Fugitive businessman with Tory ties arrested in Toronto
By John Nichol
Oct 26, 2012
Fugitive Nathan Jacobson, whose ties to the federal Conservatives made him the subject of recent Question Period queries from opposition benches, was arrested at his home in Toronto Thursday afternoon.
The Winnipeg-born businessman had his bail denied in Toronto court Friday and remains in Toronto’s West Detention Centre awaiting another appearance Oct. 31.
U.S. Justice authorities in San Diego had told CBC they were upset that no Canadian law enforcement agencies had responded to their July 30 warrant for his arrest when Jacobson failed to attend court after pleading guilty to money laundering.
With others, Jacobson had set up an online pharmacy known as Affpower, based in Costa Rica, that sold drugs to Americans without prescriptions from 2004 to 2006. The 58-year-old was originally charged with several counts of fraud, money laundering and the distribution and dispensing of controlled substances, but he co-operated with authorities and pleaded guilty in 2008 to laundering $46 million in drug payments.
He was expected to serve a four-year sentence, but failed to show up at pre-sentencing.
An international red notice — a warrant issued for a flight risk — was certified this week by a Canadian judge for the sometime philanthropist who made millions selling GMproducts and setting up gas stations in post-Soviet Russia.
U.S. District Attorney Philip Halpern of San Diego would not comment on the arrest because the matter is before “judicial processes.”
Claimed he was friends with Baird, Kenney
Calls by CBC on Friday to his three lawyers, his wife and business partner were not returned.
In recent years, Jacobson had spent much time in the corridors of power, both in Israel and Canada, and in March a smiling Jacobson was photographed between both Prime Minister Stephen Harper and Israeli leader Benjamin Netanyahu at a reception in Ottawa. Jacobson claimed to have worked on the 2008 campaign for the Tories and was also considered a friend of cabinet ministers Jason Kenney and John Baird.
But when challenged earlier this year on their relationship to Jacobson, both ministers said they were oblivious to Jacobson’s legal problems.
Jacobson himself had initiated a lawsuit against Conservative MP Mark Adler last fall for what he claims was a $265,000 loan. Adler, in court documents, denies that amount changed hands, and said what was given to him was a gift from Jacobson to expand his Economic Club of Canada to the United States.
Besides donating more than $10,000 to the Conservative Party in recent years, Jacobson was prominent in his philanthropy within the Jewish community. Source
Who’s the man between the prime ministers?
By Michael Harri
Sept. 28, 2012
Stephen Harper, Nathan Jacobson, Benjamin Netanyahu
Whatever the relationship between Prime Minister Stephen Harper and Nathan Jacobson, the high-flying Canadian businessman now a fugitive from U.S. justice, one thing is certain: they certainly didn’t just run into each other at a “community event” as the PMO claims.
Jacobson had an intimate relationship with several senior Harper cabinet ministers, paid off a CSIS agent while doing business in Russia, and apparently finessed a secret settlement out of the Canadian government under the Liberal administration of Jean Chretien even though the government denied ruining Jacobson’s business interests abroad.
Notwithstanding the Harper PMO’s ludicrous official line that “the prime minister may have met with Mr. Jacobson at a community event, as he meets thousands of Canadians from all walks of life each year,” perhaps they would be good enough explain this: who is the man standing between the prime ministers of Canada and Israel and how did he make his way into the inner sanctums of the current government?
For a prime minister who has lived through the murky departure of Arthur Porter, his handpicked chair of the Security and Intelligence Review Committee, and who also hired convicted felon Bruce Carson as a senior policy analyst and troubleshooter, it is a momentous question.
Porter left office under a cloud after his dealings in Africa with an arms dealer were revealed, and now faces a police investigation from his days at the McGill Hospital Health Centre and a billion-dollar contract the hospital awarded to disgraced Canadian engineering firm SNC Lavalin Group Inc.
Carson was a lawyer who had been jailed and disbarred for multiple counts of fraud, a criminal past that, according to his own lawyer, was fully disclosed to the government during a security check before joining the inner circle of the PM’s staff.
And so, to Nathan Jacobson: For a man with a devastating secret, the Winnipeg-born businessman lived like a male version of Cinderella – until the legal clock struck midnight.
