Former Progressive Conservative prime minister Brian Mulroney fiercely denied Thursday several of the key allegations made by Karlheinz Schreiber about their business dealings.
Mr. Mulroney said he never received any money connected to Air Canada's 1988 purchase of Airbus planes, nor did he receive a cent from other clients connected to Mr. Schreiber while he was prime minister.
He acknowledged receiving cash payments from Mr. Schreiber to “promote his interests” but denied Mr. Schreiber's allegation that the deal was struck while he was still in office. He said the amount totalled $225,000, not $300,000 as alleged by Mr. Schreiber.
Mr. Mulroney said he was proud of his government's record from 1984 to 1993 but, like all leaders, knew “moments of failure, sorrow and error.
“My biggest mistake in life, by far, was ever agreeing to be introduced to Karlheinz Schreiber in the first place,” Mr. Mulroney said. The former prime minister said his second biggest mistake was accepting cash payments from Mr. Schreiber.
Mr. Mulroney's much-anticipated appearance before the House of Commons ethics committee follows four days of testimony by Mr. Schreiber, a German-Canadian businessman and lobbyist wanted in Germany on charges of fraud, bribery and tax evasion.
At issue are three separate cash payments Mr. Mulroney received from Mr. Schreiber, beginning shortly after he stepped down as prime minister in 1993. Until today, the former prime minister had never personally explained in public why he accepted the cash nor what he did for it. There is not a single mention of Mr. Schreiber in Mr. Mulroney's recently released 1,121-page memoirs.
The committee is also probing the $2.1-million libel settlement that Mr. Mulroney was awarded by the Canadian government in 1997 over a leaked RCMP letter that alleged the former prime minister and Mr. Schreiber may have been involved in a kickback scheme related to the purchase of Airbus jets.
The former prime minister called the RCMP investigation “the biggest calamity of my life” and “a near-death experience.” He blamed much of the experience on journalist Stevie Cameron, author of the 1995 book, On The Take: Crime, Corruption and Greed in the Mulroney Years, suggesting that Ms. Cameron was “consumed with hatred” and made a life's work of pursuing him.
In his opening statement, Mr. Mulroney said he never discussed entering into a business relationship with Mr. Schreiber while he was still in office.
He said the pair agreed on Aug. 27, 1993, that Mr. Mulroney would provide “international representation” and lobby world leaders on behalf of Schreiber client Thyssen AG, which was selling armoured peacekeeping vehicles. The meeting occurred at a hotel in Mirabel, Que., just days before the election while he was still an MP, he said.
Mr. Mulroney stressed the agreement had nothing to do with domestic business. At that same meeting, Mr. Mulroney said he made a “serious error in judgment” when he accepted an envelope stuffed with $75,000 in $1,000 bills – the first of three “retainers” he received from Mr. Schreiber.
“When I hesitated, [Mr. Schreiber] said, ‘I'm an international businessman and I only deal in cash,' ” Mr. Mulroney testified.
Mr. Schreiber has testified that he and Mr. Mulroney struck a business deal for future consulting work during a meeting at Harrington Lake, the prime minister's official residence, on June 23, 1993, two days before Mr. Mulroney resigned as prime minister. Bank records dated July 27, 1993 show Mr. Schreiber withdrew $100,000 from his Swiss bank account – a Canadian funds account coded 'Britan' after Mr. Mulroney, according to Mr. Schreiber.
Mr. Schreiber has alleged that under the deal, the former prime minister would promote the development of a Canadian light armoured vehicle factory, known as the Bear Head project, with the subsequent government.
“Not a word was breathed at Harrington Lake about concluding any future business dealings with him,” Mr. Mulroney insisted, later adding Mr. Schreiber will “say anything, sign anything, and do anything to avoid extradition.”
Mr. Schreiber is facing extradition to Germany on charges of fraud, bribery and tax evasion.
The cash, safety deposit boxes and invoices
Other key allegations made by Mr. Schreiber and answered by Mr. Mulroney include:
• Mr. Schreiber said he originally planned to give Mr. Mulroney $500,000. But he added that the former prime minister did nothing for the money and was cut off after he received $300,000.
Mr. Mulroney acknowledges he accepted $225,000 in cash at hotel meetings in New York and Montreal, that it was a mistake to take cash, but that the transaction was “not only legitimate, it was perfectly legal.” He said he stored the cash in safety deposit boxes at his home and in New York.
