So, after all this time — four years since it became public knowledge that he took cash payments from Karlheinz Schreiber, fourteen years after the actual event — Brian Mulroney finally comes forward to explain… and explains nothing. Or rather, digs himself deeper. Those who might have been inclined to give him the benefit of the doubt until now will have a harder time of it after the preposterous story he told the ethics committee today.
Let’s get a few things straight off the top. There are three sets of events about which we need answers. The first has to do with the circumstances surrounding the payments in cash Mulroney admits to having taken from Schreiber after he was prime minister, that is from 1993 on: what he did for the money, why he took it in cash, why there are no records of it anywhere, why he went to such elaborate lengths to conceal it, and so on.
The second has to do with a number of contracts for government business for which Schreiber was paid millions of dollars in secret commissions by his German clients in the 1980s — not only Airbus, but Thyssen and MBB: how those contracts were won, and what Schreiber did with the money, and whether the first had anything to do with the second. In particular, there is the question of Schreiber’s relationship, financial or otherwise, with several members of that group of Tories centred around Mulroney, going back to the days of the 1983 convention.
Each of those is significant, and troubling, in itself. They remain so, quite apart from whether anyone can connect the two — that is, whether the payments that we know Mulroney received from Schreiber after he was prime minister were in consequence of anything he did for him while he was prime minister. This third scenario is the one that gets everyone excited. It is, to be sure, the most significant question, in the sense that if it were true, it would be the most serious possible outcome.
But it is also the one for which there is the least evidence. None, in fact. Moreover, both men have consistently denied there was any such exchange (though, it should be said, this is hardly surprising: if there were such a link, they would hardly, either of them, be anxious to admit it). But in fact no evidence has been produced to suggest Mulroney personally took bribes from Schreiber, either before or after he left office. It has not even been alleged, except in the infamous 1995 letter of request to the Swiss authorities.
But we do not have to leap all the way to prime ministers taking kickbacks to want the first two sets of events explained. And this Mulroney signally failed to do. He did not give convincing explanations for events of which he was a part in the 1980s. And he most certainly did not give a convincing account of his dealings with Schreiber after he was prime minister.
Instead, he spent most of his time attacking Schreiber’s credibility. This would be significant, and useful, if the business truly pitted one man’s word against the other’s. But in fact that is not the case.
Schreiber’s credibility would be the central issue in this case if we did not know that Mulroney took hundreds of thousands of dollars in cash from him. But we do. His credibility would be the issue if we did not have his bank records, or the agreements he signed with Airbus, Thyssen and MBB — but we do. We can trust our own eyes. We don’t need to trust him. We know from these records that Schreiber was paid millions, and we know where at least some of it went: to Frank Moores and his partners in Government Consultants International, and to Brian Mulroney.
To be told that Schreiber is a liar and a perjurer does nothing to explain why Mulroney took cash from Schreiber after he left office, or any of the rest of the story. It is, for the most part, beside the point. To be sure, it would be interesting to know whether they agreed to do business together before or after Mulroney stepped down as prime minister. But the relationship between them is troubling either way. It’s troubling even if you accept Mulroney’s version on every issue on which they disagree. All Mulroney needed to do was explain his side of it. And this is the story he told us:
He said he was hired in August of 1993 to promote the famous Bear Head project to build light-armoured vehicles in Cape Breton — not in Canada, as Schreiber alleges (which would not only have been in contravention of the lobbyist regulations, inasmuch as he was not registered to lobby, but would also have have run afoul of the code of conduct for public office holders) but overseas: that is, to sell the vehicles abroad. There was no factory to build them, you understand, depending as the project was on government financing that had not proved forthcoming. But never mind. What could be more innocent: selling Canadian-made vehicles — peacekeeping vehicles, no less — to other countries?
Why, then, have we not heard this story until now? Mulroney has had seven years to tell his side of the story, ever since his dealings with Schreiber were first unearthed by the reporter Phil Matthias, and since Matthias told what he knew to Bill Kaplan, the lawyer and historian who eventually broke the story. Kaplan spent more than two years nailing it down. In that time, he talked to Mulroney probably dozens of times. The former prime minister tried every possible tack to persuade him not to publish the story, sounding at times a pleading note, at other times a threatening one. In all that time, he never once disclosed this wonderfully exculpatory version of events. Nor has he or any of his spokesmen breathed a word of it since. Why? Maybe he was embarrassed about the cash? That would explain why he didn’t tell anyone before these became known. But after? What’s to lose?
