Forensic report raises questions at Mulroney-Schreiber inquiry

OTTAWA - A forensic accounting report has raised tantalizing questions - but produced no conclusive answers - about the financial links between businessman Karlheinz Schreiber and former Conservative prime minister Brian Mulroney.

OTTAWA - A forensic accounting report has raised tantalizing questions - but produced no conclusive answers - about the financial links between businessman Karlheinz Schreiber and former Conservative prime minister Brian Mulroney.

The report, tabled at a public inquiry Wednesday, indicates that money Schreiber earned as a middle-man in the controversial 1988 sale of Airbus jets to Air Canada probably flowed later into a Swiss bank account code-named Britan.

Schreiber says he then drew on the Britan account to pay Mulroney $300,000 to lobby in 1993-94 for another project to build German-designed armoured military vehicles in Canada.

Steven Whitla, a forensic accountant with Navigant Consulting, testified Wednesday that, although there are some gaps in the paper trail, there's a "reasonable inference" that most of the money held in the Britan account originated from commissions paid to Schreiber in the Airbus deal.

Whitla was unable, however, to close the final link in a financial chain leading toward Mulroney.

That's because the payments Schreiber made to the former prime minister were delivered in cash - meaning there's no documentary proof of the source of the funds.

Without that, Whitla said, "we have no way of linking the Britan fund withdrawals to Mr. Mulroney."

Richard Wolson, chief counsel to the inquiry, cautioned that even if it's assumed the payments to Mulroney came from the Britan account, that doesn't mean the former prime minister knew the money had originated from the Airbus deal.

"There is no evidence, nor do we assert, nor will we assert, that Mr. Mulroney knew of the source of the funds," said Wolson.

The gap in the forensic trail means Justice Jeffrey Oliphant will have to rely on other evidence gathered during the inquiry in reaching any conclusions on the subject.

The main focus of the inquiry is the so-called Bear Head project, which would have seen the German firm Thyssen AG set up a plant in Canada to build and export armoured vehicles.

But issues about Airbus have periodically surfaced at the proceedings, despite the fact that the aircraft sales are not a formal part of Oliphant's mandate.

Mulroney sued for libel, and won a $2.1-million settlement from the Liberal government of Jean Chretien, after the RCMP accused him in 1995 of conspiring with Schreiber and former Newfoundland premier Frank Moores in an alleged kickback ring arising from the Airbus sales.

No criminal charges were ever laid against any of the men named by the Mounties. The Swiss government has refused to make bank records related to that investigation available to the inquiry.

Wolson told Oliphant the bottom line is that there's no evidence the money Mulroney accepted from Schreiber was for anything other than the Bear Head project.

Schreiber contends he struck a lobbying deal with Mulroney just before he stepped down as prime minister in June 1993, although the money didn't change hands until later.

He says he delivered three cash payments of $100,000 each in a series of meetings in hotel rooms between August 1993 to December 1994.

Mulroney, who is due to testify at the inquiry next week, has acknowledged he took money from Schreiber but puts the total at $225,000 and says he broke no laws or ethical guidelines.

He says his lobbying was confined to foreign political leaders in search of potential export markets for the Thyssen vehicles. Mulroney insists he never approached Canadian officials, something that could have put him in breach of the federal ethics code.

 
 
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