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article imageCanada Shaken by Massive Political Scandal Implicating Former PM Mulroney

By David Silverberg     Nov 14, 2007 in Politics
Canada’s hottest political scandal just got more intense: A public inquiry will probe into the controversial relationship between former PM Brian Mulroney and businessman Karlheinz Schreiber. Why is this scandal sending shockwaves through the country?
Digital Journal — The power of an affidavit should not be underestimated. In Canada, this legal document has started a thunderous call to action in a political scandal that is returning to haunt many of its key players. Last week, an affidavit filed by German businessman Karlheinz Schreiber implicated former Prime Minister Brian Mulroney in nefarious business dealings while Mulroney was PM.
Schreiber, 73, claims Mulroney never followed through on promises to complete services for which Schreiber paid the politician $300,000 in 1993 and 1994. One service, Schreiber wrote in court documents, was to "support my efforts in obtaining approval of the establishment of a production facility for light armoured vehicles.” Schreiber wants that money back because Mulroney supposedly never completed those services after he left office.
But it’s not like Schreiber himself is an upstanding citizen. He is facing charges of fraud, bribery and tax evasion in Germany in relation to commissions he earned for negotiating the sale of helicopters, aircraft and armaments. He is currently in a cell at the Toronto West Detention Centre and his extradition hearing is scheduled for tomorrow. But the Conservative government is rumoured to be seeking to reverse his extradition and force the star witness to testify at the inquiry.
Canadian Prime Minister Stephen Harper (right) recently announced a public inquiry into the relationship former Prime Minister Brian Mulroney had with businessman Karlheinz Schreiber. - Photo courtesy Office of the Prime Minister
In light of the new allegation made against Mulroney by Schreiber, and under mounting pressure from the opposition and political pundits, Prime Minister Stephen Harper ordered a public inquiry into the relationship between the two men. A third-party investigation team will be ordered to conduct the inquiry, and today Harper announced that David Johnston, president of the University of Waterloo, will advise the investigation team.
As the National Post explains:
In a statement released after Question Period yesterday, Mr. Harper said the independent advisor will also review the material filed by Mr. Schreiber and if any ‘evidence of criminal action’ is identified, advice will be given on how to handle it. The advisor also has the task of assessing the impact such a circumstance could have on the broader public inquiry.Also, the Royal Canadian Mounted Police (RCMP) will launch its own investigation into Schreiber’s affidavit, while also seeking to corroborate Mulroney’s claim that the money in question involved private business dealings after he left office. Mulroney is confident of his innocence, telling a Toronto audience yesterday he will testify before the inquiry because “I have done nothing wrong and I have nothing to hide."
Mulroney will endure a case of déjà vu when the inquiry begins. In 1995, the RCMP began an investigation into allegations that Mulroney accepted kickbacks from Schreiber on sales of Airbus planes to Air Canada. Those allegations were contained in a letter that was sent to Swiss authorities and mysteriously made public. Mulroney denied the allegations, and then launched a $50 million lawsuit against the Canadian government. Two years later, he settled out of court for $2.1 million, accepting an apology from the Liberal government, but also putting taxpayers on the hook for that $2.1 million.
A still shot of businessman Karlheinz Schreiber from a Fifth Estate documentary that aired on CBC. Schreiber is facing charges of fraud, bribery and tax evasion in Germany. To see the full Fifth Estate documentary on Schreiber, click here
The fresh allegations have prompted a loud outcry for opposition parties. NDP MP Pat Martin said:
…it was the culture of secrecy that allowed corruption to flourish under the Liberal regime. Now the stink of corruption is hanging over the Conservative government, with allegations of a former prime minister accepting brown paper bags full of money in secret hotel-room meetings.
Also, regarding the 1997 settlement, Liberal leader Stephane Dion has said the government would likely not have settled with Mulroney if they had known about the $300,000 in "secret" payments. Dion is trying to rally his troops to voice their frustration, which should bode well for the Liberal Party’s momentum in the coming months. As the Toronto Star explains:
Dion needs … to prove he's the paragon of political integrity he claims as much as Harper needs to reassure many Canadians about his friends, authoritarian methods and Conservative purpose.Even a former PC minister is taking pot shots at Mulroney. Sinclair Stevens, who served as Industry minister under Mulroney before resigning, says the former prime minister should admit why he took $300,000 from Schreiber after leaving office. Although Stevens is certain Mulroney didn’t do anything unethical, he believes a full explanation would clear the air and provide the public with answers they sorely need.
Former Canadian Prime Minister, Brian Mulroney, has been vigorously promoting his 1,121-page, recently published Memoirs. - Photo by Joshua Sherurcij
So if Mulroney and Schreiber are the stars of this bizarre scandal, then Harper and former PM Jean Chretien are supporting players. Harper got himself involved by talking about meeting Mulroney before he left office regarding the Schreiber matter. An excerpt from Schreiber’s affidavit mentions Harper explicitly, saying:
I wrote the July 20, 2006 letter at the request of Mr. Mulroney because he told me that he was going to meet with The Right Honourable Stephen Harper, the current Prime Minister of Canada, by the end of July, 2006 at Harrington Lake, and that he (Mr. Mulroney) was going to show that he and I were on good terms.The Prime Minister’s office claims Harper never saw the letter from Schreiber and quickly dismissed the allegation as a cover-up.
Former Canadian Prime Minister Brian Mulroney speaks with Former British Prime Minister Margaret Tha...
Former Canadian Prime Minister Brian Mulroney speaks with Former British Prime Minister Margaret Thatcher. Mulroney has always been a socialite, often rubbing shoulders with the political elite. - Photo courtesy White House
Chretien might be out of the spotlight, but he’s making a cameo appearance on the mind of at least one Cabinet minister. The former PM should explain why the feds paid Mulroney $2.1 million in an out-of-court settlement, Lawrence Cannon said. Attempting to distance Harper from the controversy, Cannon explained:
At the end of the day, it was under Mr. Chretien's period of office that people found that Mr. Mulroney was completely exonerated. So, if Mr. Chretien or his successor have any problem with that, maybe they should start by explaining why at that time they paid Mr. Mulroney a compensation for being unjustly accused.No matter what the fallout is from the public inquiry or RCMP investigation, Mulroney’s past will likely haunt Harper’s future. In fact, Canada’s present political tensions may be under more stress as another lengthy inquiry looms near.
In the biggest scandal in Canada since the Liberal sponsorship controversy, Canadians are learning how politics can be a messy swamp. A kickback scheme is not simply a kickback scheme, and a simple letter to a prime minister can carry more weight than the paper it’s written on.
Already, politicos are saying the outcome of the inquiry isn’t as important as the accusations. Liberal MP Ralph Goodale said the prime minister’s office has been publicly smeared, even if only by association:
Those are issues that are profoundly troubling, and they go to the institution of the office of prime minister. And that really should be an office that is beyond question and above reproach.
More about Mulroney, Schreiber, Scandal, Prime minsiter, Harper
 
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