I think we should hear more. Who did he talk to on these foreign journeys? According to Mulroney, he talked to Boris Yeltsin, and to Francois Mitterrand. Does he have any other names — someone living, perhaps? He says he talked to government officials in China and the United States? Are there any records of these meetings?
Then there’s the little matter of the cash. According to Mulroney, it was Schreiber who insisted that he be paid in cash, in payments totalling, he says, $225,000, not the $300,000 Schreiber has maintained. Schreiber’s explanation for this extraordinary request, he says, was simple that he was an international businessman, and this was how he did business. O-kay. That does not explain why Mulroney — former prime minister of Canada, former president of the Iron Ore Co. of Canada, experienced lawyer — accepted the request. All that we heard, over and over, was: I made a mistake. It was an error. I’m sorry.
This at least has the virtue of being something we have heard before. A month ago, Mulroney’s faithful former spokesman, Luc Lavoie, road-tested the international businessman-colossal mistake explanation. But Luc added another element: Mulroney needed money. Desperately. This was a rare point of agreement between Mulroney and Schreiber, who said the same thing in his testimony. Indeed, Mulroney once confided in Kaplan to much the same effect. “I can tell you,” he said in a June 4, 1998 interview, “when I first started out, I needed … money quite badly.”
But this was a hard sell — not only did he have most of his expenses paid as prime minister, on top of his six-figure salary, on top of his pension, but the party also kicked in $4000 a month to boot — and in any event, if he was so broke on leaving office, it was hardly likely to be more than a temporary affliction. He was a former prime minister, with business connections the world over; soon, he would be joining oin the blue-chip Montreal law firm of Ogilvy Renault. Why could he not have hit up a friend, Peter Munk for example, to tide him over until the directorships and legal fees started to flow? Or a bank? Or Ogilvy Renault? Why go to Schreiber? And why in such circumstances. Perhaps that is why Luc is no longer his spokesman.
So: ixnay on the overtypay. Stick with “colossal mistake”. Is this credible? Suppose it is. Stretch your mind around the notion of a man of Mulroney’s stature meekly acceding to Schreiber’s request. Maybe he was startled, temporarily flummoxed at the sight of all that cash, reluctant to give offense. It happens. But three times? Over sixteen months? By that time, you’ve presumably recovered your composure, not to say your common sense. And still you take the cash? Nobody does business this way. Nobody in business does, that is.
Even then, suppose that’s true. That still doesn’t explain why Mulroney himself kept no records of the transaction, or any subsequent disposition of the cash. Maybe Schreiber didn’t want to leave a paper trail. Why did that prevent Mulroney from leaving one? Yet not only is there no invoice, no contract, no receipt, nothing to link the two men in any way, but there is no record of what Mulroney did with the money at any point thereafter. No bank statements: he didn’t deposit the money in any bank account, he says, but rather in a safe, at his home in Montreal, and in a safety deposit box in New York. And no expense records: he can offer no receipts or records to account for how the money was spent, though he says it was used strictly for business expenses incurred in the course of representing Schreiber’s interests abroad, and though he says he paid for these with a credit card (paying off the credit card bill in turn with wads of cash). And this brings us to the tale of the taxes.
Mulroney did not pay tax on the $225,000 he says he received in 1993 and 1994 until 1999, when he made what’s called a “voluntary disclosure.” He filed tax returns for those years, but did not mention the payments he received from Schreiber. He says he only finally decided to pay taxes on the money because Schreiber’s 1999 arrest on charges of fraud, bribery and tax evasion in his native Germany convinced him that Schreiber was not the respectable businessman he had imagined him to be. Why that should have been the determining factor the committee did not explore.
But Mulroney says he was not obliged to pay tax on the income he received from Schreiber, because it was not really income, as such, but merely a kind of expense account for him to draw down as need be. O-kay. Did he keep any records of his expenses? Oh yes. Where are they, then? Did he submit them to the tax department, when he finally did file? No: He paid taxes on the whole amount, claimed no deduction for the $40,000 in expenses he says he incurred. Again, this had something to do with Schreiber’s arrest, though again the link is unclear. But what is clear is that this relieved him of the need to file any supporting receipts. But then what about those records he says he kept? Oh, he destroyed them once the tax matter was cleared up. Of course.
Does he take us for fools? No cheques, no invoices, no receipts, no contracts, no bank statements, no withdrawal slips, no credit card bills, no expense records, nothing: not a single scrap of paper exists, it appears, anywhere in the world to support Mulroney’s version. Well, there might be: his tax records. In order to make a voluntary disclosure, you have to make a full explanation of everything to do with the income: how you earned it, what you did with it, etc. Is there a letter to the tax department somewhere offering such explanation? Apparently not. What about his income tax returns, then? Can we at least see them? Uh-uh, he said: those are private. I say again: Does he take us for fools?
