OTTAWA – A decade ago, Brian Mulroney was questioned under oath about his dealings with Karlheinz Schreiber and never mentioned taking $225,000 in cash from him.
But he still insists that he was honest and forthcoming in his answers and that he was never asked the right questions.
The questioning was part of his libel suit against the federal government and the Mounties over allegations of corruption in connection with the Airbus deal.
Mulroney said at one point he had had no dealings with Schreiber and never mentioned taking money from him.
But in testimony on Wednesday, Mulroney said he meant he never had business dealings with Schreiber over Airbus.
As for the $225,000, the nine government lawyers missed their chance, he said.
“Not one of them ever asked at any time the key question,” he said.
And, he added, the deposition was limited to his libel complaint about Airbus, not his dealings with Schreiber years later.
“This was not related in any way to the allegations of my lawsuit.”
He came close to tears on the witness stand as he described how accusations of his involvement in Airbus kickbacks threatened his reputation and shook his family.
But one of his aides said Mulroney cracked because two journalists in the audience were laughing as he spoke.
“They were carrying on like a pair of school children,” Mulroney said on his website. “It just got to me.”
Mulroney was recounting the impact of a 1995 letter from the RCMP to Swiss authorities which alleged he was involved for years in a separate kickback conspiracy.
He eventually won a $2.1-million settlement of his suit and none of the corruption allegations were ever substantiated.
But Mulroney said the original letter and the government’s refusal to withdraw it, left him and his family shaken.
“I am an honest man and my family is honest . . . all of a sudden, out of the blue, I’m a criminal.”
He said his lawyers tried to get the then-Liberal government to withdraw the letter and obtain Mulroney’s side of the story.
“In all cases, we were turned down and they really told us to get lost and they were going ahead with this travesty.”
He called the accusations “a criminal hoax,” something “right out of Kafka.”
When he was asked to describe the effect on his wife and children, his face melted, his lips shrank to a thin line and tears welled in his eyes.
“Nicholas was only 10 years old, he would. . . .” The reply trailed off into a whispered “Merci.”
Justice Jeffrey Oliphant told Mulroney he felt he understood how the family was hurt and didn’t require elaboration. He then called an early lunch to allow Mulroney to regain his composure.
Earlier, Mulroney testified that just months after he took money from Schreiber to promote sales of an armoured vehicle for UN use, he raised the issue with senior officials in both China and Russia.
He said he discussed the concept in general terms during a business trip to China in October 1993 and later talked it over with Boris Yeltsin in Russia.
In August of that year, he got a $75,000 cash payment from Schreiber for what he says was an international “watching brief” to find business opportunities for Schreiber’s companies.
Schreiber was pushing the idea of building a plant in Canada to produce German-designed armoured vehicles.
Schreiber has testified he wanted Mulroney to lobby Canadian politicians on the issue, but the former prime minister says he was hired to promote the vehicles internationally. And he did so, he testified.
After the China trip, Mulroney and Schreiber met at a coffee shop in the Queen Elizabeth Hotel in Montreal, where Schreiber plopped down another envelope holding 75 thousand-dollar bills as a second payment on his “retainer.”
This came even though “he didn’t appear to me to be very interested” in the Beijing discussions.
“I was surprised,” Mulroney said. “I thought he’d be much more enthusiastic.”
He said Schreiber, in the aftermath of the 1993 election which brought the Liberals to power and reduced the Tories to two seats, had switched his political allegiance.
“He had fallen in love with the Liberals. His infatuation with Andre Ouellet was unbounded.”
At the time, Schreiber was promoting east Montreal as the site of his proposed plant.
Mulroney later accepted a third cash payment at the Pierre Hotel in New York in December 1994.
“He said, or words to this effect: ‘This is the third payment on your retainer; thank you very much for your good work.”‘
Mulroney said he plunked the first two payments in a safe at home. He put the third payment in a safe-deposit box at a New York bank.
The former prime minister, in his second day of testimony at a public inquiry into his dealings with Schreiber, said he came up with the idea of promoting the vehicles as a standard piece of gear for UN peacekeeping missions.
To that end, he sounded out Zhu Ronji, then the Chinese vice-premier, and Yeltsin, the Russian president.
The discussions in China were very general.
“I was there simply to begin the process of sounding out the terrain for a more comprehensive approach later.”
His talks with Yeltsin were also general.
He asked the Russian if he thought the concept of a standard UN vehicle was a worthy idea.
“He said yes.”
Mulroney has said he took $225,000 in cash from Schreiber, which he kept secret for years. He has said he wanted to keep the relationship quiet because he feared a renewal of accusations levelled against him during the Airbus affair.
He said he regrets not asking Schreiber for a cheque.