Airbus affair
Encyclopedia
The Airbus affair refers to allegations of secret commissions paid to members of the Government of Canada
during the term of Prime Minister
Brian Mulroney
, in exchange for then-crown corporation Air Canada
's purchase of a large number of Airbus
jets. The Chairman of Airbus (a Europe
an consortium) at the time of the contract competition was Franz Josef Strauss (1915–1988), a high profile German
politician in Bavaria
.
The order in question had long been pending, and both Boeing
and Airbus Industrie had been competing heavily for the contract. Both offered shared production in Canada, and Boeing went so far as to buy de Havilland Canada
to further strengthen their bargaining position, as well as gain access to the feederliner market where they, at that time, had no presence. The contract was eventually won by Airbus in 1988, with an order for 34 Airbus A320
s, as well as the sale of some of Air Canada's existing Boeing 747
fleet. Boeing immediately put de Havilland up for sale, thereby putting that company in jeopardy, but the blame for this was generally placed on the government.
(RCMP) accused Mulroney and Frank Moores
of accepting kickbacks from Karlheinz Schreiber
on the sale of Airbus planes to the government-owned airline during Mulroney's term as Prime Minister of Canada
. The allegations were made in a letter sent by the RCMP to the government of Switzerland
seeking access to banking records. Schreiber had earlier raised money for Mulroney's successful 1983 bid to win the leadership of the Progressive Conservative Party
.
Mulroney denied the allegations, and launched a $50 million defamation suit against the Canadian government, alleging that the newly elected Liberal
government of Jean Chrétien
was engaging in a smear campaign against its predecessor. The government settled out of court in early 1997, and agreed to publicly apologize to Mulroney, as well as paying the former prime minister's $2.1 million legal fees.
Although there is no evidence that Mulroney accepted kickbacks while prime minister, he acknowledged in 2003 that shortly after stepping down in 1993 that he accepted $225,000 over 18 months from Schreiber, in three cash payments of $75,000 each. Mulroney was still a member of the Canadian House of Commons
when one of the payments was made. Mulroney claims that this money was paid to him for consulting services he rendered to help promote a fresh pasta business, and to develop international contacts for Schreiber. Mulroney had previously not admitted accepting any commissions from Schreiber during his lawsuit against the Canadian government, and later under oath specifically denied any business dealings with him. Mulroney has not yet provided evidence of any work he performed for that money, and declared it as income to Revenue Canada only years later, when Schreiber had come under criminal investigation in Germany. Schreiber ridiculed their dealings in pasta-macaroni as nothing more than being sent a single flyer, and has stated that the three separate payments were actually $100,000 each in $1000 bills, a total of $300,000.
wrote about the Airbus scandal, and Schreiber's links to the Mulroney government, in her 1994 best-selling book On the Take: Crime, Corruption and Greed in the Mulroney Years. CBC's The Fifth Estate
produced a documentary in March 1995 which revealed, for the first time, a secret side agreement between Airbus Industrie and a Liechtenstein shell company, International Aircraft Leasing, or IAL. The fifth estate reported that IAL received millions of dollars in secret commissions after the sale of Airbus aircraft to Air Canada in 1988. William Kaplan
responded to Cameron and the CBC programme in his 1998 book Presumed Guilty, criticizing journalists for the paucity of evidence. Then, in October 1999, CBC's the fifth estate obtained new Swiss Bank Corporation
records which revealed that Karlheinz Schreiber had set up a secret bank account in Zurich with the code-name "Britan". The fifth estate programme revealed there had been three cash withdrawals out of the account, in 1993 and 1994, for a total of $300,000. Two years later, in 2001, Stevie Cameron and fifth estate producer Harvey Cashore, wrote a book about Karlheinz Schreiber The Last Amigo. In 2004, William Kaplan clarified his position in a further book A Secret Trial, by criticizing Cameron for her role as a confidential RCMP informant on the Airbus matter, and Mulroney for not disclosing the fact that he had received the $300,000 from Schreiber.