He was rich, powerful, funny, generous, and very well-connected. The Jewish community never had a more dedicated son. Well known for his philanthropy, Jacobson and his wife Lindi were staunch backers of Israel. After high school in Winnipeg, Jacobson spent six years in the Israeli Defense Forces.
The couple were major sponsors of an event in September 2007 to celebrate the 40th anniversary of the “re-unification of Jerusalem.” Jacobson was also a sponsor of the Maccabi Tel Aviv football club, a franchise that Gerald Schwartz of Onex Corporation once considered buying. (It was ultimately acquired by two Russian oligarchs in December 2007. Ironically, they were associated with the Russian defence corporation Rosoboronexport, Syria’s top weapons supplier.)
In October, 2010, when the Royal Winnipeg Ballet celebrated its 70th anniversary with performances in Israel, two of the major funders of the tour were Gerald Schwartz and Nathan Jacobson.
Even Jacobson’s anonymous philanthropy sometimes drew attention. A visitor to his ancestral home, Pavolitch in western Ukraine, admired how the Jewish cemetery there had been restored and noted the local talk about the modest benefactor whose name doesn’t appear at the site. “The renovations were done there a couple of years ago by a guy named Nathan Jacobson…”
The blogger posted photos of the restored graveyard on the internet. On the chain-link fence around the burial ground was a sign that read, “The cemetery is renovated by descendants of the Jews buried here, in their blessed memory.” The blogger got this response from a native son of Winnipeg who knew Jacobson from childhood days: “He’s about 10 years older than me and grew up around the corner … Nathan is an apparently successful international-man-of-mystery kind of guy.”
Not badly said.
The blogger posted photos of the restored graveyard on the internet. On the chain-link fence around the burial ground was a sign…
Jacobson’s business acumen and philanthropy made him legendary in both Canada and Israel. He was honoured at the 38th Annual Sports dinner in Winnipeg on June 23, 2010. “Nathan lives in Herzylia, Israel and is the current International Ambassador of Jerusalem,” a local paper gushed. Eleven hundred people attended the event, including the Israeli ambassador who flew in to the evening.
There were glowing profiles in the Winnipeg Jewish Review, a favorable notice in the Jewish National Fund of Canada newsletter, and praise in newspapers like the Jerusalem Post and Haaretz for his entrepreneurial brilliance.
Jacobson was busy in the world of the boardroom too, holding positions on the Jewish National Fund, Meir Hospital and the Ukrainian Jewish Congress. He also sat on the Board of Tel Aviv University and personally funded two faculty recruitment chairs at TAU, bringing over young researchers from Toronto. One of his fellow board members was Sheldon Adelson, a casino magnate and, according to Forbes, the 12th richest person in America.
The two men shared the same working-class roots as descendants of immigrants from the Ukraine and both were self-made tycoons. The businessmen have given generously to a variety of charitable causes and shown unwavering loyalty to the staunch right-wing policies of Israeli prime minister Benjamin Netanyahu — and to neo-conservative causes in their own countries.
Adelson, for example, has worked ceaselessly to have convicted spy Jonathan Pollard released from a U.S. prison, lobbied Washington to move its embassy from Tel Aviv to Jerusalem, and championed former GOP presidential contender Newt Gingrich after he declared the Palestinians to be an “invented people.”
In the current U.S. election, Adelson has promised “limitless” funding to defeat the Democrats. He may be the only political donor in history to have given $10 million to political activists who also happen to be billionaires themselves. Charles and David Koch, the recipients of the contribution, and whose own companies have annual revenues of $100 billion and estimated personal net worths of more than $30 billion each, have dedicated the donation to taking down Barack Obama through their action committee, Americans for Prosperity.
If Romney and the GOP couldn’t imagine a better supporter than Sheldon Adelson, Stephen Harper and the Conservative Party would have trouble finding a more dedicated backer than Nathan Jacobson.
Jacobson not only shared their conservative ideology, but put his money where his political heart was; from 2007 to 2011, he made the maximum donation to the party, and also gave to several individual Conservative riding associations.
The love did not go unrequited. Jacobson was a fixture at major events involving senior Harper cabinet ministers.
