By Jim Bronskill And Joan Bryden
OTTAWA (CP) - The Justice Department considered reopening a $2-million settlement with Brian Mulroney following conflicting accounts about his dealings with one of the principals in the Airbus probe, The Canadian Press has learned.
The legal review took place last February in light of allegations concerning a $300,000 cash payment to the former prime minister reported on the CBC's "The Fifth Estate," said Justice spokesman Christian Girouard. "The department took it upon itself to reassess that case," Girouard said in an interview. "This is a normal practice, to follow a high level of due diligence in legal matters and to look into any new information."
Lawyers from the Montreal office of the Justice Department were involved in the review, as were senior Ottawa bureaucrats.
Girouard declined to discuss the details of the review on the grounds they constitute confidential advice from lawyers and other Justice officials.
Girouard added, however: "The department considers the file closed."
The review, conducted shortly after the Conservatives took office, represents the latest - and perhaps final - chapter in the long-running Airbus saga.
Luc Lavoie, a spokesman for Mulroney, said the department's decision confirms "what we've been saying all along, and it is that there was nothing there."
Mulroney, prime minister from 1984 to 1993, is now a valued adviser to Prime Minister Stephen Harper and his Conservative government.
The federal Liberal government apologized to Mulroney in early 1997 for wording in a Justice Department letter to Swiss authorities two years earlier that left the impression he and others had received illegal payments in connection with the 1988 purchase of 34 Airbus Industrie jetliners by then Crown-owned Air Canada.
Federal authorities had also paid the former prime minister's $2-million legal bill.
The apology came just hours before Mulroney's $50-million libel suit against the government and the Mounties was to go to trial in Montreal.
The RCMP insisted at the time that despite the settlement its probe of the Airbus transaction was still actively being pursued. However, in an April 2003 statement, the police force said it had wrapped up its Airbus investigation.
Seven months later author William Kaplan, who has written extensively on the Airbus affair, revealed that German-Canadian businessman Karlheinz Schreiber - also named in the federal government's 1995 letter to Switzerland - had paid Mulroney $300,000 in a series of instalments beginning in 1993, shortly after he left office.
Lavoie says the money was compensation for help promoting Schreiber's pasta business as well arranging introductions and meetings with international business executives.
Schreiber told "The Fifth Estate" in a program broadcast last February that he gave the money to the former prime minister to help him ease back into private life.
Schreiber all but dismissed the notion Mulroney had aided his business efforts, saying the former prime minister had simply sent him a brochure from U.S. agri-food giant Archer Daniels Midland, where Mulroney was a director.
Lavoie noted in an interview that Schreiber had previously testified under oath that he had a paid retainer for business advice from Mulroney.
"Which one, in the balance of things, is the most important?" Lavoie asked of the two accounts.
As to why Mulroney was paid in cash, Lavoie said that's the way Schreiber did business. "All the retainers he had with people ... were paid in cash. Cash is legal tender, and as long as you pay your taxes what you're doing is legal."
Lavoie said all taxes were paid on the money, but would not reveal when, as it is "nobody's business."
The RCMP informed Mulroney in the summer of 2000 that they were aware of the $300,000 retainer from Schreiber, Lavoie said. "There were formal contacts between the RCMP and Mr. Mulroney's lawyer in which it was made clear that they knew that."
In the days following the CBC broadcast, notes intended for then-Justice Minister Vic Toews were assembled on the documentary report.
"The Government was not aware of Mr. Schreiber's payments to Mr. Mulroney when it settled the case," says a draft of a ministerial briefing note released under the Access to Information Act.
The note, prepared by an assistant deputy attorney general at Justice, includes "possible talking points" for Toews in the event he should be asked about reopening the settlement.
"My officials are reviewing the matter in light of "The Fifth Estate" report and will be providing me with advice in due course," the note says.
"You will appreciate that this is a matter that will require some degree of inquiry as it relates to a settlement negotiated just under 10 years ago. I will not speculate as to the possible result of that review."
Under the heading "Considerations," the draft briefing note says the federal deal with Mulroney is governed by Quebec law, which provides that a settlement contract may be set aside on the same grounds as any other contract.
One such ground involves a party to the contract committing fraud on the other so as to invalidate the deal, the briefing note says.
"To date, Justice has not been asked to consider whether an attempt should be made to set aside the settlement."
Concerning the newly broadcast details, the note says: "It is up to the RCMP to decide whether to reopen its investigation into the Airbus matter as a result of this information."
RCMP Sgt. Sylvie Tremblay said in an interview the force did not revisit the file.
The briefing material was never seen by Toews, "but it did make it to the deputy minister's level," said Girouard.
"When the senior management took into account all the circumstances, the briefing note was just never submitted for the minister's consideration."
A senior government official said there was no political input into the decision to drop the matter.
"Absolutely not, because there's a clear distinction between political and judicial (decisions) and there can be no interference."
