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Mulroney's credibility under fire at Oliphant inquiry

Lawyer, former PM square off over 1996 testimony in which Mulroney neglected to mention cash payments

From Friday's Globe and Mail

OTTAWA — Former prime minister Brian Mulroney refused to budge Thursday when faced with repeated and piercing questions about sworn testimony he gave in 1996, where he was asked about his relationship with Karlheinz Schreiber but neglected to mention that he took cash in hotel rooms from the German-born lobbyist.

The moment that many observers have been waiting for arrived Thursday, with the lead lawyer at the Oliphant inquiry, Richard Wolson, getting his first chance to bore into the former prime minister's words in the highly scrutinized, and often quoted, “cup of coffee” testimony.

In 1995, Mr. Mulroney sued the federal government when the RCMP stated, in a letter to the Swiss government, that he had collected millions of dollars in kickbacks from Mr. Schreiber.

But once on the stand, he never explained that he had met with Mr. Schreiber in hotels in Montreal and New York in 1993 and 1994 and accepted at least $225,000 in cash.

Rather, he responded to questions about his contact with Mr. Schreiber after leaving office, by saying they had met for coffee “once or twice” and offering select details of their conversations. The government eventually settled with him for $2.1-million in legal and public relations costs, and apologized. The cash payments didn't become public until 2003.

Mr. Wolson, a Manitoba defence lawyer, pointed out that Mr. Mulroney was content to reveal innocuous details of his meetings with Mr. Schreiber, but never hinted at the cash – the thing Mr. Wolson called the “essence” of the meetings.

“My question to you is, you have given to the examiner only part of the story. The part you haven't given him is the taking of the money, which was, by your account, a totally legitimate enterprise. Why not? Why didn't you give the full story?” Mr. Wolson asked.

“Because I wasn't asked the question. You and I may disagree on that sir …” Mr. Mulroney replied.

Mr. Mulroney repeatedly used the fact that he was never asked in 1996, directly, whether he took money from Mr. Schreiber, as a constant source of shelter from Mr. Wolson's bombardment. Meanwhile, Mr. Wolson underscored the former prime minister's obligation to reveal all, as a former public office holder.

“And it seems to me sir, with due respect, when you tell the examiner, ‘I met him once or twice for coffee' the examiner would, I think properly understand, coming from a former prime minister of Canada, that when you answer, ‘I met him once or twice for coffee' that that was it,” Mr. Wolson said.

“No sir. That was in regard to a direct question. ‘Did you maintain contact with him?' Yes I did. I met him once or twice for coffee …” Mr. Mulroney insisted.

Besides his “never asked” explanation, Mr. Mulroney also reverted to another reason: before launching his lawsuit, he had volunteered to meet with the Mounties and tell them everything they wanted to hear, he said. But because they refused to listen, they missed their chance, he testified.

Mr. Wolson asked him whether he would have been equally selective if such a discussion had taken place: “Would you have volunteered information that you had received cash from Schreiber in hotel rooms?”

“I would have answered fully every question,” Mr. Mulroney replied.

“They wouldn't have known. They couldn't have known. Nobody knew …” Mr. Wolson shot back.

Mr. Mulroney also explained that, had such a meeting taken place, he would have brought forth any documents the RCMP asked for; Mr. Wolson pointed out that documents wouldn't have helped anyone understand anything.

“Money was put not into bank accounts, but in safes, squirrelled away. There was no documentation. There's no evidence of it,” he said.

The inquiry was announced by Prime Minister Stephen Harper after Mr. Schreiber, who is facing extradition to Germany on charges of corruption and tax evasion, revealed that not only had Mr. Mulroney taken the money, but that he waited six years to declare the income to tax collectors.

Mr. Mulroney says he was hired to promote armoured vehicles, made by Mr. Schreiber's client, Thyssen AG, to world leaders, while Mr. Schreiber says he hired him to lobby domestically.

Both men deny that the payments had anything to do with the more than $20-million that Mr. Schreiber was paid for his efforts negotiating contracts with the federal government.

The inquiry also heard Thursday that Mr. Schreiber arranged for himself at least 10 meetings with Mr. Mulroney while he was prime minister. However, Mr. Mulroney declared that “Mr. Schreiber had no access to me” and attributed the meetings to Mr. Schreiber's relationships with respected ministers and his “Energizer Bunny”-like persistence.

The former prime minister denied that Mr. Schreiber and the armoured vehicle factory he was promoting had any sort of special status in his eyes, testifying that he met “hundreds of Schreibers.”

Mr. Wolson pointed out that the meetings were almost always attended by either Fred Doucet, a former aide and friend of Mr. Mulroney's, or Elmer MacKay, a minister in his government.

“Isn't it this though sir? An ordinary mortal like Mr. Schreiber can't get in to see you. He's got to get there through some other source. He gets there through your friends … they are, in effect, his conduit to you. That's the truth isn't it?”

“No, Mr. MacKay is a senior minister of the Crown in Canada, who happens to be the member of Parliament for Central Nova … I guess he felt Mr. Schreiber was advancing a project that could achieve some of those objectives, and he would speak to me about it. It's not really a mysterious thing.”

The former prime minister also denied that he knew anything about $2-million that flowed into Mr. Schreiber's Swiss bank accounts – a portion of which made its way to Tory lobbyists and some of his closest friends – when three of his ministers signed a document in support of the proposed armoured vehicle factory.

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