In May 2009, he was master of ceremonies for the 61st anniversary of the founding of Israel, an event that took place in the West Block of Parliament. He introduced the keynote speaker – Minister of Citizenship and Immigration, Jason Kenney.
The same month, Jacobson and Kenney appeared at a private party with Ezra Levant, an event attended by the who’s who of conservative journalists, columnists, and bloggers. The guests included Mark Steyn, Stephen Taylor, who would be appointed a director at the National Citizens Coalition on December 7, 2010; Kevin Libin, who published the controversial Danish cartoons mocking the prophet Muhammed while at the Western Standard; Sun Media’s Brian Lilley; and National Post columnist Father Raymond de Souza. One of the pictures posted on the internet by an attendee of the event shows Nathan Jacobson with his arm around a smiling Father de Souza.
When then Transport minister John Baird travelled to Israel in March 2010 to examine airport security methods (principally behavioral analysis to identify human threats), Nathan Jacobson was photographed with Baird at Israel’s holiest site, the Western Wall.
On November 4, 2012 the Mount Carmel dinner will be held in Toronto at the Fairmont Hotel hosted by the Canadian Friends of the University of Haifa. Immigration Minister Kenney is scheduled to receive an honorary degree that night. The campaign chair for the event was to have been Nathan Jacobson.
That was before an extraordinary disclosure by the U.S. Department of Justice put an end, perhaps temporarily, to Jacobson’s life at the pinnacle of business and political elites in two countries. Though his troubles had been brewing for some time, the official date of his exit from the corridors of business and political power was July 30, 2012.
It was on that day that the millionaire-philanthropist was supposed to appear for sentencing in front of a California judge. He had quietly plead guilty on May 7, 2008 to charges of conspiring to commit money-laundering, including clearing $46 million through his credit card clearing company, RX Payments Ltd.. Judge Irma Gonzalez issued an arrest warrant for the convicted fugitive and Nathan Jacobson, dual citizen of Canada and Israel, went to ground.
The investigation by U.S. authorities had been painstaking, involving special agents from six federal agencies including the DEA, FBI, and the IRS. Their work led to a 313-count indictment against 18 people on July 27, 2007. The individuals, including doctors and businessmen, were all involved to varying degrees with Affpower, an internet-based prescription pharmaceutical business.
The delay in sentencing Jacobson after his guilty plea following multiple charges of fraud, money laundering, and the distribution and dispensing of a controlled substance through an on-line pharmacy, is a familiar story. Jacobson made a deal with U.S. prosecutors. In exchange for his cooperation in the continuing criminal investigation of Affpower, Jacobson’s file was sealed — for six years as things turned out.
He had, in fact, been indicted in 2006, pleading guilty two years later. Over the next several years, he continued his career in the business and political stratosphere. No one apparently knew he had been fined $4.5 million for his part in the scheme, or that he could be looking at a possible 20-year stint in prison when he finally had to stand in front of an America judge for sentencing.
After his guilty plea was made public, the exits began to clog with friends, contacts, and business partners who didn’t know much about Jacobson’s dealings or history and who reduced their relationships with him to distant associations, or, as in the case of the PMO, chance acquaintanceship.
According to his office, Foreign affairs minister John Baird knew Jacobson, but didn’t know about his legal transgressions. Nor did the minister meet with Jacobson during an official trip to Myanmar in 2012. Jacobson was reportedly traveling in Asia, possibly Myanmar, when the indictment against him was unsealed.
Jacobson’s is reported to have had a connection with Myanmar Access, a company that was created in 2012 to develop business opportunities in the former Burma. The company was based in the same city, Yangon, that Baird travelled to in 2012 after Canada decided to open an embassy in the third most corrupt nation on earth. (On a list of 182 nations, only North Korea and Somalia are considered more corrupt.) Baird told Nobel Peace Prize winner Aung San Suu Kyi, “We would love to play a bigger role in development and trade and commerce,” an objective Nathan Jacobson would have heartily seconded.
Treasury Board President Tony Clement’s office said that the minister knew Jacobson, but had no idea of his U.S. conviction before July 30, 2012 or the activities that led to it.
Former business associate Alan Bell said in a telephone interview from Toronto that he knew nothing about Jacobson’s American legal problems.