All of these questions, all of these doubts, as I said before, are raised not by anything Schreiber said, but by Mulroney’s own testimony. But then, nothing Mulroney said today made much sense. He is still insisting that he barely knew Schreiber — against a mountain of letter, visits, photos, and telegrams going back to the early 1980s — and that, so far as he knew him, he was merely a hard-driving business man, the head of Thyssen’s Canadian subsidiary, a man of accomplishment, employer of 3,000 souls. It was only with his arrest in 1999, apparently, that the scales fell from his eyes — though by that time Schreiber had been a fugitive from German justice for four years.
If so, Mulroney was perhaps the last person in Canada to harbour such illlusions. John Crosbie, Peter MacKay, Rhys Eyton, Paul Tellier, Robert Fowler and Peter Lougheed are among the major political, bureaucratic and business figures who have said they had misgivings about him, or indeed refused to have anything to do with him. Public inquiry? Schreiber has already been the subject of one — 26 years ago, in 1981, over a notorious purchase of land outside Edmonton, Alberta, one that had uncannily anticipated a provincial land-use decision, which may or may have had something to do with the several former provincial cabinet ministers Schreiber had taken into his employ. Of all this Mulroney was blissfully unaware.
Likewise, he continues to maintain that his statements under oath prior to his 1996 libel trial — to the effect that he had never had any dealings with Schreiber — were the literal truth, if you interpret “never had any dealings” to mean “never had any dealings involving the exchange of Airbus contracts for cash.” No one but he can know for sure what was in his mind at the time, but I defy anyone reading the statement in its original context to discover that interpretation. Understand: the letter of request was seeking access to the Britan account — the very account from which Mulroney was, in fact, paid (notwithstanding his bizarre attempt to deny this in front of the committee).
Even more dubious is Mulroney’s imputation of the same selective interpretation to Schreiber’s Edmonton lawyer, Bobby Hladun. Asked about the call he is alleged to have made to Hladun in 1999, asking Schreiber to sign a document asserting he had never paid Mulroney any money for any purpose — a call Hladun described in a letter to Schreiber’s other lawyer, Eddie Greenspan — Mulroney insisted that Hladun, too, had meant by this, or had understood Mulroney to mean, that Schreiber had never paid him any money in connection with the Airbus contract.
But if that were true, why would Schreiber refuse to sign? Why would Greenspan, as Schreiber has testified, forbid him to sign (it would be interesting to hear Greenspan on this — no solicitor-client privilege can exist on a matter that the client has already disclosed). Mulroney was, by his own account, asking him to do nothing more than tell the truth — a truth that he, Schreiber, had already confirmed publicly any number of times. So why wouldn’t he?
On and on it goes. At times, Mulroney seemed genuinely confused as to the facts, claiming that Government Consultants International, the notorious lobby firm at the centre of this whole affair, did not yet exist when he appointed Frank Moores, its chairman, to the board of Air Canada (in fact, it had been incorporated two months before) — this, though Moores was lobbying for Airbus at the time. Mulroney even claimed that Schreiber had disavowed any involvement in financing the airlift of 450 delegates from Quebec to Winnipeg to vote against Joe Clark at the 1983 Conservative leadership review, when Schreiber has in fact affirmed his invovement on numerous occasions, most recently in his appearance before the committee on Tuesday.
Mulroney had no convincing explanation for either event. Nor could he explain why, after Schreiber sent him a letter in May of this year accusing him of all sorts of misdeeds and threatening to expose him if he did not help him on his extradition case — the “blackmail letter,” Mulroney called it — he did not immediately turn it over to the police. Or why Elmer MacKay would have drafted Schreiber’s letter to him of the previous year. His testimony is, quite literally, incredible.
And on those rare occasions when he was pinned down, when the illogic of his position was pursued to its logical conclusion, when all the spin and bafflegab had been worn away, leaving only the stark inexpicabilty of Mulroney’s behaviour, he fell back on his handy, all-purpose, non-explanation: it was an error of judgement. I made a mistake.
But that’s not an explanation. It’s at best a description. It tells us nothing about his motives, reasoning, or objectives. It merely categorizes the result. It tells us neither why nor how he did it, but merely that he did it, and if he admits he was wrong to do so now, he gives us no indication why he did not see it that way then, or what has happened since to change his mind — still less why he went to such great lengths to conceal his initial error.
In any case, that’s not an error. It’s a pattern.