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A bewildering story of how he got the cash

From Friday's Globe and Mail

OTTAWA — I don't give a rodent's rear about the Airbus affair any more.

What I care about are all the split hairs former prime minister Brian Mulroney deposited yesterday on the floor of the Railway Committee Room in his rare and inherently undignified appearance -- a former prime minister called on the carpet before the parliamentary ethics committee, for God's sakes -- that left the place looking like a barber shop.

I am perfectly prepared to accept Mr. Mulroney's assurance that he never took a penny from anyone in connection with Air Canada's purchase of 38 of the company's aircraft in 1988 (besides, I fly in the suckers all the time; I have to believe they may actually stay in the air despite their association with the greasy gnome who once lobbied for Airbus, German-Canadian businessman Karlheinz Schreiber).

I will agree that in accepting a whack of cold hard cash from said greasy gnome, Mr. Mulroney may not have broken a single law or code of conduct -- or as he himself put it once yesterday, in what I hardly took as a ringing exculpation of his curious conduct, that what he did "was decidedly not illegal."

I acknowledge that Mr. Schreiber, now wanted by the German government on grave charges of fraud and bribery, is fighting an all-out battle to avoid extradition to his native land and that there probably is no bar beneath which he will not slither to save his own skin.

That said, I note that when it suited him yesterday, Mr. Mulroney was quick to quote Mr. Schreiber to bolster his own assertions, prompting Joe Comartin of the NDP to remark wryly, "So, we're supposed to believe him now?"

But what wasn't nearly good enough was Mr. Mulroney's story of how he came to get what he says was $225,000 in Canadian $1,000 bills from Mr. Schreiber in 1993-94 in three separate transactions at three different hotels in two different cities in two different countries.

This was no explanation. Neither was it a mea culpa, though he said he was sorry and it was hard not to feel sorry for him. What he offered was a bewildering tale of shadowy transactions which even Mr. Mulroney conceded could lead "to some apprehension of impropriety."

Mr. Mulroney confirmed that he met Mr. Schreiber at the PM's Harrington Lake residence on June 23, 1993, in what he described as a "farewell courtesy visit."

He had no reason not to meet him, Mr. Mulroney said, for he knew Mr. Schreiber only as the able businessman who as the chairman of Thyssen AG had lobbied, unsuccessfully it turns out, for his government's support of Thyssen's light-armoured vehicle project. Others, such as former Alberta Premier Peter Lougheed, at the time recognized Mr. Schreiber for what he was and ordered senior government members to stay away from him, but Mr. Mulroney did not.

In any case, there was no discussion of any role Mr. Schreiber might want Mr. Mulroney to play later, once he left office, though Mr. Schreiber said he'd like to stay in touch.

About two months later, with Mr. Mulroney out of the PMO but still a sitting member of Parliament, he was told Mr. Schreiber wanted to meet him to discuss "an international mandate." Mr. Mulroney had no reason not to meet him, he said, and on Aug. 27, he went to Mr. Schreiber's hotel at Mirabel Airport.

There, Mr. Schreiber reiterated his annoyance that Mr. Mulroney's government had not approved the Thyssen deal, but nonetheless said he thought a former PM could be helpful in promoting the vehicle abroad and that Thyssen would like to retain him.

Mr. Mulroney replied that he thought he could be useful, provided it was for work done outside Canada, and Mr. Schreiber handed him a legal-sized envelope he described as a retainer. When Mr. Mulroney hesitated, Mr. Schreiber explained that he was an "international businessman. I deal only in cash. This is how I do business."

Now, Mr. Mulroney said, he knows he should have declined the cash, but then, what he did was take it home and put it in his safe.

He then did the same thing twice more, putting the money he later received from Mr. Schreiber at the Queen Elizabeth Hotel in Montreal in the home safe, and the money he got from him at the Pierre Hotel in New York in a safety deposit box he had there.

How did he know the envelopes contained 75K each? He knew because "when I deposited the amount in the safe, it was split into, I think, tens and one five," that being, presumably, seven piles each of ten $1,000 bills and one pile of five $1,000 bills.

No invoices or receipts were ever exchanged between the two men.

Mr. Mulroney is a lawyer, and as anyone who has ever paid a lawyer painfully knows, they bill in minutes; the accounting for their time is directly tied to cash flow. But then, he said, this money was not put through his law firm, Ogilvy Renault, because Mr. Mulroney had negotiated "an exception to the partnership rules" that allowed him to do such consulting work.

The dough stayed in the safe, he said, until his three-year mandate was settled, whereupon "I compensated myself for my professional work." The $75,000 in the New York safety deposit box Mr. Mulroney said he "integrated ... over a period of time in my own requirements in the United States."

I don't even know what that means.

He did not declare the cash in the years he received it, because, he said, he was using it only for expenses and expenses need not be declared until deals are finished and "the bill is sent."

Yet he never sent a bill and he didn't declare the money when the work for Mr. Schreiber was done. He didn't, in fact, declare it until Mr. Schreiber was arrested in 1999 on the German charges, when he declared all of the $225,000 as income, though in fact he had spent $45,000 of it on expenses. "I thought I better be careful," Mr. Mulroney said. "I felt obliged to clean this all up ... I decided to pay taxes on the full amount."

He only ever gave Mr. Schreiber an oral report, he said, of the work he had done promoting the Thyssen vehicle overseas on ill-defined trips in which he met the late former Russian president Boris Yeltsin and the late former French president François Mitterrand and other leaders, alive or dead, he didn't name.

Indeed, the "international" aspect of Mr. Mulroney's evidence yesterday that was notable: There was mention of the "international payment;" the "international dimension of the mandate;" "international business;" "success internationally;" "international consultant" and "international consulting business."

So then, it is just us homegrown rubes who don't get it.

In May of 2000, the year after Mr. Mulroney belatedly declared his $225,000, the Bank of Canada announced it was withdrawing $1,000 notes from circulation as part, the formal press release said, of the fight against money-laundering and other nasty things. The release pointed out that the big bills accounted for less than 0.3 per cent of all notes in circulation.

Other appearances

One former prime minister and four sitting prime ministers have appeared before previous parliamentary committees on issues related to the Constitution, the budget or ethics.

R. B. Bennett was prime minister when he testified on March 3, 1932, before the Special Committee on Certain Charges and Allegations made by George N. Gordon, a former governor-general. In his testimony, Mr. Bennett vigorously denied using public funds to pay for his sister's honeymoon.

Joe Clark was prime minister when he discussed budget estimates at committee in 1979, while Pierre Trudeau followed suit in 1980, 1981, 1982 and 1983.

Pierre Trudeau was out of office when he testified before a special joint committee on the Meech Lake accord on Aug. 27, 1987. He returned to a Senate committee of the whole to discuss constitutional reform on March 30, 1988.

Stephen Harper went before the Senate committee on Senate Reform on Sept. 7, 2006, to lay out his proposals for terms limits and Senate elections.

Daniel Leblanc

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