Following the Mulroney-Schreiber money trail!

What The #!%*? is the deal with the Mulroney-Schreiber inquiry?
Posted: May 11, 2009 by Ron Nurwisah
Canadian Politics, What the #!%*?

In this occasional feature, the National Post tells you everything you need to know about an issue. Today: James Cowan on the Mulroney-Schreiber inquiry.

The Mulroney-Schreiber Inquiry? Is that thing still going on?

Yes. It has not been front-page news lately, but the inquiry into the business relationship of Karlheinz Schreiber, a lobbyist, and Brian Mulroney, the former prime minister, has been quietly churning away since March 30. The inquiry has heard from 23 witnesses over 18 days of testimony, including Mr. Schreiber, who gave four days of testimony last month and then returned for a one-day encore last week. Mr. Mulroney makes his first appearance on Monday.

What is the inquiry investigating again?

Mr. Schreiber alleges he paid $300,000 to Mr. Mulroney to lobby on behalf of a German’s company plan to build an armoured vehicle manufacturing plant in Canada. He also claims to have struck the deal two days before Mr. Mulroney stepped down as prime minister in 1993. For his part, Mr. Mulroney denies making any agreement until after he retired and only agreed to promote the vehicles to foreign governments. He also says he was paid $225,000.

Who has testified other than Mr. Schreiber?

The witnesses have included former aides to Mr. Mulroney, former cabinet ministers and even Kim Campbell, a former prime minister. But the testimony that seems to have most excited observers came from Steven Whitla, a forensic auditor hired by the inquiry.

And what did this Mr. Whitla have to say?

Mr. Schreiber reportedly received a $20-million commission in 1988 following the sale of 34 Airbus planes to Air Canada, which was then a crown corporation. There is a “strong inference” that this money was used to pay Mr. Mulroney, although he likely did not know the source of the cash, Mr. Whitla testified. The Airbus deal itself was the subject of a previous RCMP investigation. No charges were ever laid, but public allegations that Mr. Mulroney received a kickback prompted him to file a lawsuit against the federal government. He eventually received a $2.1-million settlement.

Did Mr. Schreiber ever receive similar commissions on the armoured vehicle plan?

Oddly enough, yes. Even though the proposal never came to fruition, Mr. Schreiber received $4-million in success fees for securing an “understanding in principle” between the federal government and Thyssen, the company behind the project. Perrin Beatty and Lowell Murray, both former cabinet ministers, have testified the payments made no sense, given that the agreement was essentially meaningless and the project eventually failed. But evidence also shows that Mr. Schreiber paid $610,000 to other lobbyists who worked on the agreement including Fred Doucet, a former aide to Mr. Mulroney.

What does all of this mean for Mr. Mulroney?

Even if the testimony has not been damning for Mr. Mulroney, he still needs to rehabilitate his image, according to Henry Jacek, a political science professor at McMaster University. Mr. Mulroney previously admitted he waited five years to declare the payments from Mr. Schreiber on his taxes. “People will say ‘He’s admitted that, what else is there?” Mr. Jacek said.

“Redemption is going to be very hard, because there is always going to be a cloud.”

So does it matter how he performs on the stand?

Definitely, as Jean Chrétien, a former Liberal prime minister, proved at the public inquiry into his government’s sponsorship program in 2005. John Gomery, the inquiry’s commissioner, had described Mr. Chrétien’s decision to have his name printed on golf balls as “small-town cheap.” So during his testimony, Mr. Chrétien flashed golf balls from numerous world leaders — and the law firm that employed Justice Gomery’s daughter.

His performance ultimately overshadowed the rest of the inquiry, but it may be difficult for Mr. Mulroney to stage a similar stunt. “The public seem to give a heck of a lot more leeway to Chrétien than they do Mulroney,” Mr. Jacek said.

Photo: German-Canadian businessman Karlheinz Schreiber testifies at the Oliphant Commission in Ottawa April 17, 2009. (Blair Gable/Reuters)