OTTAWA — A damning report by a public inquiry into the dodgy dealings between Brian Mulroney and Karlheinz Schreiber concludes their financial relationship was “inappropriate.”
The inquiry, led by Justice Jeffrey Oliphant, also says the former prime minister’s failure to disclose his dealings with the shady German-Canadian businessman was inappropriate.
And, Oliphant says, it’s clear Mulroney did his best to hide the fact that a relationship existed at all. He accepted payments in cash. He drafted no formal agreement. He issued no invoices and he squirrelled the money away in a safe and a safety deposit box.
While Monday’s report finds that Mulroney didn’t strike a formal deal with Schreiber while he was prime minister, he did reach an agreement and accepted cash while he was a sitting MP.
“The conduct exhibited by Mr. Mulroney in accepting cash-stuffed envelopes from Mr. Schreiber on three separate occasions, failing to record the fact of the cash payments, failing to deposit the cash into a bank or other financial institution, and failing to disclose the fact of the cash payments when given the opportunity to do so goes a long way, in my view, to supporting my position that the financial dealings between Mr. Schreiber and Mr. Mulroney were inappropriate,” Oliphant said.
“Simply put, Mr. Mulroney, in his business and financial dealings with Mr. Schreiber, failed to live up to the standard of conduct that he had himself adopted in the 1985 ethics code.
Mulroney has admitted receiving $225,000 in cash-filled envelopes from Schreiber during surreptitious exchanges in hotel rooms in the early 1990s — and keeping it secret for years. But he insisted it was for legal consulting work, not for lobbying government as Schreiber claimed.
The judge didn’t buy Mulroney’s claims that he lobbied a series of international leaders — most of the now dead — on behalf of a Schreiber-backed scheme to build German-designed armoured military vehicles in Canada and sell the abroad.
”I must view with skepticism Mr. Mulroney’s claim to have spoken to the leaders referred to,” he wrote.
Oliphant repeatedly said he didn’t accept Mulroney’s version of events. For instance, Mulroney said it was an error in judgment to accept cash from Schreiber.
”I confess to having a considerable problem with that explanation,” Oliphant wrote.
Mulroney could easily have corrected that error by asking for a cheque, or issuing a receipt, or depositing the money formally in a bank account, he noted.
He also noted that Mulroney was a sophisticated businessman who had just finished nine years as prime minister: ”I am therefore unable to accept as credible that he would repeat the exact same error in judgment that he made on Aug. 27, 1993 by accepting cash from Mr. Schreiber on two further occasions.”
The report is not likely to provide much satisfaction for long-suffering taxpayers who’ve shelled out $14.1 million for the commission of inquiry and another $1.8 million to cover Mulroney’s legal fees.
Oliphant was precluded by the terms of reference crafted by the Harper government from making any findings of criminal or civil liability. He was specifically barred from revisiting allegations that Mulroney and Schreiber were involved in a kickback scheme at the time of Air Canada’s $1.8-billion purchase of Airbus jets in 1988.
Nor was he allowed to revisit the $2.1-million libel settlement Mulroney won from the federal government in 1997 as a result of the RCMP’s Airbus investigation — all the while insisting he barely knew Schreiber.
Rather, Oliphant’s two-year inquiry was limited to 17 questions surrounding Mulroney’s involvement in the so-called Bear Head project, which would have seen German firm Thyssen AG set up a plant in Canada to build and export armoured military vehicles.
Oliphant did, however, clear the air over a matter which threatened to drag the Harper government into the whole Schreiber affair.
Schreiber sent a letter to Harper in March 2007 which was headed off in the Privy Council Office.
The judge said that was an error on the part of a functionary who decided to file the letter without reply and didn’t bring it to the attention of a superior. He found no evidence that anyone wanted to hide the letter from the Prime Minister’s Office.
Mulroney was to moderate a panel discussion Monday night in Toronto on freedom of speech, featuring Nobel Peace Prize winner Elie Wiesel and internationally acclaimed novelist Salman Rushdie.
Schreiber has begun serving an eight-year sentence in a German prison after being convicted of tax evasion.