Skip navigation

Schreiber no stranger to political scandal

The Canadian Press

OTTAWA — Karlheinz Schreiber has the dubious distinction of having been embroiled in major scandals in both Germany and Canada.

The tendrils of one scandal snaked through a German political party, ultimately tarnishing former German chancellor Helmut Kohl's legacy.

The other haunts former prime minister Brian Mulroney to this day.

To many Germans, Mr. Schreiber is known as one of the key figures in a 1999 slush-fund scandal that rocked Germany after controversial cash donations he made to the then-ruling Christian Democratic Union came to light. The scandal ultimately led Mr. Kohl to resign his position as the party's honorary chairman.

If Mr. Schreiber -- an international arms dealer, lobbyist and businessman who began his career working for the West German intelligence service -- is extradited to Germany, he faces a laundry list of charges.

Germany alleges Mr. Schreiber evaded income tax on roughly $46-million by hiding commissions he earned for negotiating the sale of helicopters, aircraft and armaments.

The fraud charges also stem from a deal for the sale of 36 German army tanks from German arms manufacturer Thyssen AG to Saudi Arabia. Germany alleges Mr. Schreiber and confederates at Thyssen created a subsidiary commission contract that defrauded Saudi Arabia. Germany further alleges in relation to the tank deal that Mr. Schreiber bribed Germany's then-defence minister, Ludwig Holger Pfahls, to help secure the tank deal. Germany also alleged Mr. Schreiber paid secret commissions in relation to the Saudi Arabia contract.

But Canadians perhaps better know the German-Canadian businessman for his role in the so-called Airbus affair.

Mr. Schreiber's notoriety in Canada took off amid allegations of illegal payments in connection with the 1988 purchase of 34 Airbus jetliners by then Crown-owned Air Canada. The RCMP and the federal Justice Department, in a letter sent to Swiss banking authorities in 1995, alleged that Mr. Mulroney may have been involved with Mr. Schreiber and others in a kickback scheme surrounding the sale of the jets.

Mr. Schreiber was never charged in connection with the scandal.

Mr. Mulroney sued for libel when the letter became public and won an apology from Jean Chrétien's Liberal government of the day and a $2-million out-of-court settlement. But it has since been disclosed that after he left office, Mr. Mulroney received $300,000 in cash from Mr. Schreiber in a series of meetings in hotel rooms in Montreal and New York.

Mr. Schreiber has sued Mr. Mulroney to recoup that money.

In recent days, however, Mr. Schreiber has been something of a thorn in the side of Prime Minister Stephen Harper.

Mr. Harper was named in a 20-page affidavit that Mr. Schreiber filed in Ontario Superior Court last week alleging that Mr. Mulroney was still serving as prime minister in June of 1993 when he agreed to enter into a business arrangement. The affidavit also alleges a Mulroney adviser once asked Mr. Schreiber to transfer funds, in connection with Air Canada's 1988 purchase of Airbus planes, to the former prime minister's lawyer in Switzerland.

None of the statements in Mr. Schreiber's affidavit has been proved in court.

However, Mr. Harper said the allegations are serious enough to threaten the integrity of the prime minister's office.

Mr. Harper subsequently cut ties with the man he once valued as a political adviser and announced he will appoint an independent arbiter to review Mr. Mulroney's dealings with Mr. Schreiber.

Mr. Schreiber has been fighting extradition to Germany since being arrested by the RCMP in August, 1999, on behalf of the German government on tax evasion and other charges. So far, various judges and three successive justice ministers have rebuffed his arguments against extradition.

Mr. Schreiber could be extradited as early as this week.

Recommend this article? 108 votes

Back to top