Power Corporation of Canada

Power Corporation of Canada, Inc.
Type	Public (TSX: POW)
Industry	Conglomerate
Founded	(1925)
Headquarters	Montreal, Canada
Key people	James Burns and Michael Pitfield, (CEO)
Products	media, pulp and paper, and financial services
Revenue	CAD 32.8 Billion (2010)
Net income	CAD 907.0 Million (2010)
Employees	15,500
Website	www.powercorporation.com

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Power Corporation of Canada (TSX: POW) is a Canadian company with assets in North America and Europe in a number of industries. These industries include media, pulp and paper, and financial services.

The corporation is known for its active participation in Canadian politics through its relationships and the relationships of the Desmarais family with prominent politicians of all political stripes.

The company was criticized for its links with Canadian politics,^[1] and specifically for its commitment to the defense of federalism in Quebec. Indeed, several former Canadian prime ministers have worked on staff: Brian Mulroney, Jean Chrétien, Paul Martin, etc.

[edit] History

Power Corporation of Canada was formed in 1925 by stockbrokers Arthur J. Nesbitt and his partner Peter A. T. Thompson. Nesbitt served as the company's first president. Power Corporation was created as a holding company to manage their substantial investments in public utility companies involved in the electrical power industry in Quebec's Eastern Townships plus in the other Canadian Provinces of Ontario, Manitoba, and British Columbia. In the latter part of 1930s, the company acquired a controlling interest in Bathurst Pulp and Paper Company Ltd. and in 1938, Canadian Oil Companies Ltd., selling the latter to Shell Oil Company in 1962.

In 1952, Arthur J. Nesbitt was succeeded as president by his son Arthur Deane Nesbitt (1910–1978). The family sold most their interest in Power Corporation to the Paul Desmarais group in 1968 and by 1970 no longer had any involvement.

Power Corporation owns 100% of Gesca Ltee, 66.4% of Power Financial Corporation and 7.1 % of CITIC Pacific.

While it was originally established as an electric utility holding company, under the control of politically connected Paul Desmarais, Sr., the company became a conglomerate with major interests in publishing and the finance industry.^[2] Power Corp is widely described as the power behind the Canadian government and influential elected officials.^[3]

[edit] Corporate governance

Current members of the board of directors of the company are: Laurent Dassault, André Desmarais, Paul Desmarais, Paul Desmarais, Jr., Anthony Graham, Robert Gratton, Don Mazankowski, Jerry Nickerson, James Nininger, Robert Parizeau, Michel Plessis-Bélair, John Rae, Amaury-Daniel de Seze, and Emöke Szathmáry.

Directors Emeritus of the company are: James Burns and Michael Pitfield.

[edit] UN Oil-for-Food Scandal

A U.S. investigation into the UN Oil-for-Food scandal determined that Power Corporation had extensive connections to French bank BNP Paribas, which was selected in 1996 to broker the Oil-for-Food program. Power owned a stake in Paribas through its subsidiary Pargesa Holding SA.^[4] Pargesa Holding SA’s investment portfolio also includes Imerys, a mining entity majority owned by the Desmarais family and Belgian tycoon Albert Frère.^[5]

The Desmarais family and Frère are also the largest shareholders in oil company Total SA, France’s largest oil company.^[6] Total was the subject of a formal investigation by the United Nations in February 2010 for bribery charges concerning oil deliveries from Iraq during the rule of dictator Saddam Hussein.^[7]^[8]

[edit] Politics

The company is controlled by Paul Desmarais, Sr.. Paul Desmarais, Jr. is one of thirty members of the North American Competitiveness Council, a group whose advice directs the policies of Security and Prosperity Partnership of North America (SPP). Additionally, the company has long been a close ally of the Liberal Party of Canada, although former or current members of other Canadian political parties have also worked for Power Corp. A brief summary of the connections between Power Corp. and those with political power in Canada is below.

Former Prime Minister of Canada, Paul Martin, was hired in the 1960s to work for Paul Desmarais, Sr. by Maurice Strong. Martin became President of Canada Steamship Lines, a subsidiary of Power Corp., and in 1981 Desmarais sold the company to Martin and a partner. Martin went on to make his personal fortune as an owner of CSL.

Former Prime Minister of Canada Jean Chrétien sat on the board of Power Corp. subsidiary Consolidated Bathurst in the late 1980s before he became the leader of the Liberal Party of Canada. Chrétien's daughter France is married to the son of Paul Desmarais, Sr., André. Also Chrétien's chief of staff Eddie Goldenberg worked in the past for Power Corp.

Former Prime Minister of Canada, the late Pierre Trudeau, served in the mid-1990s on Power Corp.'s international advisory board. Trudeau's assistant Ted Johnson also worked for Power Corp. During the Trudeau administration Michael Pitfield held a variety of positions in government but during his time in the private sector he was at one time a Vice-Chairman of Power Corp. and is currently listed as a Director Emeritus.

Former Prime Minister of Canada Brian Mulroney also has a relationship with Power Corporation. Mulroney's friend Ian MacDonald described Desmarais as “Mulroney’s mentor in the business world,” and it is believed that Mulroney has done legal work for Power Corp. since the end of his term as Prime Minister. Additionally, former Mulroney Minister of Transport Don Mazankowski is currently Power Corp.'s company director.

Former Premiers of Ontario William Davis and John Robarts of the Progressive Conservatives have both sat on Power Corp.'s national advisory board. John Rae, the brother of former NDP Premier Bob Rae, currently serves as Power Corp.'s Executive Vice President.

Former Premier of Quebec Premier Daniel Johnson, Jr. worked for Power Corp. from 1973 to 1981 and in the last three years of this term was a Vice-President in the company.

Former member of the Liberal Party of Canada Maurice Strong became President of Power Corp. by his mid-thirties. He had a role in the creation of the Canadian International Development Agency and in 1976 he was appointed to run Petro-Canada. He later worked for the United Nations.

Power Corp.'s international advisory board has featured individuals such as former German Chancellor Helmut Schmidt, former oil minister of Saudi Arabia Sheikh Ahmed Zaki Yamani, former head of the US Federal Reserve Board Paul Volcker, and the previously mentioned former Prime Minister of Canada Pierre Trudeau.

The former Caisse de dépôt et placement du Québec's President and CEO Henri-Paul Rousseau became the vice-chairman of the company and a member of the board of directors of Power Corporation.