Stephen Harper’s Director of Communications did not return calls for this piece. But this is what Andrew MacDougall told Postmedia’s Stephen Maher, the journalist who broke the Jacobson money-laundering story: “I understand the prime minister may have met with Mr. Jacobson at a community event, as he meets thousands of Canadians from all walks of life each year.”
It was intended to be an official response, but it was more like the PMO’s debut in stand-up comedy – unless you believe someone gets their picture taken between the prime ministers of Canada and Israel on a particularly significant day by running into them at a political barbecue.
Netanyahu’s appearance in Ottawa in 2010 was the first official visit to Canada by an Israeli PM since 1993. Relations between the two countries had been strained in 1997 after the Israeli intelligence service, Mossad, used forged Canadian passports in an assassination attempt against Khaled Meshal, a political official of Hamas. Canada recalled its ambassador over the affair.
The murder weapon the agents tried to use was a fast-acting nerve gas. President Bill Clinton was outraged and insisted that Israel turn over the antidote to the lethal poison after the Israeli agents were arrested. Netanyahu, who had approved the operation, complied. He later apologized for the dismal incident.
According to Haaretz, Netanyahu turned to renowned American propagandist Arthur Finkelstein after the disastrously botched Mossad assassination attempt. Netanyahu escaped a police investigation into allegedly sharing classified information with a a foreign national, because of lack of evidence. Finkelstein was widely credited with being the architect of Netanyahu’s first win as PM in 1996 when the hardliner defeated the moderate Shimon Peres.
The day of the photograph in Canada with Jacobson, Harper and Netanyahu, May 30th 2010, was noteworthy in another way. At 10 pm eastern, 4 a.m. Gaza time, Israeli commandos dropped down from a helicopter onto a Turkish aid ship 60 kilometers out to sea in international waters and killed nine people onboard in the ensuing confrontation.
It touched off a major international incident and caused the cancellation of a visit between the President of the United States and the Prime Minister of Israel. Prime Minister Netanyahu claimed that the commandos, armed with automatic weapons, acted in “self-defense” against aid-workers brandishing clubs and knives after their vessel was boarded. The government of Turkey called it a gross breach of international law.
Canadian Jewish Political Affairs Committee (CJPAC) annual ACTION party in Toronto in March 2010. (Left to right) Bernie Farber, Nathan Jacobson and then Transport Minister John Baird. Photo: Mitchel Raphael
Despite the ghosts of both the near and distant past, Netanyahu’s visit to Canada went off briliantly. He gave a rousing speech at the Ricoh Coliseum at the CNE grounds in Toronto on Sunday, May 30th at the opening ceremony of Walk With Israel, an event to raise money for educational and social projects in Israel. The visit moved to Ottawa, and Jacobson’s photo with the two PMs happened the same day.
No one in the Harper government, including Canada’s foreign minister (Baird personally met Netanyahu at the Ottawa Airport on May 30, 2010), had apparently read the Israeli newspapers just three days before that power picture was taken.
If they had, they would have known that Haaretz had run a story about a police complaint focusing on PayGea, a Canadian company that entered the Israeli market in 2008. That was the year that Nathan Jacobson entered his guilty plea on money-laundering charges and also the year he moved to Israel. PayGea was controlled by Jacobson. It provided on-line services similar to Paypal Inc., but specialized in clearing payments for medicines, legal soft pornography and gambling sites.
The police complaint had its origins in irregularities at a subsidiary of Israel Discount Bank (IDB).The chairman of the bank had been removed in 2009 after Globes, an Israeli business publication published in Hebrew, unearthed “anomalies in the clearing of credit card transactions on the internet at ICC-Cal”, a subsidiary of IDB.
Visa International levied a heavy fine against ICC-Cal for deviations from rules governing electronic commerce. The subsidiary then cut ties with the problematic clearing companies. A substantial portion of those problems were related to PayGea, the company owned by Nathan Jacobson, although the formal police complaint was sworn out against the former CEO of ICC-Cal.
On April 2, 2012, Jacobson’s on-line clearing company halted its Israeli operations without warning, leaving behind debts running into the millions of shekels. As one of Paygea’s creditors told Globes, “One morning they were simply gone.”
And so was Jacobson.
