THE HIGH ROLLER
Pausing for a moment to rub his eyes against the blinding brightness of the afternoon Mexican sun, Walter Wolf pawed the ground, then charged forward. Seconds later, he split the water cleanly and resurfaced from his dive right in the middle of his “W”-shaped pool. After climbing out, several feet from his outdoor, “W”-shaped Jacuzzi, he rubbed his eyes again, surveyed the view of Acapulco Bay below him and sighed audibly.
“Down here,” said Wolf,
“down here is the one place where I really relax.” With his $1.25-million villa behind him, and such neighbors as Frank Sinatra, Spanish singing star Julio Iglesias and Henry Kissinger living around him, Austrianborn Canadian multimillionaire Walter Wolf can afford to feel at home. He is far from the persistent questions surrounding his controversial business and political connections in his adopted country, and an equally long way from his own impoverished beginnings.
Enigma: With residences in half a dozen countries, high-profile friendships with such stars as former Beatle George Harrison and Pierre Trudeau and a nonstop lifestyle, the 45year-old Wolf is a mystery man on the Canadian business scene, moving too fast to be pinned down. He travels about 300 days and a million miles a year, supervising his multitude of business interests. These range from oil brokerage services in Nigeria to high-tech deep-sea diving systems in Canada to a line of men’s sportswear which, like virtually everything he owns, bears his distinctive red “W” crest with a stylized drawing of a wolf inside. But Wolf, a celebrity abroad whose face
adorns 20-foot billboards advertising his menswear in Tokyo, remains an enigma in Canada, where his political and business dealings have been embroiled in controversy for the past year.
Wolf shot to unwelcome prominence in Canada last February when former Tory power broker Dalton Camp named Wolf as a major “offshore” financial
backer of the anti-Joe Clark movement that surfaced prior to the 1983 Conservative leadership review. Since then the name of the once-penniless young refugee from war-torn Austria has been repeatedly linked with the country’s top Conservatives, including Prime Minister Brian Mulroney. Newspaper reports have suggested that Wolf may have con-
tributed up to $250,000 to the dissidents’ cause. Adding to the controversy, in the past nine months there have been several highly publicized break-ins at the offices of a Wolf company and at those of prominent Montreal Tories by people who appear to be seeking documents related to Wolf’s alleged involvement with the party. Indeed, last week Maclean's learned of another Tory-related break-in at the Montreal home of party fund raiser and lawyer David Angus which occurred last March (page 18).
In fact, it seemed that anything Wolf touched was destined to attract notoriety. For one thing, controversy swirled around his involvement with the faltering Halifax resource firm East Coast Energy Ltd. —started by Mulroney aide and close friend Fred Doucet—in which the millionaire, along with Mulroney and other Tories, held shares. For another, critics began scrutinizing his lucrative offshore oil rig servicing deal with Petro-Canada.
Puzzled: Currently, Wolf is involved in a $200,000 legal battle with McLeod Young Weir Ltd., a Toronto brokerage house with strong Tory ties. In a dispute that has pitted Tory against Tory, the securities firm has gone to court over a disagree-
East Coast Energy Ltd. in July, 1983. Claiming that he is puzzled and bitter about the wave of speculation and innuendo, Wolf vehemently dismissed all the speculation concerning potential wrongdoing. But his once-overflowing loyalty to his adopted country has clearly waned.
Wolf recently discussed his activities
ment with Wolf and his personal attorney, Mi chel Cogger-also a close friend of Mulroney -about whether or not the financier sold the se curities firm shares in
in a series of interviews with Maclean’s, conducted in Montreal and Acapulco. In them, he repeatedly denied all allegations of wrongdoing—“either legal or moral”—and he added that the breakins are being staged “by someone who is very jealous of Mulroney and may be making the mistake of thinking they can get at him through me somehow.”
