04/26/2012 05:13 EDT | Updated 06/26/2012 05:12 EDT

Julian Fantino Denies Offshore Bank Accounts: Alleged Cayman Cash Leads Ethics Czar To Consider Probe

OTTAWA - The ethics watchdog is deciding whether to probe a Conservative cabinet minister over allegations he did not disclose bank accounts in the Cayman Islands.

But a spokesman for Associate Defence Minister Julian Fantino insists he does not have any offshore accounts.

"The allegation is completely false," Chris McCluskey said Thursday. "The minister has complained to the RCMP about possible mistaken identity, or identity theft."

So far, conflict of interest and ethics commissioner Mary Dawson's office is saying little about the matter.

"We can confirm that the Office of the Conflict of Interest and Ethics Commissioner has corresponded by email with Mr. Lorello and received the information provided by Mr. Richard Lorello," spokeswoman Jocelyne Brisebois said in an email.

"The information was forwarded to the investigations unit in March 2012. The commissioner is currently gathering further information to conduct an assessment of whether sufficient grounds exist to proceed to an investigation in this matter."

A chain of emails shows Dawson's officials have been corresponding since early March with former Conservative candidate Richard Lorello over documents that purport to show bank accounts and wire transfers under the minister's name.

Lorello ran unsuccessfully for the Conservatives in Vaughan, Ont., in 2008. Fantino subsequently won a 2010 byelection to become that riding's member of Parliament. As the associate defence minister, Fantino is in charge of buying military equipment.

Lorello later resigned from the Conservative riding association in Vaughan over what he says were concerns about a multimillion-dollar government grant to the Vaughan Health Campus of Care.

He and two other ex-members of the riding association are embroiled in a bitter dispute with the current local executive. The three former riding association members have all sworn affidavits alleging possible irregularities in Fantino's byelection and 2011 federal election campaigns. Elections Canada is reviewing those complaints.

Fantino's office has denied the allegations.

Last year, Lorello says someone sent him documents that purported to show Fantino had several Cayman bank accounts. The documents purport to be UBS Wealth Management monthly financial statements in Fantino's name, which show a combined amount of US $321,978.59 in three Cayman bank accounts.

Another wire transfer purports to show US $50,000 was transferred from RBC Bank in Nassau, Bahamas, to RBC Private Bank in the Cayman Islands.

The minister has not disclosed any offshore accounts in his conflict-of-interest declaration for the ethics commissioner's public registry.

Lorello sent the documents to the ethics commissioner and the Canada Revenue Agency. He says he does not know whether the documents are real or fake, nor is he alleging any wrongdoing. He says he simply wants the ethics commissioner to look into the matter.

A Canada Post tracking slip shows a package sent priority shipping from Vaughan arrived in Ottawa on March 16.

Investigator Marie-Josee Smith emailed Lorello 11 days later.

"I have been assigned to review your complaint and the Commissioner has been briefed on your complaint," she wrote.

"In order to determine the legitimacy of the documents that you have provided, could you please indicate the source of your information?"

Lorello replied he received the documents from an anonymous sender.

"I am assuming that the documents were sent to me because of my involvement in other issues that were exposed over the past year and were reported nationally in the media," he wrote.

"As I stated in my letter, I am not able to verify as to whether the documents are authentic or not, nor am I alleging any wrong doing. However, due to the nature of the material I feel that the material should be authenticated to be true or false."

Lorello and Smith exchanged several more emails that day. She indicated that she could not update him on steps the ethics commissioner's office was taking. Smith did say she could tell Lorello when the matter is closed.

Lorello followed up again on April 5. A week later, Smith replied that the matter was still "under review." The case has been assigned file number 8-10-(2012-06), alternately listed as CRM:0046001.

Last week, Smith emailed Lorello to say she needed more information about the documents. A telephone call was scheduled for April 18 between Lorello, Smith and Eppo Maertens, director of reports and investigations.

Lorello says the call lasted about 20 or 25 minutes. He declined to give investigators the email address of the person who sent him the documents.

"Although I do not know the source, I cannot provide the email address of the source either, due to the fact that I would be betraying a trust and the source does not wish to come forward at this time," Lorello wrote to Smith after the call.

"The source has provided the information to me in good faith and I as a citizen have provided the information to the proper Canadian authorities, including the Office of the Ethics Commissioner because I feel that it is my duty to do so."

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