OTTAWA (CP) - The Justice Department considered reopening a $2-million settlement with Brian Mulroney following conflicting accounts about his dealings with one of the principals in the Airbus probe, The Canadian Press has learned.
The legal review took place last February in light of allegations concerning a $300,000 cash payment to the former prime minister reported on the CBC's "The Fifth Estate," said Justice spokesman Christian Girouard. "The department took it upon itself to reassess that case," Girouard said in an interview. "This is a normal practice, to follow a high level of due diligence in legal matters and to look into any new information."
Lawyers from the Montreal office of the Justice Department were involved in the review, as were senior Ottawa bureaucrats.
Girouard declined to discuss the details of the review on the grounds they constitute confidential advice from lawyers and other Justice officials.
Girouard added, however: "The department considers the file closed."
The review, conducted shortly after the Conservatives took office, represents the latest - and perhaps final - chapter in the long-running Airbus saga.
Luc Lavoie, a spokesman for Mulroney, said the department's decision confirms "what we've been saying all along, and it is that there was nothing there."
Mulroney, prime minister from 1984 to 1993, is now a valued adviser to Prime Minister Stephen Harper and his Conservative government.
The federal Liberal government apologized to Mulroney in early 1997 for wording in a Justice Department letter to Swiss authorities two years earlier that left the impression he and others had received illegal payments in connection with the 1988 purchase of 34 Airbus Industrie jetliners by then Crown-owned Air Canada.
Federal authorities had also paid the former prime minister's $2-million legal bill.
The apology came just hours before Mulroney's $50-million libel suit against the government and the Mounties was to go to trial in Montreal.
The RCMP insisted at the time that despite the settlement its probe of the Airbus transaction was still actively being pursued. However, in an April 2003 statement, the police force said it had wrapped up its Airbus investigation.
Seven months later author William Kaplan, who has written extensively on the Airbus affair, revealed that German-Canadian businessman Karlheinz Schreiber - also named in the federal government's 1995 letter to Switzerland - had paid Mulroney $300,000 in a series of instalments beginning in 1993, shortly after he left office.
Lavoie says the money was compensation for help promoting Schreiber's pasta business as well arranging introductions and meetings with international business executives.
Schreiber told "The Fifth Estate" in a program broadcast last February that he gave the money to the former prime minister to help him ease back into private life.
Schreiber all but dismissed the notion Mulroney had aided his business efforts, saying the former prime minister had simply sent him a brochure from U.S. agri-food giant Archer Daniels Midland, where Mulroney was a director.
Lavoie noted in an interview that Schreiber had previously testified under oath that he had a paid retainer for business advice from Mulroney.
"Which one, in the balance of things, is the most important?" Lavoie asked of the two accounts.
As to why Mulroney was paid in cash, Lavoie said that's the way Schreiber did business. "All the retainers he had with people ... were paid in cash. Cash is legal tender, and as long as you pay your taxes what you're doing is legal."
Lavoie said all taxes were paid on the money, but would not reveal when, as it is "nobody's business."
The RCMP informed Mulroney in the summer of 2000 that they were aware of the $300,000 retainer from Schreiber, Lavoie said. "There were formal contacts between the RCMP and Mr. Mulroney's lawyer in which it was made clear that they knew that."
In the days following the CBC broadcast, notes intended for then-Justice Minister Vic Toews were assembled on the documentary report.
"The Government was not aware of Mr. Schreiber's payments to Mr. Mulroney when it settled the case," says a draft of a ministerial briefing note released under the Access to Information Act.
The note, prepared by an assistant deputy attorney general at Justice, includes "possible talking points" for Toews in the event he should be asked about reopening the settlement.
"My officials are reviewing the matter in light of "The Fifth Estate" report and will be providing me with advice in due course," the note says.
"You will appreciate that this is a matter that will require some degree of inquiry as it relates to a settlement negotiated just under 10 years ago. I will not speculate as to the possible result of that review."
Under the heading "Considerations," the draft briefing note says the federal deal with Mulroney is governed by Quebec law, which provides that a settlement contract may be set aside on the same grounds as any other contract.
One such ground involves a party to the contract committing fraud on the other so as to invalidate the deal, the briefing note says.
"To date, Justice has not been asked to consider whether an attempt should be made to set aside the settlement."
Concerning the newly broadcast details, the note says: "It is up to the RCMP to decide whether to reopen its investigation into the Airbus matter as a result of this information."
RCMP Sgt. Sylvie Tremblay said in an interview the force did not revisit the file.
The briefing material was never seen by Toews, "but it did make it to the deputy minister's level," said Girouard.
"When the senior management took into account all the circumstances, the briefing note was just never submitted for the minister's consideration."
A senior government official said there was no political input into the decision to drop the matter.
"Absolutely not, because there's a clear distinction between political and judicial (decisions) and there can be no interference."
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