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Mulroney treated 'fairly' as testimony concludes

Questions 'appropriate and didn't either bother me or offend me in any way,' former PM says after six-day stint explaining dealings with Schreiber

Globe and Mail Update

OTTAWA — Former prime minister Brian Mulroney was all smiles Wednesday as he stepped down from the witness stand and shook hands with commission counsel before he and his wife, Mila, made their way to the exit after six days of testimony before a public inquiry.

Over the course of the six days, he never strayed from his statement that the three cash payments he received in 1993 and 1994 – that are now the subject of the Oliphant inquiry – were part of a legitimate and legal arrangement between himself and German-Canadian businessman Karlheinz Schreiber.

Before he was allowed to leave, the commissioner, Mr. Justice Jeffrey Oliphant, sought assurance that Mr. Mulroney felt he was treated fairly.

“Mr. Mulroney, you've been on the stand for, I think, the longest of any witness I have either been involved in as a lawyer or in 24 years as a judge,” Judge Oliphant said. “I want to assure myself before you leave, sir, that you feel, despite probing questions that may have been asked, that you leave here feeling that you've been treated fairly and with respect.”

“I think precisely that, Mr. Commissioner,” Mr. Mulroney replied. “Both you and [lead commission counsel Richard] Wolson and his colleagues and other members of the group have treated me very fairly and with great respect and the probing questions I thought were appropriate and didn't either bother me or offend me in any way, and so the answer to the question is very much in the affirmative and I thank you, sir, for your kindness.”

In his final day of testimony, Mr. Mulroney answered questions from Mr. Schreiber's lawyer, Richard Auger.

Several questions focused on the money Mr. Mulroney held in a safety deposit box in the United States, which came from the last of three cash payments Mr. Mulroney received in 1993 and 1994.

Mr. Mulroney said he could not recall when he cleared out his safety deposit box in New York — a box that held 75 Canadian $1,000 bills given to him by Mr. Schreiber — but the former prime minister did say he used most of the money to pay for his children's education in the United States.

Mr. Mulroney said he did not use the money from the safety deposit box until after he had declared it as income in 2000. But in response to repeated questions on the topic, he said he recalls few details as to when the money was removed.

“When was the last increment removed from the safety deposit box in New York,” Mr. Auger asked.

“I have no idea,” Mr. Mulroney replied.

“Could it have been in 2001 or 2002?”

“I have no idea, sir,” Mr. Mulroney repeated.

“Could it have been in 2008?”

“Two thousand and eight? No, sir,” said Mr. Mulroney.

“Could it have been in 2005?”

“Well, I think I've indicated to you that it was most likely beginning in late 2000,” Mr. Mulroney said.

“Well, you said in increments. So the first increment was removed in late 2000?” Mr. Auger asked.

“I believe so, yes.”

“How much?”

“I can't remember, sir.”

Mr. Mulroney then repeated his statement that the money was disbursed to immediate and extended family in the United States.

It was an intervention by Judge Oliphant that ultimately drew a more detailed account of where the money went.

“Mr. Mulroney, at that time did you have children or a child attending school in the United States perhaps,” the commissioner asked. “I happen to be a father who has a child that has been educated out of the country, and I'm wondering if some of the money went to that?”

Mr. Mulroney confirmed that that was the case.

“I think there were in that time frame at least two, if not three, in New York and Connecticut at the time, in that general time frame, and you're quite right, that's what it was used for principally,” he said.

According to news reports from the years 2001 to 2004, three of Mr. Mulroney's children were studying in the United States.

Mr. Mulroney's daughter Caroline was studying law at New York University when she married Andrew Lapham in September of 2000, in a high-profile wedding held in Montreal. The New York Times published a story on the wedding, given that it involved the daughter of a former Canadian prime minister and the son of Lewis Lapham, the editor of Harper's Magazine in New York.

Meanwhile in that same period, Mr. Mulroney's son Nicolas attended Boston College and his son Mark attended Duke University in North Carolina.

Mr. Mulroney's third son, Ben, studied law at Laval University in Quebec City.

Later, when questions turned to the fact that Mr. Mulroney's lawyers negotiated an arrangement where he only paid tax on half of the $225,000 he received from Mr. Schreiber, the U.S. funds came up again.

In one of the letters written in early 2002 by Mr. Mulroney's lawyer to federal tax authorities, it indicates that the then unidentified taxpayer was prepared to disclose income of between $150,000 to $225,000.

Mr. Mulroney said he could not explain the range because he was not part of the tax negotiations.

“The plan might have been to claim $150,000 in Canada and $75,000 in the U.S., specifically in the state of New York,” Judge Oliphant suggested.

“It's possible,” Mr. Mulroney replied.

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