Secret: Wolf’s image problems first began when former Tory party president Camp made a surprise allegation during an appearance on CTV’s Question Period on Jan. 30,1983. Asked about the dump-Clark movement, Camp said: “The evidence is pretty clear that it was lavishly financed by person or persons unknown. I have a good idea where some of that money came from, and some of it came from offshore.” A year later Camp identified Wolf as one of the people to whom he had been referring. Last week Camp told Maclean ’s: “I have said everything about Walter Wolf that I have to say. [His involvement] is a nonstory now. What was at issue was the question of secret funding for the dumpClark movement.” But Camp also said, “I have no reason to retract anything I have said up to date.” He refused to say who his sources were who identified Wolf as a contributor.
Wolf rejected those charges. He said that Camp “not only has no idea what he is talking about, but has his bloody nerve talking about political connections at all. He never got a contract in his life that did not come from political friends.” Wolf insisted that his only contribution to the anti-Clark move-
ment “in any shape or form” was an indirect one: he paid $12,000 in director’s fees to two prominent members of the anti-Clark forces in 1982. The two men were Cogger, who is a close friend and former chief counsel to Mulroney, and former Newfoundland premier Frank Moores, who now has offices in Montreal and Ottawa. Moores, who could not be reached for comment, has previously acknowledged serving as a director to a
Wolf company in Newfoundland, but he denies ever having received money from Wolf. When confronted with the denial, Wolf said, “I can only presume [regarding payment] that Frank has had a memory lapse.” Cogger told Maclean’s that he served as a director for Voyageurs Marine Construction Co. Ltd., a company partly owned by Wolf which is based in a Montreal suburb. (The company offices were one of the locations broken into last spring.) Both Cogger and Wolf described Cogger’s role as a director for the company as “normal duty” for a personal attorney and added that it was not related to his work for the Tories as a Quebec organizer. Said Wolf: “That is absolutely the only money I gave to anyone associated with the anti-Clark movement. And my view is that the money was paid for their professional services, not political activities. Frankly, you do not buy very much of either Cogger’s or Moores’ time for what I paid them.” As to his personal opinion of Clark, Wolf said: “I obviously did not like him and that has never been a secret. I think he was a bad embarrassment for Canada. But I frankly could not be bothered wasting my time or money to do anything about him.”
Timely: Wolf’s other major problem surfaced in April, when McLeod Young Weir sued Cogger, in his capacity as a representative of Wolf, for $200,116.86. The dispute began when Wolf, on Cogger’s advice, spent $500,000 to buy 33,333 shares of East Coast Energy Ltd. in December, 1982. Other investors included Mulroney ($15,000) and Mi-
chael Meighen, former personal attorney to Wolf in the 1960s and a onetime Tory party president ($7,500). Wolf said that he paid for the stock with a cheque for $438,000 (U.S.) drawn on his account at the Butterfield Bank in the Bahamas. The company’s cofounder and chief executive officer was Fred Doucet, now an adviser to Mulroney. The prospectus for East Coast, a speculative company, warned investors that the stock had “limited marketability” and was “not considered suitable for investors who may need to liquidate their assets in a timely manner.”
‘Lawsuit’: Eight months later, with the company rapidly losing money, Cogger told officials at McLeod—who acted as underwriters for East Coast’s initial share issue in 1982—that Wolf wanted to sell all of his stock for $200,000, at a loss of $300,000 on his initial investment. Versions of what happened next differ. McLeod’s officials insist that they agreed to buy the stock at $6 a share on the understanding that Wolf would buy it back at that price whenever the company asked. McLeod’s spokesmen add that they considered the arrangement to be a loan, with the stock pledged as security. Wolf claims that the transaction was a straight sale, with no buy-back agreement. Said Wolf: “I know a little bit more about oil than those Toronto guys. I simply realized early that I had made a bad investment, and decided it was better to lose $300,000 than the whole pile.” Added Cogger: “Walter just told me to dump it, so I did.”
In April McLeod initiated the lawsuit
to recover “money lent plus interest thereon.” McLeod officials refuse any comment until the case is settled. Wolf, who professes a strong dislike for “Bay Street kings” called the company “a bunch of losers who are trying to make a sucker of me. I hope they serve me [with a lawsuit], because they will soon find I do not take these things lying down.” McLeod officials said they feared that if they wrote off the money to Wolf, they would face embarrassing public suggestions that they were trying to curry favor with the Tories. But Conservative sources say that as a result of the suit, McLeod President Tom Kierans, a bluechip member of Ontario’s Big Blue Ma-
chine, has been “frozen out” by Mulroney people who are angry at the negative publicity that the case has brought to a close Mulroney confidant. Stock in East Coast, which once traded at a high of over $15 per share, dropped to less than a dollar last summer.
