CANADA

Business as a hobby

MARY JANIGAN November 17 1986
CANADA

Business as a hobby

MARY JANIGAN November 17 1986

Business as a hobby

The key witness wore a blue suit, a pinstriped blouse—and a forced smile. After more than 17 weeks of hearings, Noreen Stevens finally testified last week at the inquiry into conflict-of-interest allegations against her husband and business partner, former industry minister Sinclair Stevens. Despite her reluctance to discuss private business in public, Stevens insisted that her husband never helped

manage the family firms after he was named to the cabinet in 1984. But she did concede that he joined a complex plan to market what she called a “Christ coin” to commemorate the 2,000th birthday of Jesus. “This type of conceptualization is our hobby,” she said. “A lot of people talk about weather. We talk about concepts.”

In clipped tones, Stevens declared that she never told her husband about

the operations of their financially troubled holding company, York Centre Corp. She also denied mentioning a $2.6-million loan that she negotiated in 1985 from Toronto businessman Anton Czapka, a cofounder of the auto-parts firm Magna International Inc. In that same year Magna received $13.9 million in grants from Stevens’s department. “My husband was in cabinet,” she told the inquiry chairman, Ontario High Court Judge William Parker. “I knew he shouldn’t and wouldn’t be having anything to do with any of the companies.”

But the minister did participate in a plan to involve the Vatican in a coin-marketing operation. Before he entered the cabinet, Stevens pioneered the sale of strip bonds through a company in his York Centre group. Sales of strip bonds—financial instruments in which the coupons are sold separately from the bond—boomed until the November, 1981, budget decreed that income tax would have to be paid every three years on accrued interest.

The tax, Stevens told the inquiry, could be avoided if investors bought a gold coin redeemable at a fixed rate in the year 2000. The coin might then be sold to collectors for more than the fixed rate. Because the coin’s true value would not be known until that time, she reasoned that Ottawa would not levy taxes. Stevens asked her husband to call Emmett Cardinal Carter, Roman Catholic Archbishop of Toronto, in December, 1985, to ask for the Vatican’s help in marketing the coin. At a meeting in New York that same month the couple also asked Chase Manhattan Capital Markets Group to guarantee the value of the coin. During the meeting, she said, both public and private business were discussed.

According to the Stevenses’ plan outlined in a letter to Carter, the couple intended to sell the coins for about $400. Each carried a guaranteed value of $1,350 in the year 2000. The holder was to receive an annual return of 8.15 per cent on the investment— and strip bonds would back that guarantee. Stevens insisted that there was no conflict of interest when her husband phoned Carter because “the business would be a hobby.” When commission counsel David Scott referred to the plan as “a business idea, the bottom line of which is profit,” Stevens retorted, “We would hope so.” But the plan collapsed. Chase Manhattan rejected the idea, and the Vatican said that the plan violated its agreements with the Italian government. Judge Parker must now decide how much the hobby damaged a political career.

-MARY JANIGAN in Toronto