A full three months before senior members of the Harper government, including John Baird and Jason Kenney, said they learned of Jacobson’s dark side with the unsealing of his U.S. indictment, Paygea was an open scandal in Israel – a country in which both ministers had more than a passing interest and excellent contacts.
But even if Harper cabinet ministers and the PMO didn’t read the papers, they could have learned a lot about the man posing between the two prime ministers by looking into a lawsuit launched by Jacobson against the Attorney-General of Canada and various members of CSIS, Export Development Canada (EDC), and the Canadian Commercial Corporation (CCC), when the Liberals were in power. John LeCarre would have found the legal twists and turns novelistic.
It is not every day that someone takes Canada’s domestic spy agency to court, but that is exactly what Jacobson did in 1998. The case, which dragged on until 2004, laid out serious allegations about several CSIS agents, including Robert Fluke, who in the mid-90s worked on the Russian Desk of the intelligence agency.
According to Jacobson’s statement of claim, he and his company, The West Group Inc., were directed by Fluke to enter into two joint ventures in 1995 and 1996. Jacobson further alleged that Fluke advised him not to “bother with written agreements” because “Fluke would ensure that the parties would comply with obligations.”
Two questions come to mind: Why would a CSIS agent be telling a private Canadian businessman in Russia who to do business with? Just as peculiar, why would the businessman comply? Both of these unorthodox business arrangements ended up in court with Jacobson as plaintiff in each case.
One of them, a joint venture with Anatoly Rozenberg and his company Sealand Petroleum, was settled. Jacobson claimed that the settlement was reached after he complied with a request from Robert Fluke to remove all references to CSIS from the lawsuit.
But the second deal, brokering an arrangement to sell Russian medical isotopes to a Toronto company, proved more intractable to settle. Jacobson claimed that he did not name CSIS in his pleadings at the request of Fluke. But when Fluke allegedly asked him to discontinue the lawsuit against the second company, Jacobson refused. Even though Fluke had not been named in the action, his name came up in the discovery process.
According to Jacobson’s statement of claim, “During the conversation, Fluke advised that he was aware that it was critical to the success of Jacobson’s business to be able to obtain visas so that Russian businessmen could travel to Canada … Fluke also advised Jacobson that he could place a negative report in the central government computer about Jacobson that would scuttle any further visa applications by Jacobson.”
Jacobson, who claimed that he was coerced into paying part of the rent on Fluke’s condominium and making small presents to the agent’s family, continued with his lawsuit against the Toronto company. Immediately after the CSIS agent allegedly suggested he could block visa applications for Jacobson’s foreign associates, something strange happened: for the first time in eight years, a routine request for visitors’ visas for Russian businessmen interested in coming to Canada and doing business with Jacobson was refused by the Canadian Embassy in Moscow.
According to Jacobson’s statement of claim, the responsible embassy officials “refused to issue the visas due to a false, negative report about the plaintiff placed on the Government’s computer network system through CSIS by Fluke … the Royal Canadian Mounted Police approved the request for visa clearance … The visa clearance was never granted only due to the conduct on the part of CSIS, and specifically on the part of Fluke.”
As a result of the visa denial, one of the Russians involved, Leonid Tarasenko of JSK Nefto-Service, opted to make a deal with a German supplier and Jacobson lost the deal. Even though the two other Russian businessmen involved eventually got their visas, it took months. By then, they too had decided to deal with a German company. Other Russians who were refused visas included the Chairman of the Federal Industrial Bank from Uzbekhistan and the General Director of the Liksar Vodka Company.
Jacobson fixed his business losses at millions of dollars, including the loss of credit lines at the EDC and the CCC totaling $64 million because both agencies were allegedly aware of the damning CSIS report about him. In his lawsuit against the Attorney General of Canada, which included several amended statements of claim as Jacobson gathered new information, his settlement demand went from $5-million in 1998 to $50-million by 2004, and a further $1 million in punitive damages plus legal costs.
Jacobson’s lawsuit wasn’t restricted to lost contracts. He was also suing over loss of reputation, defamation, and the violation of his rights under Section 7 of the Charter of Rights and Freedoms.
