Mulroney, Schreiber dealings 'inappropriate:' commission

31st May 2010, Comments 0 comments

Former Canadian prime minister Brian Mulroney's dealings with a German-Canadian arms dealer were "inappropriate," an inquiry into secret cash payments concluded Monday.

In a stinging report, commissioner Jeffrey Oliphant criticized Mulroney's handling of payments from arms dealer Karlheinz Schreiber, and his related testimony in a civil suit against the federal government.

"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 (in court) 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.

Furthermore, he said, Mulroney contravened his own ethics code for public office holders, put in place by his government in 1985, in these dealings.

Mulroney served as prime minister of Canada from 1984 to 1993.

"In my view," said Oliphant, "Canadians are entitled to expect that the holders of public office will be guided in their professional and personal lives by an ethical standard that is higher and more rigorous than the norm."

"Those expectations do not expire when the political career of a holder of public office comes to an end," he said.

Federal police first accused Mulroney in 1995 of accepting kickbacks from Schreiber for the purchase of 34 Airbus jets for carrier Air Canada in 1988.

The ex-prime minister subsequently sued the government for libel and, under oath, denied any illicit dealings with Schreiber. He received a government apology and a 2.1-million-dollar settlement and the case was closed.

Later, Schreiber revealed in an affidavit that he paid Mulroney hundreds of thousands of dollars in cash in legal-sized envelopes at three hotel meetings in the 1990s.

Schreiber said Mulroney had arranged the money deal at the prime minister's Harrington Lake summer residence two days before he left office in 1993, and later tried to cover it up.

Mulroney admitted to a House ethics committee in 2007 that he took 225,000 dollars in cash from Schreiber, but added it was a "mistake," not wrongdoing.

He maintained he was paid to lobby foreign politicians to buy Thyssen light armored vehicles that Schreiber was trying to have built in Canada.

Oliphant concluded that the funds actually came from Airbus, but added it was still unclear if Mulroney was aware of this fact.

He also dismissed Mulroney's "error in judgment" defense, saying: "the reason Mr. Schreiber made the payments in cash and Mr. Mulroney accepted them in cash was that they both wanted to conceal the fact that the transactions had occurred between them."

In a brief announcement, the Canadian government acknowledged the receipt of the report, which proposed expanding conflict of interest laws to make it an offense for former politicians to fail to meet disclosure rules.

Earlier this month, Schreiber was sentenced by a German court to eight years in prison on tax charges.

© 2010 AFP

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