returns since April 14, 2003.
Sources report that some of these matters, all criminal offences, have been engaging the attention of the tax authorities and the Integrity Commission. Warner, who failed to disclose his shareholder interest in Jamad Ltd to the IC, received five cheque payments totaling $1 million in 2007 from contractor and UNC (United National Congress) financier Krishna Lalla.
Million dollar payments
He received $27.1 million in more cheque payments through an entity called Centre of Excellence/Indoor Facility and another half a million through the CFU from Lalla, none of which he disclosed to the IC and/or the Board of Inland Revenue as required by law.
Warner who entered public life in 2007 as a Member of Parliament also failed to disclose the huge cash payments he received from Lalla that year. In all, he is reported to have collected $60 million in cash and cheque payments from Lalla, who in court filings, contends the money was a loan. Warner insists it was a gift.
The controversial football figure who built a billion-dollar empire on a foundation of questionable gains also failed to report to the IC and to the BIR a US$250,000 cash payment he received in 2008 from disgraced ex-AFC (Asian Football Federation) president Mohamed bin Hammam. Adding to the complex web of inter-connected layering of companies are asset and property buys, warehoused in a myriad number of business entities.
As reported in the 12-part Sunday Express series published earlier this year, Warner is using a multitude of entities to hide his business dealings, including the theft of some $100 million in public and private sector funds paid to the TTFF in support of 2006 World Cup campaign. Financial statements and bank records in the possession of this newspaper show substantial payments in the tens of millions of dollars paid to Warner, his private companies, other family-owned businesses and another Warner-controlled creation called LOC Germany.
Maze of companies
JAW Ltd, a private Warner company, redirected more than $13 million in public and private sector money held at TTFF Republic West Mall and Long Circular branches to itself. Another $3 million in grant money paid to the national football federation was moved to Jamad Ltd, Warner companies that have not filed corporation tax returns in years.
The list of omitted entities in which Warner either had an interest or continues to hold a beneficial interest: Le Sportel Inn, Jamad Ltd, Catch of D’Day, Arouca Development Company (struck off the company registrar since its last annual return filing on December 15, 2012), Dr Joao Havelange Centre of Excellence, Forbiz Ltd, LOC Germany 2006 Ltd, Ossature One Ltd, Concacaf, Magwar Ltd, D’Coal Pot, D’Reef Ltd, Semi Professional Football League, Dos Ninos Ltd and La Batimeat Ltd. Warner was unavailable for comment.
—Continues next week