Jacobson claimed that two companies he had represented in Russia and the Ukraine, Thermo Tech Technologies Inc. and Global Technologies, had decided to appoint him President and director. Before doing so, it was decided to conduct a due-diligence check. The president of Thermo Tech, Owen Anderson, allegedly reported to his management team in September 1998 that a representative of CSIS had advised him against appointing Jacobson because it could create a “scandal”.
According to Jacobson’s statement of claim, Anderson was told by CSIS that “Jacobson is heavily involved in criminal activities, specifically, narcotics, representing the Russian mafia in Canada, bringing over Russian members of the mafia to Canada – and other criminal activities. Jacobson is under close scrutiny by CSIS who are planning to arrest Jacobson in the near future.”
The directors who heard Anderson’s report at their 1998 meeting and whose names appeared in Jacobson’s statement of claim, initially decided not to give him the executive appointments.
When Jacobson was informed of their decision, he demanded an apology from Anderson and full disclosure of the person at CSIS who had uttered the alleged defamations. Anderson demurred through legal counsel, claiming a “qualified privilege” to the information. But in Jacobson’s amended statement of claim in 2003, he said that Anderson changed his story.
“Anderson subsequently advised, as did the Attorney General of Canada, that there were two representatives of CSIS at the meeting with Anderson, Jennifer Joseph and Cherie Henderson. Mr. Anderson is not certain which of these officers made the disparaging remarks about Mr. Jacobson, including a statement that she ‘wouldn’t touch him with a ten foot pole’ when asked if she would do business with Jacobson.”
Anderson was dropped as a defendant from the lawsuit and replaced by the two CSIS agents, who, oddly enough, were named in a statement of defense by the Crown.
Jacobson had commenced the legal action as a last resort. At the beginning of his visa difficulties in 1997, his lawyers had formally complained to the Attorney General of Canada about the alleged situation. Oddly, there was no reply to his serious complaints. Jacobson claimed that Fluke then told him “that he was aware of the letter [to the AG] and that Jacobson should not waste his time as nothing would be done since CSIS would simply use the excuse that this was a matter of national security and therefore nothing would be done.”
Jacobson travelled down another avenue to try to solve his problem with the Canadian government. He took his case to the First Secretary at the Canadian Embassy-Visa Section in Moscow. He asked Douglas Agnew to contact the RCMP Joint Task Force on Eastern European Crime to verify Jacobson’s good reputation.
According to Jacobson’s statement of claim, “Subsequently, Agnew advised that he had contacted the RCMP and received a positive report about Jacobson. He further indicated, however, he would have to proceed on a case-by-case basis [visa applications] given the fact that there was still this negative report on the system from CSIS. Agnew advised Jacobson that the report contained very damning information about Jacobson.”
(Jacobson claimed that Fluke had originally told him that if he dropped his legal action against the Canadian isotope supplier, the alleged CSIS report could be removed from the government’s computers in fourteen days, a claim, like all the others, that Fluke denied.)
There was one other critical component to Jacobson’s allegations against the Canadian government when he went to court. He claimed that not only had a false report been entered into the government’s computer system by CSIS, but that the report had been shared with Russia’s Federal Security Service, (FSB), the intelligence successor to the Soviet-era KGB.
This in turn led to a major, and according to Jacobson, damaging investigation into his business activities by Russian authorities. At one time, Jacobson employed 1,800 workers in Russia, the Ukraine and Belarus, built eight fuel terminals and 600 gas stations. The impression was being created, falsely and maliciously according to Jacobson, that his company, The West Group Inc., was up to no good.
Jacobson also complained about the toll on his private life caused by the government’s stealth attack on his reputation:
“I have had to with visit a psychologist and psychiatrist due to the serious depression I was suffering as a result of these wrongful acts. My relationship with my wife has suffered such severe strain that our relationship almost ended. I have suffered tremendous stigmatization, loss of privacy, incredible stress and anxiety far beyond anything inherent in the failure of an ordinary business arrangement as a result of this conduct on the part of the Government of Canada…”
The Attorney General of Canada responded to Jacobson with a farrago of denial, delay, official secrecy, and legal pettifoggery – including the claim that because the businessman hadn’t commenced his action within six months of the alleged damages, he had missed the statutory window to take legal action. The bureaucratic boa constrictor was squeezing tightly around information the plaintiff requested to support his case.