Mr. Mulroney testified that he used about $45,000 of the sum to pay for travel costs so he could meet with international business and political leaders in China, Russia, Europe and the United States, including the late Russian president Boris Yeltsin and the late French President François Mitterrand.
He acknowledged that he never gave invoices or documentation to Mr. Schreiber for the services rendered and never asked where the money came from. He said he provided a one-hour briefing to Mr. Schreiber on his international activities at the end of 1994 at a hotel in New York City. His former chief of staff Fred Doucet was there for the briefing, he said.
• Mr. Schreiber alleged Mr. Doucet asked him in the early 1990s to send a portion of the secret commissions he had received from the 1988 sale of Airbus airplanes to Air Canada to Mr. Mulroney's lawyer in Geneva. Mr. Doucet denies the allegation, which was first made in an affidavit Mr. Schreiber filed in November, calling it a “fabrication.”
Mr. Mulroney testified Thursday that “every single relevant allegation made by Mr. Schreiber” in the affidavit is “completely false.” He said he never had a lawyer in Geneva or elsewhere in Switzerland except to “defend myself against the false charges laid against me in 1995” and that he never had a bank account or safety deposit box in Switzerland.
• Mr. Schreiber said Mr. Mulroney lied under oath when the former prime minister testified in 1996 that he had met Mr. Schreiber only for a cup of coffee and only "once or twice" after leaving office and that he "had never had any dealings with him."
Mr. Mulroney testified that at the time, he was never asked about his commercial relationship with Mr. Schreiber, and that his denial of “dealings” referred to the Airbus matter.
• Mr. Mulroney never objected to receiving payments in cash, Mr. Schreiber testified. Mr. Mulroney countered that he would have gladly accepted a cheque, but Mr. Schreiber told him he only dealt in cash.
Committee members also asked why Mr. Mulroney was late declaring the Schreiber payments to Revenue Canada.
Mr. Mulroney testified that he declared the cash payments in 1999 after Mr. Schreiber was arrested on the German warrant, and that he paid income tax on the entire amount, including the $45,000 in expenses. He acknowledged he had been “generous” in his tax filing because he wanted there to be no questions about the Schreiber payments.
He said he didn't declare the Schreiber cash at the time because he had only used it for expenses and hadn't yet billed Mr. Schreiber – an explanation that didn't wash with NDP justice critic Joe Comartin.
“I practised law for a long time, and for me it's pretty basic,” Mr. Comartin said. “You take money in, you take the deductions off it, you declare the income, and you do it in the year you're doing it, and you do it all with records and all the rest of it. You didn't do any of that, did you, Mr. Mulroney?”
“I kept records myself,” Mr. Mulroney replied. “But generally speaking, sir, you're right.”
Asked by Bloc Québécois MP Serge Menard if he was in need of money when he accepted the first Schreiber payment, Mr. Mulroney said no, contradicting recent statements by his former spokesman Luc Lavoie.
Last month, Mr. Lavoie told The Globe and Mail the former prime minister was in financial straits and worried about the future when he first took the cash. “Mr. Mulroney is not a wealthy man. He doesn't come from a wealthy family, Mr. Lavoie said. “Prior to entering politics, he was the CEO of a major corporation and still had children when he left politics and he wanted to offer them the kind of living that they had before he entered politics.”
Mr. Mulroney also read for the committee glowing, congratulatory letters he received from Mr. Schreiber as late as 2004.
'Most difficult thing in life'
Mr. Mulroney arrived on Parliament Hill on Thursday with his wife, Mila, and their adult children – Caroline, Ben, Mark and Nicolas. His family sat stone-faced nearby as he addressed the committee.
Mr. Mulroney concluded his testimony with an attack on Mr. Schreiber, saying the lobbyist would “take any one down in flames” if it helped him delay his deportation to Germany.
“The most difficult thing in life I think is to admit one's mistakes, although it's the most important. Take it from me, it's even harder to do so in public,” Mr. Mulroney said in closing. “I hope others will do the same about their mistakes, if not for me, for my family.”
Mr. Mulroney's testimony on Parliament Hill comes on the heels of a new poll suggests that only one in 10 Canadians believes the former prime minister is telling the truth about his business relationship with Mr. Schreiber.
The Canadian Press Harris/Decima survey found that respondents were almost three times as likely to take the word of Mr. Schreiber. The online poll of more than 1,000 respondents was conducted Dec. 4-10 while Mr. Schreiber was testifying at a televised House of Commons committee. It suggests, however, that neither man enjoys much credibility.
With reports from Canadian Press