On February 8, 2006, The Fifth Estate reported that the $300,000 payment came through a Swiss bank account code-named "BRITAN" from another named "Frankfurt", linked with the Airbus affair. Karlheinz Schreiber said in an interview with the program that the money came at the request of a Mulroney aide, who told Schreiber the former prime minister was short of funds. Schreiber mocked Mulroney's claim that the money was a consulting fee for help given in a pasta business Schreiber had invested in. The programme also reported there was no evidence that Mulroney knew of the source of the funds.
On October 31, 2007 The Globe and Mail
and The Fifth Estate reported new information about the cash transactions between Schreiber and Mulroney, revealing that Brian Mulroney filed a Voluntary Disclosure with Revenue Canada several years after accepting the cash envelopes from Karlheinz Schreiber.
on December 8, 1994, should have declared those funds when he crossed the border into Canada several days later, if he had not already spent the money. The story quoted retired RCMP inspector Bruce Bowie, who had played a role in preparing the original Canadian legislation, requiring that large cash transactions be reported, which was passed through parliament during Mulroney's own prime ministership. Internal United States rules also require that large cash transactions be recorded, and whether Mulroney did so for this transaction was an open question, according to the Globe and Mail article.
On November 8, 2007, an affidavit, including further allegations by Mr. Schreiber, was filed with the court. The following day, Prime Minister Stephen Harper
announced that a third-party independent inquiry would be launched to review the dealings between Schreiber and Mulroney, in the light of the additional allegations raised by this new development.
On November 13, 2007, Prime Minister Harper announced that a full public inquiry would take place. The next day, Harper announced that the probe would be headed by David Lloyd Johnston
, president of the University of Waterloo
. Johnston will advise on the terms of reference for the inquiry, and will report by January 11, 2008. The RCMP announced on November 14, 2007, that they would also open a review process into these matters; the RCMP had been involved in an investigation of these matters from the late 1980s onwards. In June 2008, the Government of Canada established the "Commission of Inquiry into Certain Allegations Respecting Business and Financial Dealings Between Karlheinz Schreiber and the Right Honourable Brian Mulroney"
On November 15, 2007, Schreiber lost his appeal of extradition
to Germany
, and he remained confined in the Toronto
area, pending further developments. Extradition proceedings against Schreiber, launched by German authorities, began in 1999; Schreiber is wanted in Germany to answer for several criminal charges, including fraud and bribery, which had a role in bringing down a government there, and which damaged the legacy of former German Chancellor Helmut Kohl
. Schreiber stated on November 16, 2007 that if extradited, he would not cooperate with the inquiry.
Minister of Public Safety Stockwell Day
said later that day that the inquiry would be structured to allow witnesses to testify regardless of their location, and that Schreiber would have to testify. Opposition parties in the Canadian House of Commons
called for Schreiber's extradition to be delayed, to allow him to take part in the inquiry. Minister of Justice
Rob Nicholson
promised to delay the extradition until at least December 1, 2007, to allow potential appeals to be filed by Schreiber's lawyer Edward Greenspan
.
