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Mulroney was broke when he took Schreiber payment: spokesman
BRODIE FENLON
Globe and Mail Update
November 21, 2007 at 4:49 PM EST
Brian Mulroney was in financial straits and worried about his future when the former prime minister made the “colossal mistake” of accepting a $100,000 cash payment while still a member of parliament, his spokesman says.
Luc Lavoie expanded significantly Wednesday on previously known details about the first transaction between Mr. Mulroney and German business man Karlheinz Schreiber in late August 1993.
Mr. Lavoie refused to comment on whether the cash payment violated conflict of interest and ethics codes for public office holders, but he insisted Mr. Mulroney broke no laws when he accepted the payments.
At the time, Mr. Mulroney was cash-strapped and worried about the future, Mr. Lavoie said.
“Mr. Mulroney is not a wealthy man. He doesn't come from a wealthy family ... Whatever savings he had he had spent while he was prime minister,” he said.
“Prior to entering politics, he was the CEO of a major corporation and still had children when he left politics and he wanted to offer them the kind of living that they had before he entered politics,” Mr. Lavoie said.
“The one thing that is important is that even though he considers this to be a mistake and makes no secret about it when you speak with him, one has to remember that as much as it was a mistake, it was not illegal,” he said.
Mr. Lavoie said Mr. Schreiber met Mr. Mulroney at the Chateau Mirabel to pitch a job to the former prime minister as a consultant on projects with an “international dimension” – including a military vehicle plant in Montreal and a pasta business.
Mr. Lavoie said the meeting occurred about a week before the federal election, while Mr. Mulroney was still an MP for Baie Comeau, Que. Mr. Schreiber claims in a sworn affidavit the meeting happened “on or about August 27, 1993.”
In a published report, Mr. Lavoie also suggested Mr. Mulroney was surprised when Mr. Schreiber pulled out an envelope stuffed with cash.
“Then he said ‘I would give you $100,000 a year' and then he pulled out an envelope with $100,000 and Mr. Mulroney said ‘what is that.' He said ‘well, I want to pay you in cash.' So Mr. Mulroney asked a few questions. ‘Why would you do this in cash' and all that,” Mr. Lavoie told the Ottawa Citizen. “Mr. Mulroney admits today that he made a colossal mistake.”
Mr. Lavoie confirmed his statement, but would not elaborate for globeandmail.com. “I'm not going to feed the monster ... I've said enough,” he said.
In 1999, Mr. Lavoie vehemently denied Mr. Mulroney had ever received payments from Mr. Schreiber, although the spokesman insists he was talking only about payments made in connection with an Airbus deal.
“There never was any money,” he told a producer with CBC's the fifth estate. “And to think otherwise is really to not know Mulroney. He is too smart to do something like that. It is just too dummy. It is too damn stupid. He wouldn't do that."
Mr. Mulroney testified under oath in 1996 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.” Mr. Mulroney has long maintained that he didn't disclose his business arrangement with Mr. Schreiber while testifying at the discovery for his lawsuit against the Justice Department because he was never asked about it by government lawyers.
Mr. Schreiber alleges in a recent sworn affidavit that he and Mr. Mulroney agreed to a deal on the money on June 23, 1993 during a meeting at Harrington Lake, while the latter was still prime minister – a claim Mr. Mulroney denies.
The Schreiber-Mulroney affair, which will be the subject of a full public inquiry next year, goes back to the sale of Airbus planes to Air Canada in the 1980s. After the sale, it emerged that Airbus had a secret contract with a shell company connected to Mr. Schreiber. As a result of that contract, about $20-million in secret commissions were funnelled into Swiss bank accounts controlled by Mr. Schreiber.
Mr. Schreiber has never detailed what service he provided for the commissions or where he dispersed them, except to say that one recipient was the late Frank Moores, a lobbyist and former Conservative premier of Newfoundland.
The Canadian government alleged in a letter to Swiss authorities in 1995 that Mr. Mulroney was involved in illegal activities in relation to the commissions. Mr. Mulroney sued the government for defamation when he learned of the letter, winning an apology and a $2.1-million settlement.
In the 1996 hearings that preceded the settlement, Mr. Mulroney played down his relationship with Mr. Schreiber.
But Mr. Mulroney and Mr. Schreiber had established a financial relationship that involved more than courtesy calls, with Mr. Schreiber paying him $300,000 in three cash instalments in hotels in 1993 and 1994. Government officials have said the lawsuit would have been resolved differently had they known about the payments.
Mr. Mulroney's relationship with Mr. Schreiber is again under review by the RCMP, which said it would reexamine the case after new allegations surfaced in Mr. Schreiber's most recent affidavit.
Meanwhile, Mr. Schreiber faces extradition to Germany on an assortment of fraud and bribery charges as early as Dec. 1, although it is expected he will appeal the deportation order to the Supreme Court.