Idyllic: Wolf claims that he has about 300 Canadian employees, and his business ventures in the country include an oil supply vessel and rig servicing contract with Petro-Canada, worth at least $25 million. But he adds that those operations represent less than 20 per cent of his overall investments. A Canadian citizen since 1965, he no longer maintains a legal residence in Canada, pays no taxes and estimates that in the past few years he has spent an average of one month annually—broken into visits of several days at a time—in the country. Most of that time is spent in Montreal, where he has a permanent reservation for a suite at the Ritz-Carlton Hotel.
Montreal is also the home of his seven-seater Beechcraft King Air turboprop, a five-seater Bell JetRanger helicopter and a newly purchased Mercedes 500 with a specially built, more powerful, engine. But the red Maple Leaf that he displayed prominently on many of his possessions for years—particularly on the cars driven by his Formula One racing team—is now noticeably absent from some of his new acquisitions.
Wolf was not always ambivalent about his adopted country. When he arrived in Montreal, his new home seemed to be an idyllic haven from a childhood of upheaval and loss. Born in Graz, Austria, in 1939, he moved with his family to Yugoslavia, where his father was in charge of building factories for the government. When the Soviets closed the border between the two coun-
tries in 1941 the family was trapped, and in 1943 his father was captured by the Soviets and sent to a prison camp, where he spent the next 11 years.
Wolf, his mother and twin brothers were left to fend for themselves. Wolf said that he helped to feed the family by earning money diving off the coast of Yugoslavia, selling “everything from seashells to scrap iron” and smuggling people out of the country. During the Second World War, Wolf said, “I
learned very early in life what it is to see people die.” Wolf’s 12-year-old cousin was killed by Yugoslavs venting their anger at anyone speaking German. At one point, he said, he accumulated a suitcase full of dinars (Yugoslavian currency), only to throw it out later “because I was afraid of what would happen to me if I was caught spending it.” ‘Sullen’: In 1954 the Soviets released Wolf’s father. The family, bearing two suitcases containing all their belongings, left Yugoslavia to meet him in a Displaced Persons’ camp in West Ger-
many. Wolf, then 15 with little formal education, got a job as an apprentice aircraft mechanic. He stayed in West Germany until 1959, when he emigrated to the United States. There, he spent seven months in New York working at odd jobs before moving to Montreal. When he arrived in Canada in 1960, he said, he had $7 in his pocket and spoke so little English that the only thing he could order and afford in restaurants was chicken soup once a day.
He spent his first three winters in Quebec’s Laurentian mountains as a ski instructor, where a fellow teacher remembers him as “a sullen sort of scrounge that we did not want anything to do with, and who did not want anything to do with the rest of us.” During summers Wolf worked as a hospital orderly and on construction gangs while living in Ottawa. He picked bottles off the street to raise money to eat and he says that in one construction job, “I had to quit after four days to get my severance money, because I could not wait for two weeks for a cheque to get food.”
In early 1963, during a visit to Montreal he met Colin Keillar, a partner in K.D. Marine Ltd., a diving company specializing in pipeline construction. He persuaded Keillar to give him a job as a laborer and diver. At the same time, on a ski trip, he met and quickly married his wife, Barbara Stewart. They had two daughters but have since separated (page 17). She is the daughter of J.D. Stewart, the president of Northumberland Ferries Ltd. in Prince Edward Island. With his father-in-law as a connection, he borrowed $25,000 and bought a one-third interest in K.D. Marine.
Wolf refuses to give many details on how he accumulated his wealth. In fact, even Wolfs close friends say that they are not entirely sure where his fortune originated. Said Michael Meighen, who first met Wolf at a stag party in 1965: “I can tell you that Wally has lots and lots of money. But I cannot for the life of me tell you where it came from.” Wolf walked into Meighen’s office the day after the stag and asked him to become his personal attorney. Meighen introduced Wolf to Cogger, who in turn led him to Mulroney. But although Wolf describes Meighen and Cogger as “important, loyal, close friends,”he is more reticent about Mulroney. He calls him “an associate, not a friend.”