, and was transported from Toronto
to Ottawa
on November 28, 2007. He testified before the House of Commons Ethics Committee
on November 29, December 4, and December 6, 2007. Schreiber obtained a stay of his extradition from the Ontario Court of Appeal on November 30, and obtained bail on December 4 by posting $1.3 million. Schreiber explained that the $300,000 he paid to Mulroney in three cash installments of $100,000 each, in 1993 and 1994, did not come directly from Airbus, but was drawn from 'success fees', money Schreiber earned in commissions for his lobbying work on behalf of Airbus, MBB, and Thyssen, in the late 1980s and early 1990s. Airbus and MBB had concluded large contracts, for airplanes and helicopters respectively, with the Canadian government while Mulroney was prime minister. Thyssen's project, a prospective new factory for manufacturing light armoured vehicles, had gained initial government approval, but was never built. Schreiber explained further that the money he paid to Mulroney was not for any work Mulroney did while he was prime minister from 1984–1993, but was a retainer for future work Mulroney would do for Schreiber after he left political office, as well as a reward for Mulroney's support for German reunification, which was achieved in 1991. This amount was originally set for $500,000, but was reduced because Mulroney did not in fact perform the work, according to Schreiber, who is suing Mulroney to recover that money. Mulroney refused to comment in advance of his scheduled appearance before the Ethics Committee on December 13, 2007. However, six weeks following his appearance, Mulroney's lawyers submitted a letter to the Ethics Committee chairman, Paul Szabo
, indicating that their client would not be willing to appear again before the committee because of the "unfair" treatment he encountered on December 13. On February 26, 2008, CTV News
reported that Mr. Mulroney, through his lawyer, had reiterated his refusal to reappear before the Committee, scheduled for February 28. After mulling the possibility of issuing a subpoena
, the committee decided the next day that it would wrap up this activity without further testimony.
On February 14, 2008, Mr. Schreiber's Swiss accountant told the Ethics Committee that he did in fact set up a Swiss account for Mr Mulroney. He denied knowing about transactions made on that account by or for the former Prime Minister.
, it was specifically mandated to focus on the dealings between Schreiber and Mulroney. While the inquisitors and their questions were different, the answers by Mr. Schreiber in April and Mr. Mulroney in May were essentially paraphrasings and expansions on those of the Ethics Committee proceedings. Notable new revelations in Mulroney's testimonies included his explanation for the delay in declaring the cash payments as income (he considered them as advances on future activities, to be declared only when drawn upon), and that his accountant, without his knowledge, had arranged to pay tax on only half the amount. This was in accordance with a Canada Revenue Agency
amnesty incentive, now discontinued, that was intended to encourage delinquent taxpayers to submit late declarations, thus garnering funds which would otherwise have been lost or, at minimum, require costly legal action to be collected.
The Commission completed its hearings phase in the last week of July 2009. The following weekend Mr. Schreiber, after a last-ditch effort to find another means of avoiding extradition, was ordered to appear at the Toronto Detention Centre pending his return to Germany. Within three hours, he was escorted onto a Europe
-bound aircraft by two RCMP officers, and designated "surrendered to Germany."
The Commission's report, released on May 31, 2010, included the following findings:
The report intentionally avoids "expressing any conclusions ... regarding civil or criminal liability" based on the Commission's mandate and Oliphant wrote that he was "careful not to use language that would even hint at such a finding".
Government of Canada
The Government of Canada, formally Her Majesty's Government, is the system whereby the federation of Canada is administered by a common authority; in Canadian English, the term can mean either the collective set of institutions or specifically the Queen-in-Council...
during the term of Prime Minister
Prime Minister of Canada
The Prime Minister of Canada is the primary minister of the Crown, chairman of the Cabinet, and thus head of government for Canada, charged with advising the Canadian monarch or viceroy on the exercise of the executive powers vested in them by the constitution...
Brian Mulroney
Brian Mulroney
Martin Brian Mulroney, was the 18th Prime Minister of Canada from September 17, 1984, to June 25, 1993 and was leader of the Progressive Conservative Party of Canada from 1983 to 1993. His tenure as Prime Minister was marked by the introduction of major economic reforms, such as the Canada-U.S...
, in exchange for then-crown corporation Air Canada
Air Canada
Air Canada is the flag carrier and largest airline of Canada. The airline, founded in 1936, provides scheduled and charter air transport for passengers and cargo to 178 destinations worldwide. It is the world's tenth largest passenger airline by number of destinations, and the airline is a...
's purchase of a large number of Airbus
Airbus
Airbus SAS is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Blagnac, France, surburb of Toulouse, and with significant activity across Europe, the company produces around half of the world's jet airliners....
jets. The Chairman of Airbus (a Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
an consortium) at the time of the contract competition was Franz Josef Strauss (1915–1988), a high profile German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
politician in Bavaria
Bavaria
Bavaria, formally the Free State of Bavaria is a state of Germany, located in the southeast of Germany. With an area of , it is the largest state by area, forming almost 20% of the total land area of Germany...
