Panama Papers confirm Canadian billionaire and university benefactor as mystery man in global bribery case

He has hobnobbed with the Queen and Bill Clinton. Donated a small fortune to Canadian universities. Runs a billion-dollar global business empire. And glides effortlessly in the highest echelons of corporate and political power.

Now, a joint CBC/Toronto Star investigation based on the Panama Papers provides the closing chapter in a years-long saga involving Canadian tycoon Victor Dahdaleh, which saw him battle criminal charges and a billion-dollar lawsuit on two continents over an international bribery scandal — all the while forging close ties with a trio of Canadian universities.

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The huge leak of offshore financial records reveals Dahdaleh, a 72-year-old Jordanian-born metals magnate, is indeed, as long suspected, the mysterious middleman known in U.S. court documents as "Consultant A" — described as having handed out tens of millions of dollars in inducements to officials at a Persian Gulf smelting company in exchange for supplier contracts that went to one of the world's biggest aluminum conglomerates.

Dahdaleh denies any wrongdoing and was acquitted in a British criminal trial, but his client, a unit of aluminum industry heavyweight Alcoa, pleaded guilty to a U.S. bribery charge in 2014 as a result of the scandal. With its parent company, it paid one of the biggest-ever anti-corruption penalties in American history — $384 million US.

The settlements between the U.S. government and Alcoa describe "Consultant A" as follows:

• Starting in 1989, Alcoa's Australian subsidiary hired Consultant A to help secure a long-term contract to supply an aluminum ingredient called alumina to Bahrain's national aluminum-smelting company, Alba. "The relationship with the consultant was designed to generate funds that facilitated corrupt payments to Bahraini officials," according to agreed findings in the case.
• By 2002, instead of invoicing Alba directly, Alcoa of Australia was routing the paperwork through two offshore companies controlled by Consultant A called AAAC and Alumet. AAAC marked up the price of the alumina to Alba by $79 million US between 2002 and 2004.
• Beginning in 2005, Consultant A's companies bought alumina from Alcoa of Australia and sold it onward to Alba, pocketing a mark-up of $188 million US through 2009, though never actually handling any of the material.  
• Consultant A used some of the mark-up revenues "to enrich himself" and some to make "$110 million in corrupt payments to Bahraini officials." Recipients included a senior Bahraini official, directors and management of Alba, and a senior member of Bahrain's royal family.  

The Panama Papers leave no doubt Dahdaleh is the wheeler-dealer Consultant A. Among the leaked records is a March 2007 email he sent to Panamanian law firm Mossack Fonseca, where he declares: "This email confirms... my capacity as the owner and director of Alumet," one of the offshore companies used to route the alumina. Numerous other files identify him as Alumet's owner.

• Read the email from the Panama Papers

Dahdaleh was never charged in the U.S., but was charged with eight counts of corruption, conspiracy and money-laundering in Britain, where he lives, in 2011.

At one point, a judge found he had breached his bail terms by meeting with a prosecution witness (the Crown alleged witness intimidation), and Dahdaleh had his bail temporarily revoked and was sent to jail for a month.

Ultimately, he was acquitted in 2013 when the case against him collapsed. Unrelated to the earlier witness meeting, two key prosecution witnesses failed to show up to testify and another changed his evidence.

Dahdaleh's defence never denied he paid the inducements but, under a U.K. criminal doctrine known as "principal's consent," said the payments weren't corrupt or illicit because they were known about and approved by Bahraini officials and were part of normal business practice at the time in the country.

Separately, Dahdaleh settled a billion-dollar U.S. civil lawsuit filed by Alba alleging conspiracy, corruption and fraud by him, Alcoa and another defendant out of court for an undisclosed amount.

In response to questions from CBC and the Toronto Star, Dahdaleh's spokesman Timothy Bell called the outcome of the British court case "final" and said the U.S. plea deals involving Alcoa "do not detract from" it. He added that names were anonymized in the plea deals "for sound reasons of fairness and justice," but did not answer specific questions about Dahdaleh's identity as Consultant A.

"Mr Dahdaleh has never been convicted of any offence in any court in the world," Bell said in an email.

Under a new British law passed in 2010, however, Dahdaleh would not have been successful with the "principal's consent" defence, said Julian Knowles, a British lawyer and expert in commercial crimes.

"It's clear under the 2010 act, even if a public official has the OK from his higher-ups, it's a crime," Knowles told the Star in an interview. "His case is an example of why we changed our law, because there were so many loopholes."

Universities honour embattled magnate

While the legal drama over the Alcoa bribery scandal was playing out in U.S. court since 2008 and in Britain since 2011, Canadian universities continued to honour Dahdaleh.

He personally arranged for former U.S. president Clinton to receive an honorary degree from McGill University in 2009 and was a dignitary on stage during the ceremony, in which he placed the doctoral sash over Clinton's shoulders and then hugged him.

Dahdaleh has also sat on the board of the McGill University Trust, the school's British fundraising arm, since 1995 without interruption and has been a significant financial supporter.

McGill did not reply to questions about when it first learned of the allegations against Dahdaleh and whether it was appropriate for him to have been a dignitary at the Clinton ceremony while facing bribery accusations. The university also did not say whether it has considered dismissing Dahdaleh from the McGill University Trust.

Last December, St. Francis Xavier University in Nova Scotia awarded Dahdaleh an honorary doctorate. The citation mentioned his global business dealings but also his philanthropy, to Canadian universities and other causes.  

The same month, York University in Toronto announced it would create a new Dahdaleh Institute for Global Health after he donated $20 million.

Neither St. Francis Xavier nor York replied to multiple queries about what they knew of the allegations against Dahdaleh and how that might have shaped decisions to honour him.

"There was clearly in this particular case some serious questions about the ethical behaviour of this individual ... I think all the institutions have to practise a bit more due diligence," said David Robinson, executive director of the Canadian Association of University Teachers, which represents 68,000 university professors and academic staff in Canada.

"If there's any concerns about violation of ethical standards or any other legal issues, donations should be rejected. I think it sullies the name of a university or college if it's associated with an unsavoury business or character."

Search the Panama Papers:

• Who's in the Panama Papers? Search the database here
• What's in the Panama Papers database and how to search it

More Panama Papers coverage:

• SNC-Lavalin paid $22M to secret company to get Algeria contracts
• Middlemen between Canada and offshore secrets revealed
• Panama Papers names go public
• RBC to turn over files on Panama Papers clients to taxman
• Iceland PM steps aside over offshore revelations
• Canada's top offshore middleman linked to fraudster

Send tips on this or any other Panama Papers story to zach.dubinsky@cbc.ca