Wolf gradually assumed full control of K.D. Marine by accepting reduced wages in return for shares as the company first lost money and then finally began to make a profit in 1965. He said that he was able to turn the firm around because “there were not a whole lot of diving companies in Canada, so there was business. And frankly, Keillar is a nice man but I was a better, tougher businessman than he.” Wolf has also said that he expanded operations into the Maritimes in the mid-1960s.
Skyrocketed: K.D. Marine expanded quickly. In swift succession John Bourne, the chairman of Atlas Construction Ltd., loaned the company $300,000 for the creation of a deep-sea diving system. Then, in 1969, Shell Canada Ltd. signed an agreement to use the system for work exploring for oil off Canada’s east coast. In 1970 Wolf, then K.D. Marine’s sole owner, signed a $100million, five-year contract with Shell for six deep-sea diving vessels.
At roughly the same time, Wolf said that he decided to turn his growing company into an international venture. As well, the company’s involvement in maintaining oil rigs for companies such as Texaco Canada Inc. had led him to develop worldwide contacts in the oil business. Afterward, he said, he obtained a contract as an energy broker for the government of Nigeria. In 1973, just before the world oil crisis, Wolf purchased a tanker full of crude oil that he planned to sell himself. Then, prices suddenly skyrocketed and Wolf found himself a very rich man.
In 1972 Wolf became a tax exile from Canada, establishing a base at a villa in Lugano, Switzerland. By 1975 he had bought a ski chalet in Austria, a villa in France and a townhouse in London. Whenever possible, Wolf said, “I paid cash down on the spot. I do not like to borrow money, and I do like to be in full control of whatever I do.” By 1977 he owned two Lamborghinis, a Mercedes, a Rolls-Royce, a Ferrari and a helicopter—and he added a home in Bermuda, where he established an
account with the Butterfield Bank.
In 1977 Wolf invested $1 million in establishing the Formula One Walter Wolf Racing Team, and he bought the best people and equipment available for it. His hand-built cars, sporting a Canadian flag, were constructed at a factory that he built in London, England. With top-ranked South African driver Jodie Scheckter at the wheel, Wolf’s team stunned the racing world by immediately winning the Argentinian
and Monaco Grand Prix. Later in the same year the team added a win in the Canadian Grand Prix in Mosport, Ont.
After two years and a total investment of more than $2 million, Wolf got out of professional racing. By that time, his racing exploits —coupled with friendships formed with such stars as rock singer Rod Stewart and racing driver Jackie Stewart—gave him the personal prestige that allowed him to begin marketing a successful Wolf line of aftershave lotion in Europe. In the past five years the line, expanded to
include other accessories, has grown to sales of more than $6 million.
Throughout the 1970s Wolf kept in touch with events in his own country through a series of infrequent and often unexpected visits. In 1976 he appeared in Mulroney’s booth at the Tory leadership convention, sitting next to Cogger. Mulroney lost that race for the leadership, and Wolf said that he sat there to be with Cogger while he waited for Meighen, who was the president of the convention. He said he had “no particular preference” for who won.
In 1980 Wolf met the man whom he now calls “the greatest Canadian statesman in history”: Pierre Trudeau. While on a trip to Europe, Trudeau was stranded by a snowstorm in a villa in Lech, Austria. The owner of a neighboring villa was another itinerant Canadian, Walter Wolf. The two men met and developed an immediate rapport. Wolf, who describes himself as “an ardent free enterprise capitalist” with great admiration for President Ronald Reagan, had often told friends that he considered the Prime Minister to be a“no-good socialist.” But after their meeting he began to hail Trudeau as a “visionary who helped save Canada.”