.
The order in question had long been pending, and both Boeing
Boeing
The Boeing Company is an American multinational aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001...
and Airbus Industrie had been competing heavily for the contract. Both offered shared production in Canada, and Boeing went so far as to buy de Havilland Canada
De Havilland Canada
The de Havilland Aircraft of Canada Ltd. company was an aircraft manufacturer with facilities based in what is now the Downsview area of Toronto, Ontario, Canada...
to further strengthen their bargaining position, as well as gain access to the feederliner market where they, at that time, had no presence. The contract was eventually won by Airbus in 1988, with an order for 34 Airbus A320
Airbus A320
The Airbus A320 family is a family of short- to medium-range, narrow-body, commercial passenger jet airliners manufactured by Airbus Industrie.Airbus was originally a consortium of European aerospace companies, and is now fully owned by EADS. Airbus's name has been Airbus SAS since 2001...
s, as well as the sale of some of Air Canada's existing Boeing 747
Boeing 747
The Boeing 747 is a wide-body commercial airliner and cargo transport, often referred to by its original nickname, Jumbo Jet, or Queen of the Skies. It is among the world's most recognizable aircraft, and was the first wide-body ever produced...
fleet. Boeing immediately put de Havilland up for sale, thereby putting that company in jeopardy, but the blame for this was generally placed on the government.
RCMP allegations
In 1995, the Royal Canadian Mounted PoliceRoyal Canadian Mounted Police
The Royal Canadian Mounted Police , literally ‘Royal Gendarmerie of Canada’; colloquially known as The Mounties, and internally as ‘The Force’) is the national police force of Canada, and one of the most recognized of its kind in the world. It is unique in the world as a national, federal,...
(RCMP) accused Mulroney and Frank Moores
Frank Moores
Frank Duff Moores served as the 2nd Premier of Newfoundland. He served as leader of the Progressive Conservatives from 1972 until his retirement in 1979.-Early life:...
of accepting kickbacks from Karlheinz Schreiber
Karlheinz Schreiber
Friedrich Karlheinz Hermann Schreiber is a German and Canadian citizen, an industrialist, lobbyist, fundraiser, arms dealer and businessman...
on the sale of Airbus planes to the government-owned airline during Mulroney's term as Prime Minister of Canada
Prime Minister of Canada
The Prime Minister of Canada is the primary minister of the Crown, chairman of the Cabinet, and thus head of government for Canada, charged with advising the Canadian monarch or viceroy on the exercise of the executive powers vested in them by the constitution...
. The allegations were made in a letter sent by the RCMP to the government of Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
seeking access to banking records. Schreiber had earlier raised money for Mulroney's successful 1983 bid to win the leadership of the Progressive Conservative Party
Progressive Conservative Party of Canada
The Progressive Conservative Party of Canada was a Canadian political party with a centre-right stance on economic issues and, after the 1970s, a centrist stance on social issues....
.
Mulroney denied the allegations, and launched a $50 million defamation suit against the Canadian government, alleging that the newly elected Liberal
Liberal Party of Canada
The Liberal Party of Canada , colloquially known as the Grits, is the oldest federally registered party in Canada. In the conventional political spectrum, the party sits between the centre and the centre-left. Historically the Liberal Party has positioned itself to the left of the Conservative...
government of Jean Chrétien
Jean Chrétien
Joseph Jacques Jean Chrétien , known commonly as Jean Chrétien is a former Canadian politician who was the 20th Prime Minister of Canada. He served in the position for over ten years, from November 4, 1993 to December 12, 2003....
was engaging in a smear campaign against its predecessor. The government settled out of court in early 1997, and agreed to publicly apologize to Mulroney, as well as paying the former prime minister's $2.1 million legal fees.