In its statement of defense on behalf of all the defendants, the Attorney General of Canada denied virtually all of Jacobson’s allegations with one exception. The AG admitted that his office had not responded to a formal complaint from Jacobson’s lawyers in 1997 about the visa refusals and the alleged involvement of CSIS.
The government specifically denied that a “false” report had ever been placed on its computer system by agent Fluke, or that the alleged report had been shared with Russian intelligence. It also denied that the two other CSIS agents named in the action, Joseph and Henderson, had defamed Jacobson to Owen Anderson. The AG went on to raise the issue of security certificates, the legal tool of choice in national security matters to withhold or redact documents, in an attempt to block Jacobson’s access to information.
Under Section 37.(1) of the Canada Evidence Act “a Minister of the Crown in right of Canada or other official may object to the disclosure of information before a court, person or body with jurisdiction to compel production of information by certifying orally or in writing to the court, person or body that the information should not be disclosed on the grounds of a specified public interest.” Jacobson objected to the government’s motion and battled on.
The action moved at a snail’s pace, with the government opposing Jacobson’s multiple amended statements of claim and missing agreed-upon dates for providing documents. Jacobson had this to say about Agent Fluke in a sworn affidavit:
“Mr. Fluke, the former head of the Russian Desk for CSIS, has been suspended from CSIS permanently. Mr. Fluke was charged with accepting a benefit after a nine-month investigation by the RCMP. Mr. Fluke was suspended immediately when the charges were laid in June 1998, and even though the charges were stayed by the Crown Attorney in September 1998, Mr. Fluke was still suspended from his work at CSIS … The charge also indicated that I had provided a benefit to him although I only provided this benefit to him as I was coerced into providing the same, which consisted of providing a portion of the rent for his condominium on a monthly basis and also providing some small inexpensive gifts such as a playpen for his daughter and a mini-stereo…”
Pending the outcome of mediation, the stage was set for a bombshell court case pitting one of Canada’s leading businessmen against the domestic spy agency and several crown corporations – all of it to be played out on centre-stage of the Canadian media universe, Toronto.
And then, nearly six years after it had begun, the Jacobson’s lawsuit was suddenly dismissed without costs on a motion brought by the plaintiff and agreed to by the defendant. The case was settled out of court, though no record of a settlement could be found on the public accounts either under government departments or lawyers of record.
Jacobson’s allegations against CSIS, EDB, and CCC were never established in court, nor were the Attorney General’s blanket denials of any wrongdoing that caused harm to Jacobson’s business operations. Since CSIS and the other Crown Agencies involved in the action were blameless, Jacobson wasn’t entitled to a dime of damages – or so the government argued.
(Justice minister Rob Nicholson’s office declined to comment on the settlement, claiming that inquiries should be directed to the lead agency in the matter, CSIS. CSIS spokesperson Tahera Mufti said the terms of the settlement were “confidential” and suggested an alternate source: Jacobson, whose whereabouts has been a matter of speculation.)
Notwithstanding the murkiness in which the lawsuit was resolved, Jacobson got right back to business before the legal dust settled. By May, 2004, they were talking in Israel about the dynamic businessman’s latest venture, an online pharmacy called MagenDavidMeds.com. The idea was to sell drugs manufactured in the U.S. or Israel to American consumers at prices up to 70% lower than at the neighborhood pharmacy.
Jacobson’s marketing focused on Jewish community media. He personally regarded the new business as a “social and Zionist mission.” Many of his elderly customers faced a choice of buying medication, turning down the heat, or going without a hot meal. The whiz kid from Winnipeg was determined to give them another option by becoming a kind of pharmaceutical Robin Hood.
Not everyone was thrilled with his new business. The U.S. Food and Drug Administration frowned on Jacobson’s venture, arguing that it couldn’t guarantee the safety of the imported drugs and charging that the businessman had simply taken advantage of the “Canadian niche,” the price gap between the cost of a particular drug in Canada and the U.S., where pharmaceutical prices are market driven. Pharmaceuticals are the most profitable sector in the U.S. economy and Jacobson was obviously rocking the boat.
And there was another new direction for this Canadian entrepreneur; the security business. Jacobson’s long-running battle with the Attorney General of Canada, including his confession that he had made regular payments to a CSIS agent, didn’t appear to limit his extraordinary access to some of the most sensitive intelligence issues in Canada.
