Nov 10, 2007 04:30 AM
bruce campion-smith
tonda maccharles
tracey tyler
OTTAWA–After seeing his name appear in a court document, Prime Minister Stephen Harper has called for an independent review of the relationship between former prime minister Brian Mulroney and a German-Canadian businessman.
Karlheinz Schreiber is suing Mulroney for $300,000, money he says was paid in cash between August 1993 and December 1994 to the former prime minister.
Schreiber, who faces extradition to Germany as early as next week on tax evasion, fraud and bribery charges, alleges Mulroney failed to make good on promises to help with some business ventures.
None of the allegations has been proven in court.
In an affidavit filed in the Ontario Superior Court of Justice, Schreiber refers to a letter he sent Mulroney on July 20, 2006, at Mulroney's request. Schreiber claims Mulroney wanted the letter because he wanted to show it to Harper, to prove "he (Mulroney) and I were on good terms."
In a hastily called news conference, Harper yesterday said he was "surprised to learn that my own name was mentioned" in the court document, but stressed he is not calling for the review for that reason.
"We can't ignore the allegation," Harper said yesterday. "We always have to protect the office of the prime minister."
Harper suggested a review was necessary because of new allegations in the 12-page affidavit filed in court this week:
Schreiber's claim that Mulroney struck a business deal with him while still in office in the summer of 1993 that resulted in the $300,000 in cash payments later paid to the former prime minister.
Schreiber's claim that Mulroney's former aide, Fred Doucet, had asked Schreiber at some unspecified date to "transfer funds from GCI (a government lobbying firm) to Mr. Mulroney's lawyer in Geneva related to the Airbus deal."
Still, Harper had resisted calls from the opposition for an independent inquiry into the Mulroney/Schreiber relationship until yesterday, when he admitted that after the independent review by an impartial person, there could possibly be a public inquiry.
Harper said he might name a person to do the review as early as next week.
It appears Harper was particularly concerned by the fact Schreiber also publicly linked him personally to the affair.
In the July 20, 2006 letter Schreiber sent to Mulroney he said "over the past three months I have learned a lot about the monster that had dogged our footsteps since 1994. Without a doubt, this is the biggest political justice scandal in Canadian history." Schreiber said others are responsible for the scandal and he and Mulroney are the "innocent victims of this vendetta and you are still the prime target."
It was that letter than Schreiber alleges that Mulroney wanted to bring to the meeting with Harper at Harrington Lake in July, 2006.
Harper yesterday denied any July 2006 meeting ever occurred, but he said his family had welcomed Mulroney and his wife to Harrington Lake in August 2006.
"We did not talk about the relationship between Mr, Mulroney and Mr. Schreiber and Mr. Mulroney did not give me any letter," said Harper.
"This series of incidents, this affair has been the subject of all kinds of rumours and innuendo over the years. For that reason it's impossible, frankly, for the government to make an impartial judgment on how to proceed," Harper told reporters.
Harper said Schreiber's allegations, made under oath, for the first time directly touched on Mulroney's time in office as well as the validity of the $2.1 million settlement the government of Canada reached with Mulroney.
"I acknowledge the appointment of an independent and impartial third party to review the allegations. I will co-operate fully with the person appointed," Mulroney said in a written statement.
"Since the new allegation under oath does touch upon Mr. Mulroney's term in office, I think it gives rise to something we have to respond to," Harper said.
"I'm not sure how. I'm quite convinced that this government should not make that decision. That's why we've got to find somebody impartial to give us advice on how we should respond."
Harper said the review could lead to a full-fledged inquiry into the Airbus affair and even force Mulroney to repay the $2.1 million settlement he got from the federal government in an out-of-court libel settlement in 1997.
He cautioned it was "very, very premature" to prejudge the outcome but conceded he wants to know whether the new allegations "have any bearing on the settlement." Mulroney, prime minister from 1984 until 1993, successfully sued the federal government after the justice department named him in a letter alleging his involvement in a kickback scheme for Air Canada's purchase of Airbus jetliners in 1988.
A senior Harper official said later that former prime minister Jean Chrétien will be asked to make available his own government's cabinet discussions about the Airbus affair and the settlement, documents that are usually sealed for more than 20 years.
At his news conference yesterday, Harper urged Canadians to keep the allegations "in context."
"I don't have anything other than these allegations and the allegations do stem from, let's say, a nasty litigation between Mr. Mulroney and Mr. Schreiber."
Harper, who has used Mulroney as a mentor in the past, said he did not talk to the former prime minister in advance of his announcement yesterday.
Now, he has ordered his cabinet members to keep their distance as well.
"I think it will incumbent upon myself and members of the government not to have dealings with Mr. Mulroney until this issue is resolved," Harper said.
Liberal Leader Stéphane Dion suggested Harper's call for a review is little more than a delaying tactic.
"Now that Mr. Schreiber's affidavit has been made public – now that it names Prime Minister Harper himself as an alleged actor in some of the events in question – Mr. Harper seems desperate to look like he is taking action, while actually offering nothing but delay," Dion said yesterday.
The CBC and The Globe and Mail reported last week that Mulroney eventually paid income taxes on the $300,000 cash payments, but not in the years the money was received.
The second allegation is that Schreiber met with Mulroney, again at the former prime minister's request, around Feb. 2, 1998 at a hotel in Zurich, Switzerland.
This was more than a year after the Canadian government apologized to Mulroney for naming him in a letter to Swiss authorities seeking information in an Airbus corruption investigation.
Schreiber says Mulroney's former speechwriter, Paul Therrien, who also wrote speeches for Harper and is now chief of staff to one of Harper's cabinet ministers, escorted him up to Mulroney's room.
At the meeting, Schreiber claims he informed Mulroney about "the earlier request made by Mr. Fred Doucet to transfer funds from GCI to Mr. Mulroney's lawyer in Geneva related to the Airbus deal."
Schreiber does not specify when exactly Doucet made such a request – one that would have undoubtedly influenced the outcome of any negotiations with Mulroney in the Airbus settlement.
At the same meeting, Schreiber says he again explored with Mulroney what other business they could do, including Mulroney's support for a planned pasta business – services Schreiber says Mulroney never rendered.
Schreiber potentially faces removal from Canada as early as Thursday if his latest appeal at the Ontario Court of Appeal fails, but already, lawyer Edward Greenspan says his instructions are to seek leave to appeal to the Supreme Court of Canada if that occurs.
Greenspan would not comment on Harper's move.
"There's no question that Mr. Schreiber believes that politics are playing a very important part in the case. But as a lawyer I'm dealing with an extradition request from Germany for him to return to Germany to stand trial on a number of charges."
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