Although there is no evidence that Mulroney accepted kickbacks while prime minister, he acknowledged in 2003 that shortly after stepping down in 1993 that he accepted $225,000 over 18 months from Schreiber, in three cash payments of $75,000 each. Mulroney was still a member of the Canadian House of Commons
Canadian House of Commons
The House of Commons of Canada is a component of the Parliament of Canada, along with the Sovereign and the Senate. The House of Commons is a democratically elected body, consisting of 308 members known as Members of Parliament...
when one of the payments was made. Mulroney claims that this money was paid to him for consulting services he rendered to help promote a fresh pasta business, and to develop international contacts for Schreiber. Mulroney had previously not admitted accepting any commissions from Schreiber during his lawsuit against the Canadian government, and later under oath specifically denied any business dealings with him. Mulroney has not yet provided evidence of any work he performed for that money, and declared it as income to Revenue Canada only years later, when Schreiber had come under criminal investigation in Germany. Schreiber ridiculed their dealings in pasta-macaroni as nothing more than being sent a single flyer, and has stated that the three separate payments were actually $100,000 each in $1000 bills, a total of $300,000.
Media/journalistic coverage
Journalist Stevie CameronStevie Cameron
Stevie Cameron is an award-winning Canadian investigative journalist and best-selling author. Born in Belleville, Ontario in 1943, she now lives in Toronto with her husband, David Cameron, a professor at the University of Toronto. They have two daughters; both Toronto-based screenwriters.-Early...
wrote about the Airbus scandal, and Schreiber's links to the Mulroney government, in her 1994 best-selling book On the Take: Crime, Corruption and Greed in the Mulroney Years. CBC's The Fifth Estate
The fifth estate
the fifth estate is a Canadian television newsmagazine, which airs on the English language CBC Television network. The name is a play on the fact that the media are sometimes referred to as the Fourth Estate, and was chosen to highlight the program's determination to go beyond everyday news into...
produced a documentary in March 1995 which revealed, for the first time, a secret side agreement between Airbus Industrie and a Liechtenstein shell company, International Aircraft Leasing, or IAL. The fifth estate reported that IAL received millions of dollars in secret commissions after the sale of Airbus aircraft to Air Canada in 1988. William Kaplan
William Kaplan
William Kaplan is a Canadian lawyer and writer.-Biography:William Kaplan is the son of Igor Kaplan and Cara Cherniak. He graduated from the University of Toronto in 1980 with a Bachelor of Arts degree. He went on to Osgoode Hall Law School at York University, where he graduated in 1983 with a...
responded to Cameron and the CBC programme in his 1998 book Presumed Guilty, criticizing journalists for the paucity of evidence. Then, in October 1999, CBC's the fifth estate obtained new Swiss Bank Corporation
Swiss Bank Corporation
Swiss Bank Corporation was a large integrated financial services company located in Switzerland...
records which revealed that Karlheinz Schreiber had set up a secret bank account in Zurich with the code-name "Britan". The fifth estate programme revealed there had been three cash withdrawals out of the account, in 1993 and 1994, for a total of $300,000. Two years later, in 2001, Stevie Cameron and fifth estate producer Harvey Cashore, wrote a book about Karlheinz Schreiber The Last Amigo. In 2004, William Kaplan clarified his position in a further book A Secret Trial, by criticizing Cameron for her role as a confidential RCMP informant on the Airbus matter, and Mulroney for not disclosing the fact that he had received the $300,000 from Schreiber.
On February 8, 2006, The Fifth Estate reported that the $300,000 payment came through a Swiss bank account code-named "BRITAN" from another named "Frankfurt", linked with the Airbus affair. Karlheinz Schreiber said in an interview with the program that the money came at the request of a Mulroney aide, who told Schreiber the former prime minister was short of funds. Schreiber mocked Mulroney's claim that the money was a consulting fee for help given in a pasta business Schreiber had invested in. The programme also reported there was no evidence that Mulroney knew of the source of the funds.