In March 2006, three months after the Harper government took office, Jacobson was given access to do a four-day, independent security assessment of the oil sands with a team of experts paid for and provided by him. The six-member team included Alan Bell, former British SAS officer and president of Toronto-based Globe Risk Holdings; James G. Liddy, the son of Watergate’s Gordon Liddy, and a former leader of the U.S. Navy’s Antiterrorism Assessment Team; and Alon Moritiz, an Israeli computer expert.
Bell had already designed security protocols and armed tactical teams for Ontario’s nuclear reactors. He wasn’t impressed with what he saw: “You can’t have a $9-an-hour security guard protecting this kind of asset,” he told the Edmonton Journal. With 10 Muskoka-sized lakes full of highly corrosive toxic waste at the oil sands, a breach in one of the containment berms could produce what Jacobson told an Alberta cabinet minister would be “an environmental holocaust.”
So how did a businessman with no obvious expertise in security matters gain access to the oil sands with a team that included foreign experts? One potential explanation is Jacobson’s own declaration of his board memberships, which included The Mackenzie Institute.
When contacted about Jacobson’s involvement in the organization, Editorial Director John Thompson said “I can’t comment on that.”
The Mackenzie Institute bills itself as an “independent non-profit organization” concerned about political instability and organized violence. The institute’s July 2012 newsletter #88 compares the rise of the Muslim Brotherhood in Egypt to the rise of Hitler in Germany. The conservative think tank was founded in 1986 by Maurice Tugwell, a dashing veteran of British intelligence whose missions stretched from Palestine to Northern Ireland over a decades-long career. Tugwell was an expert in the use of propaganda.
Occasionally, the truth got in the way of his spin.
As head of the Information Policy Unit in Northern Ireland from 1971 to 1973, he falsely told the BBC that four of the people murdered by Britain’s Parachute Regiment in Derry on Bloody Sunday, sometimes known as the Bogside Massacre, were on a list of wanted men from the Irish Republican Army.
They were not. In fact, all 14 of the people killed, as well as the 12 who were wounded that January day in 1972, were unarmed civil rights marchers. Tugwell later apologized for his false statements after the Saville Inquiry, which heard from over 900 witnesses, established the innocence of all the murdered marchers. That finding wiped out the conclusions of an earlier inquiry that had whitewashed the troops’ actions and the government’s cover-up, a process in which Tugwell’s misinformation had played a key part.
According to people who know both the prime minister and the organization, The Mackenzie Institute is well known to Stephen Harper from his time as vice-president and then president of the National Citizens Coalition, (NCC), as well as time spent in elected office.
In the early days of its existence, the fledgling Mackenzie Institute shared office space with the NCC. While he was writing his book about peace through power, Tugwell was given an office within the NCC premises. “That was before Harper’s tenure, but he was certainly aware of The Mackenzie Institute. After all, there are only six true conservatives in Canada!”, a former NCC employee quipped.
The Mackenzie Institute website has several pictures of the Prime Minister: Stephen Harper in conversation with Mackenzie Institute officials in 2006; a portrait of a smiling prime minister with the Chair of The Mackenzie Institute a month after Harper won his majority government, “subsequent to a briefing to the Prime Minister about the security of Canada’s infrastructure”. And a 2010 photo of Mackenzie Institute board member Nathan Jacobson, “Nathan enjoying some levity after a meeting with visiting Israeli prime minister Benjamin Netanyahu and Canadian prime minister Stephen Harper.
That picture of Jacobson between the two prime ministers disappeared from the Mackenzie Institute web site just prior to the publication of this article.
“The prime minister may have met with Mr. Jacobson at a community event, as he meets thousands of Canadians from all walks of life each year,” asserts the PMO?
One picture is worth a thousand press secretaries.
Nathan Jacobson, Jason Kenney and the representative of Dalton McGuinty at Israel rally in Toronto
The rally at the Canada Christian College. Organized by B’nai Brith, its purpose was to express the protest of those who stand for Israel, against the unilateral declaration of Palestinian statehood. Source
Seems to me that the Conservatives, know Nathan Jacobson rather well after all. Seems they are rather close to this man.