Mulroney and Schreiber Fight to the Finish

This thing has been raging for 20 years now. It reads like a Hollywood thriller script – two men meeting secretly in hotel rooms in New York and Montreal and payments of hundreds of thousands of dollars in cash to help sell Canadian-built armoured vehicles to such wonderful, friendly allies as Russia and Communist China.

No invoices, no contracts, no receipts. Nothing more than a handshake between a former prime minister and a man who made his living promoting arms deals and slipping money to politicians.

The inquiry that a generation spent waiting for, finally got underway this past week under the magnificent glass and steel dome of Victoria Hall, the former Ottawa City Hall – the house that Moshe Safdie built.

It is presided by Manitoba Judge Jeffrey Oliphant and features some of the finest legal talent in the country. The inquiry is costing us tens of thousands of dollars a day to help the judge sort out the reputation of Martin Brian Mulroney, 18th prime minister of Canada.

It is being held in the same grand hall where Judge John Gomery launched his famous commission of inquiry into the sponsorship scandal that nearly destroyed the Liberal Party of Canada.

Mulroney wanted the judicial inquiry to clear his name. “I will be there with bells on,” Mulroney promised.

Prime Minister Stephen Harper could hardly refuse Mulroney his inquiry. After all Mulroney had been leader of Harper’s transition team when he came to power.

But then a parliamentary ethics committee did its own job on Mulroney, and all of a sudden the idea of a judicial commission of inquiry was not so attractive. But it was too late to back off. Mulroney pleaded with the judge for a delay, but it was too late. The show would go on.

Some facts are agreed upon already.

Mulroney admits he was paid the money, although they quibble over the amount. Mulroney says it was $225,000; Schreiber says $300,000.

It was payment to lobby for Canadian-made, German light armoured vehicles to be built in Quebec or Cape Breton by a Canadian subsidiary of Thyssen Industries whose representative in Canada was Mulroney’s old-friend Schreiber.

Mulroney said he lobbied abroad; Schreiber says Mulroney was hired to lobby in Canada. Mulroney was not legally registered as a Canadian lobbyist at the time.

The inquiry began with a surprise witness -- Marc Lalonde, former cabinet minister and confidante to Pierre Trudeau. He worked for Schreiber between September 1993 and October 1995 after the Jean Chrétien Liberal government came to power.

Lalonde testified that he worked for $325 an hour – took in about $55,000 over two years, and was always paid by cheque or bank draft, based on invoices, with full documentation, and everything was above board.

Lalonde testified that he never heard anything about Mulroney lobbying at the same time for Schreiber. Either in Canada or abroad.

A year ago, testifying before the Commons Ethics Committee Mulroney had said that he tried to sell the armoured vehicles to Russia and China. ”Inconceivable” replied Lalonde when asked if this was possible since it is against Canadian law to sell military weapons to Russia or Communist China.

But then Lalonde was asked what would it have taken to make the Thyssen deal fly.

Lalonde replied that first the vehicles would have to be competitive with the other bids, including the eventual winner, GM of London, Ont.

Second, the Canadian military would have to take at least 200 vehicles.

Third, there would have to be a real chance at foreign sales. Canadian sales alone were not enough to make the project viable.

What? Did Lalonde really say that foreign sales were needed?

Yes, he did. That was exactly what Brian Mulroney had told the Parliamentary Ethics Committee he was doing for Schreiber.

Lalonde’s unexpected testimony about foreign sales did not escape the attention of Mulroney’s lawyer Guy Pratte, who extracted from Lalonde that he would not necessarily be told about any foreign lobbying. There were a lot of things that Schreiber didn’t tell his business associates.

Suddenly the sky over Mulroney was not so clouded.

It will be up to Mulroney, when he testifies, to establish exactly how much foreign lobbying he did for Schreiber, why it didn’t pay off in sales, and could he please show his receipts, his letters of introduction and a few other documents that would establish without a doubt that he did the work he claims to have done.

This inquiry is a long way from being over.