On October 31, 2007 The Globe and Mail
The Globe and Mail
The Globe and Mail is a nationally distributed Canadian newspaper, based in Toronto and printed in six cities across the country. With a weekly readership of approximately 1 million, it is Canada's largest-circulation national newspaper and second-largest daily newspaper after the Toronto Star...
and The Fifth Estate reported new information about the cash transactions between Schreiber and Mulroney, revealing that Brian Mulroney filed a Voluntary Disclosure with Revenue Canada several years after accepting the cash envelopes from Karlheinz Schreiber.
Cash payments
The Globe and Mail reported on November 1, 2007 that Mulroney, who had by his own admission received $75,000 of Schreiber's stated $300,000 in cash in New York CityNew York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
on December 8, 1994, should have declared those funds when he crossed the border into Canada several days later, if he had not already spent the money. The story quoted retired RCMP inspector Bruce Bowie, who had played a role in preparing the original Canadian legislation, requiring that large cash transactions be reported, which was passed through parliament during Mulroney's own prime ministership. Internal United States rules also require that large cash transactions be recorded, and whether Mulroney did so for this transaction was an open question, according to the Globe and Mail article.
On November 8, 2007, an affidavit, including further allegations by Mr. Schreiber, was filed with the court. The following day, Prime Minister Stephen Harper
Stephen Harper
Stephen Joseph Harper is the 22nd and current Prime Minister of Canada and leader of the Conservative Party. Harper became prime minister when his party formed a minority government after the 2006 federal election...
announced that a third-party independent inquiry would be launched to review the dealings between Schreiber and Mulroney, in the light of the additional allegations raised by this new development.
On November 13, 2007, Prime Minister Harper announced that a full public inquiry would take place. The next day, Harper announced that the probe would be headed by David Lloyd Johnston
David Lloyd Johnston
David Lloyd Johnston is a Canadian academic, author and statesman who is the current Governor General of Canada, the 28th since Canadian Confederation....
, president of the University of Waterloo
University of Waterloo
The University of Waterloo is a comprehensive public university in the city of Waterloo, Ontario, Canada. The school was founded in 1957 by Drs. Gerry Hagey and Ira G. Needles, and has since grown to an institution of more than 30,000 students, faculty, and staff...
. Johnston will advise on the terms of reference for the inquiry, and will report by January 11, 2008. The RCMP announced on November 14, 2007, that they would also open a review process into these matters; the RCMP had been involved in an investigation of these matters from the late 1980s onwards. In June 2008, the Government of Canada established the "Commission of Inquiry into Certain Allegations Respecting Business and Financial Dealings Between Karlheinz Schreiber and the Right Honourable Brian Mulroney"
On November 15, 2007, Schreiber lost his appeal of extradition
Extradition
Extradition is the official process whereby one nation or state surrenders a suspected or convicted criminal to another nation or state. Between nation states, extradition is regulated by treaties...
to Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, and he remained confined in the Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
area, pending further developments. Extradition proceedings against Schreiber, launched by German authorities, began in 1999; Schreiber is wanted in Germany to answer for several criminal charges, including fraud and bribery, which had a role in bringing down a government there, and which damaged the legacy of former German Chancellor Helmut Kohl
Helmut Kohl
Helmut Josef Michael Kohl is a German conservative politician and statesman. He was Chancellor of Germany from 1982 to 1998 and the chairman of the Christian Democratic Union from 1973 to 1998...
. Schreiber stated on November 16, 2007 that if extradited, he would not cooperate with the inquiry.