Since 1980 Wolf has continued to shift his holdings, while maintaining the same aura of mystery about many of them. He will not say how much he is worth. Some analysts have estimated his wealth to be in the hundreds of millions of dollars, but, said Wolf, “That is absurd.” A more likely estimate is that his personal holdings are worth between $30 million and $40 million, while his oil brokerage deals bring in millions more. Wolf brushed olí a request to list his complete holdings. “There are so many it is hard to keep track of them,” he said.
Embroiled: In 1983 he sold the British arm of his diving contracting company, K.D. Marine (UK) Ltd., and associated companies, to a British firm for $8 million (U.S.). He renamed his Canadian operation Wolf Offshore Transport Ltd. The company supplies Petro-Canada with two ice-class vessels, the Seawolf 101 and Seawolf 102, which service drill rigs, tow icebergs and supply equipment for offshore drilling. Petro-Canada leases the boats at a cost of $10,890 a day each on a four-year contract that is worth at least $25 million. Last March Wolf became embroiled in controversy when Petro-Canada fired one of its employees, Miles Everett, who had used Wolf’s 30-foot fishing boat, the Luxor. Everett had also paid the insurance premiums on the boat while Wolf was out of the country, and Wolf said that the insurance broker mistakenly listed Everett as the registered owner because his name was on the cheque. Said Wolf: “It is true Miles is a friend and used the
boat, but I did not get to where I am by giving boats to anybody.” For his part, Everett pointed out that he did not do any business favors for Wolf, whom he described as a good friend.
Cooling: The biggest deal Wolf is currently working on is a $2-billion oil brokerage arrangement with Pemex, the Mexican government-controlled oil company. Wolf said he is “very close” to persuading the government to sell 70,000 barrels of oil a day to supply an Italian refinery. Wolf, who met with Pemex and government officials in Mexico City two weeks ago, stands to make a commission of five cents a barrel, for an annual income of about $1.3 million.
Wolf’s feelings toward Canadaemdash;and especially the new Tory government emdash;are ambivalent. He still professes a deep love for the country and he says that when he is in Europe, “the first thing I tell anyone about myself is that I am Canadian.” But he adds that he is “furious and bitter” at media treatment of his relationship with the Tories. Because of the controversy, some key Tories in Ottawa have privately told the Prime Minister to distance himself from Cogger, who was once regarded as Mulroney’s best friend and most trusted aide. Although Cogger still frequently speaks with Mulroney and the two men insist that their friendship is as strong as ever, one friend of both men said there has been “a definite cooling-off between them. The friendship is now more based on their past rather than on their present.”
For Wolf, who puts a high price on
friendship, that is inexcusable. He declared: “Mike [Cogger] has been the best, the most loyal and dedicated friend and associate I could have. In all my life I have only seen such devotion once before, and that is the way Mike has been toward Mulroney. I do not think he should be rewarded by some people trying to shut him out, and I will not forgive those who are trying to do it.”
That same powerful range of emotions spills over into Wolf’s private dealings with people. He is contemptuous of
those whom he describes as “the kings of Westmount and Bay Street, the kind of people who think that because they are born with everything, they never have to do anything.”
Bruised: Many questions concerning Wolf’s business and political connections still have not been properly answered. Wolf’s dispute with McLeod Young Weir will be settled in the courts, although both sides have already suffered from publicity surrounding the case. Camp has refused to say why he identified Wolf as an anti-Clark contributor, and there has not been any subsequent evidence to link Wolf with the movement. As well, Montreal police and the RCMP have not been able to establish who engineered the four break-ins at the offices of Wolf and prominent local Tories.
Clearly, Wolf is convinced that any connections between him and the Tories have dried up. Now, he says: “I would not even waste my time bidding on a government contract. I do not need the trouble, and even if I were the best, I would not get it.” He adds that he is “tired of trial by media, where they take my name, a little bit of my background, and stick it in stories that have nothing to do with me.” Still, despite the controversies, his bruised feelings and his resentment toward his treatment in his adopted county, Walter Wolf says he isemdash;and remainsemdash;“a lover and believer in Canada, the real Canada outside this bullcrap.” But even when he is thousands of miles away from the controversies and the questions, sunning himself at his poolside in Acapulco, the aura of mystery and power continues to shadow him.lt;ÿ