Testimony heard by the ethics committee

Karlheinz Schreiber

Frank Moores

In the early 1980s, as Mr. Mulroney was planning his run for the leadership of the Conservative Party, his supporter Frank Moores planned to set up the country’s top lobby firm and to give Mr. Mulroney something “to live on” after he left office.

Airbus

Mulroney confidant and former chief of staff Fred Doucet asked Mr. Schreiber in the early 1990s to send a portion of the secret commissions from the 1988 sale of Airbus airplanes to Air Canada to Mr. Mulroney’s lawyer in Geneva.

When the deal was struck

Mr. Mulroney struck a business deal with Mr. Schreiber for future consulting work during a meeting at Harrington Lake on June 23, 1993, two days before Mr. Mulroney resigned as prime minister. A first cash payment of $100,000 was made at a follow-up meeting at a hotel in Mirabel, Que. on Aug. 27, 1993.

What the cash was for

Under the deal, the former prime minister would promote a Canadian light armoured vehicle factory, known as the Bear Head project, with the subsequent government, which they hoped would be a Progressive Conservative majority led by Kim Campbell. Mr. Mulroney was entitled to $500,000, but did nothing for the money and was cut off after he received $300,000. Mr. Schreiber said the cash came from a Swiss bank account containing "success fees" from projects that moved forward under the Mulroney government, including commissions Mr. Schreiber received as a lobbyist for three European companies: Airbus, MBB and Thyssen.

Why cash?

Mr. Mulroney never objected to receiving payments in cash.

Under oath

Mr. Mulroney lied under oath during sworn testimony in his 1996 defamation suit against Ottawa when the former prime minister testified that he had only met Mr. Schreiber for a cup of coffee “once or twice” after leaving office and that he “had never had any dealings with him.”

The Savoy

He met with Mr. Mulroney at the Savoy hotel in Zurich, Switzerland on Feb. 2, 1998. After a light lunch, Mr. Mulroney got to the point: The former prime minister wanted to be sure there was nothing that linked him to the cash payments he had accepted five years earlier. Mr. Schreiber told Mr. Mulroney that he didn’t know of any evidence that would link them financially.

Letter of apology

Mr. Mulroney used his former solicitor-general Elmer MacKay in a “set-up” in which he had Mr. MacKay persuade Mr. Schreiber to apologize in writing to Mr. Mulroney on the false belief that it would end Mr. Schreiber’s impending extradition to Germany. The draft apology was sent from the e-mail address sharonmackay923@hotmail.com to Mr. Schreiber’s wife, Barbel Schreiber.

Brian Mulroney

Frank Moores

Mr. Mulroney has declined comment on the allegation and was not asked about it by the committee.

Airbus

Mr. Mulroney said he never received any money connected to Airbus, nor did he receive a cent from other clients connected to Mr. Schreiber while he was prime minister. 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. Doucet has also denied the allegation, calling it a “fabrication.”

When the deal was struck

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” on behalf of Schreiber client Thyssen AG. At that same meeting, Mr. Mulroney said he made a “serious error in judgment” when he accepted an envelope stuffed with $75,000, the first of three.

What the cash was for

Mr. Mulroney said he was paid $225,000 and stressed the agreement had nothing to do with domestic business; that he was contracted to promote Thyssen’s armoured peacekeeping vehicles with international business and political leaders. He said he met officials in China, Russia, Europe and the United States, including the late Russian president Boris Yeltsin and the late French President François Mitterrand. Mr. Mulroney testified that he used about $45,000 of the $225,000 to pay for travel costs. He acknowledged that he never gave invoices or documentation to Mr. Schreiber for the services rendered and never asked where the money came from.

Why cash?

Mr. Mulroney said he would have gladly accepted a cheque, but Mr. Schreiber told him he only dealt in cash.

Under oath

Mr. Mulroney said he was under no legal obligation to reveal the cash payments. At the time, he said he was never asked about his commercial relationship with Mr. Schreiber, and that his denial of “dealings” referred to the Airbus matter.

The Savoy

Mr. Mulroney has acknowledged the meeting occurred but has not detailed what was discussed. He was not asked about it by the committee.

Letter of apology

The letter of apology arrived with no advance warning and as a complete surprise to the former prime minister. Mr. MacKay, in a voice-mail left with The Globe and Mail early December this year, acknowledged writing an e-mail to Mr. Schreiber last year, a large chunk of which ended up in the letter to Mr. Mulroney, saying he sent the e-mail in an effort to fix up the relationship between the two men, whom he considers friends.