Minister of Public Safety Stockwell Day
Stockwell Day
Stockwell Burt Day, Jr., PC, MP is a former Canadian politician, and a member of the Conservative Party of Canada. He is a former cabinet minister in Alberta, and a former leader of the Canadian Alliance. Day was MP for the riding of Okanagan—Coquihalla in British Columbia and the president of...
said later that day that the inquiry would be structured to allow witnesses to testify regardless of their location, and that Schreiber would have to testify. Opposition parties in the Canadian House of Commons
Canadian House of Commons
The House of Commons of Canada is a component of the Parliament of Canada, along with the Sovereign and the Senate. The House of Commons is a democratically elected body, consisting of 308 members known as Members of Parliament...
called for Schreiber's extradition to be delayed, to allow him to take part in the inquiry. Minister of Justice
Minister of Justice (Canada)
The Minister of Justice is the Minister of the Crown in the Canadian Cabinet who is responsible for the Department of Justice and is also Attorney General of Canada .This cabinet position is usually reserved for someone with formal legal training...
Rob Nicholson
Rob Nicholson
Robert Douglas "Rob" Nicholson, PC, QC, MP , is the Minister of Justice and Attorney General of Canada. He is a current member of the Canadian House of Commons, representing the riding of Niagara Falls for the Conservative Party and the current Minister of Justice after serving for one year as...
promised to delay the extradition until at least December 1, 2007, to allow potential appeals to be filed by Schreiber's lawyer Edward Greenspan
Edward Greenspan
Edward Leonard Greenspan, QC is a Canadian lawyer and prolific author of legal volumes. He is one of the most famous defence lawyers in Canada, owing to several high-profile clients and to his national exposure on the popular Canadian Broadcasting Corporation radio series, The Scales of Justice .A...
.
Ethics Committee testimony
Schreiber was summoned from jail by a Speaker's Warrant issued by Commons Speaker Peter MillikenPeter Milliken
Peter Andrew Stewart Milliken, UE is a Canadian lawyer and politician. He was a member of the Canadian House of Commons from 1988 until his retirement in 2011 and served as Speaker of the House for 10 years beginning in 2001. Milliken represented the Ontario riding of Kingston and the Islands as a...
, and was transported from Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
to Ottawa
Ottawa
Ottawa is the capital of Canada, the second largest city in the Province of Ontario, and the fourth largest city in the country. The city is located on the south bank of the Ottawa River in the eastern portion of Southern Ontario...
on November 28, 2007. He testified before the House of Commons Ethics Committee
Canadian House of Commons Standing Committee on Access to Information, Privacy and Ethics
The Canadian House of Commons Standing Committee on Access to Information, Privacy and Ethics is a permanent standing committee of the Canadian House of Commons that reports to the Parliament of Canada on issues related to ethics and the Access to Information Act. The committee may be referred to...
on November 29, December 4, and December 6, 2007. Schreiber obtained a stay of his extradition from the Ontario Court of Appeal on November 30, and obtained bail on December 4 by posting $1.3 million. Schreiber explained that the $300,000 he paid to Mulroney in three cash installments of $100,000 each, in 1993 and 1994, did not come directly from Airbus, but was drawn from 'success fees', money Schreiber earned in commissions for his lobbying work on behalf of Airbus, MBB, and Thyssen, in the late 1980s and early 1990s. Airbus and MBB had concluded large contracts, for airplanes and helicopters respectively, with the Canadian government while Mulroney was prime minister. Thyssen's project, a prospective new factory for manufacturing light armoured vehicles, had gained initial government approval, but was never built. Schreiber explained further that the money he paid to Mulroney was not for any work Mulroney did while he was prime minister from 1984–1993, but was a retainer for future work Mulroney would do for Schreiber after he left political office, as well as a reward for Mulroney's support for German reunification, which was achieved in 1991. This amount was originally set for $500,000, but was reduced because Mulroney did not in fact perform the work, according to Schreiber, who is suing Mulroney to recover that money. Mulroney refused to comment in advance of his scheduled appearance before the Ethics Committee on December 13, 2007. However, six weeks following his appearance, Mulroney's lawyers submitted a letter to the Ethics Committee chairman, Paul Szabo
Paul Szabo
Paul John Mark Szabo is a Canadian politician. He is a former member of the Canadian House of Commons, representing the riding of Mississauga South for the Liberal Party.-Early life and education:...
, indicating that their client would not be willing to appear again before the committee because of the "unfair" treatment he encountered on December 13. On February 26, 2008, CTV News
CTV News
CTV News is the news division of the CTV Television Network in Canada. The name CTV News is also applied as the title of local and regional newscasts on the network's owned-and-operated stations , which are closely tied to the national news division...
reported that Mr. Mulroney, through his lawyer, had reiterated his refusal to reappear before the Committee, scheduled for February 28. After mulling the possibility of issuing a subpoena
Subpoena
A subpoena is a writ by a government agency, most often a court, that has authority to compel testimony by a witness or production of evidence under a penalty for failure. There are two common types of subpoena:...
, the committee decided the next day that it would wrap up this activity without further testimony.
On February 14, 2008, Mr. Schreiber's Swiss accountant told the Ethics Committee that he did in fact set up a Swiss account for Mr Mulroney. He denied knowing about transactions made on that account by or for the former Prime Minister.
Oliphant Commission Report
In April and May 2009, the next episode ensued as the Oliphant Commission inquiry began. Chaired by Mr. Justice Jeffrey Oliphant, Associate Chief Justice of the Court of Queen's Bench of ManitobaCourt of Queen's Bench of Manitoba
The Court of Queen's Bench of Manitoba is the superior court of the Canadian province of Manitoba...
, it was specifically mandated to focus on the dealings between Schreiber and Mulroney. While the inquisitors and their questions were different, the answers by Mr. Schreiber in April and Mr. Mulroney in May were essentially paraphrasings and expansions on those of the Ethics Committee proceedings. Notable new revelations in Mulroney's testimonies included his explanation for the delay in declaring the cash payments as income (he considered them as advances on future activities, to be declared only when drawn upon), and that his accountant, without his knowledge, had arranged to pay tax on only half the amount. This was in accordance with a Canada Revenue Agency
Canada Revenue Agency
The Canada Revenue Agency is a federal agency that administers tax laws for the Government of Canada and for most provinces and territories, international trade legislation, and various social and economic benefit and incentive programs delivered through the tax system...
amnesty incentive, now discontinued, that was intended to encourage delinquent taxpayers to submit late declarations, thus garnering funds which would otherwise have been lost or, at minimum, require costly legal action to be collected.
The Commission completed its hearings phase in the last week of July 2009. The following weekend Mr. Schreiber, after a last-ditch effort to find another means of avoiding extradition, was ordered to appear at the Toronto Detention Centre pending his return to Germany. Within three hours, he was escorted onto a Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
-bound aircraft by two RCMP officers, and designated "surrendered to Germany."
The Commission's report, released on May 31, 2010, included the following findings:
- That Mulroney entered into an agreement with Schreiber while Mulroney was a Member of Parliament, but not while still prime minister
- That Schreiber retained Mulroney to promote the sale of military vehicles in the international market (not within Canada), that three cash payments totaling at least CAD $225,000 were made by Schreiber to Mulroney in person, and that no services were ever provided by Mulroney for the monies paid
- That these business and financial dealings were inappropriate given Mr. Mulroney's position and that Mulroney repeatedly acted inappropriately in disclosure and reporting of the dealings and payments
The report intentionally avoids "expressing any conclusions ... regarding civil or criminal liability" based on the Commission's mandate and Oliphant wrote that he was "careful not to use language that would even hint at such a finding".
External links
- Oliphant Commission - Official Site (Library and Archives Canada)
- Money, Truth and Spin a CBC Fifth Estate investigation
- Mulroney was the real story by Stevie CameronStevie CameronStevie Cameron is an award-winning Canadian investigative journalist and best-selling author. Born in Belleville, Ontario in 1943, she now lives in Toronto with her husband, David Cameron, a professor at the University of Toronto. They have two daughters; both Toronto-based screenwriters.-Early...