Airbus and the Ghost of Brian Mulroney

A blast from the past. A German-Canadian huckster. A former Progressive Conservative cabinet minister. A dodgy prime minister. A European aircraft giant with a reputation for handing out easy money.  Karl Heinz Schreiber, Elmer MacKay, Brian Mulroney and Airbus.

Schreiber went into a German jail cell. Elmer, late father of Peter, took his secrets to the grave. Brian went to a coffee shop to collect envelopes stuffed with cash. And Airbus - well it's still at it.

Airbus, Europe’s largest aerospace multinational, is to pay a record £3bn in penalties after admitting it had paid huge bribes on an “endemic” basis to land contracts in 20 countries. 

Anti-corruption investigators hailed the result as the largest ever corporate fine for bribery in the world after judges declared that the corruption was “grave, pervasive and pernicious”. 

The planemaker agreed to pay the penalties on Friday after reaching settlements with investigators in the UK, France and the US to end inquiries that started four years ago.

Like that horrible TV show where they're constantly trying to recover pirate treasure from Nova Scotia's Oak Island, the 'commission' Airbus admits it paid to cinch the Air Canada deal but never divulged to whom remains a deeply buried secret.

Mulroney Ancient History? Hardly

You have to be pretty green sapwood to consider something very much ongoing 'ancient history' even if its origins do go back about 20-years. That's especially true when the revelations about the matter keep emerging, stripping away one layer of obfuscation after another.

Brian Mulroney desperately wants you to dismiss the Mulroney/Schreiber/Moores/Airbus business as ancient history. Nothing would make Stephen Harper and his caucus happier either. Harper dodged demands for an inquiry into Mulroney/Schreiber before he was forced to relent, causing his to sever his newfound friendship with his latter-day mentor. The Tories laughably claimed Mulroney was exonerated during last year's Commons ethics committee hearings.

Mulroney has seemed to slip off the hook several times over the years. He thought it was all dead and buried after the Liberal government settled his lawsuit. The former prime minister had, after all, given sworn testimony that his only dealings with Schreiber after he left office were just a few get togethers over cups of coffee. No money ever changed hands. And that seemed to be an end to it. Mulroney was exonerated, the Liberal government said so. It even paid him a tidy two million dollars, the cheque pinned to its letter of apology.

In the course of his victory, Mulroney made an enormous mistake. He disparaged his former friend, Karlheinz Schreiber. It appears that was entirely gratuitous, the sort of hubris that brings down so many highly placed people. It was easy to take a swipe at Schreiber. The German government was pursuing extradition proceedings against the man for bribery charges. Who are you going to believe, a guy who's on the run from the law in Germany or a former prime minister of impeccable character?

It's entirely likely Schreiber would have remained mute had he not been slammed by Mulroney. This mistake, however, revealed how Schreiber could retaliate. Armed with a trove of documents, Schreiber has played his hand brilliantly. He's released documents frugally and with calculated timing. In the process he's achieved two things. He's drawn in his fair weather friends and he's kept the process alive and moving in the direction of his choosing.

And oh how they've lied and lied and lied, the entire lot of them, each in his turn. Mulroney swore he'd had no business dealings with Schreiber. Then he scurries off to file a 'voluntary disclosure' with Revenue Canada when Schreiber hands The Fifth Estate his Swiss banking records. Those documents also seem to implicate Mulroney friend, former Newfoundland premier and Ottawa lobbyist Frank Moores who for some strange reason sees fit to make his own 'voluntary disclosure' to Revenue Canada.

The Fifth Estate and the Globe & Mail keep the story alive and churning to the annoyance and embarrassment of Stephen Harper who had embraced Mulroney as a mentor, a prime ministerial Big Brother. Harper's minority government was suddenly on the hook. It couldn't prevent the Commons ethics committee from holding hearings into the matter (atrociously amateurish in any case). Nor was he able to long resist demands for an official inquiry into Schreiber/Mulroney.

Two important things happened during the ethics committee hearings. Mulroney school chum, confidante and aide to the former prime minister, Fred Doucet, told the committee, unequivocally and under oath, that he'd never had anything to do with Airbus. The most important thing, however, was largely overlooked. It was Schreiber telling the committee that focusing on his dealings with Mulroney was missing the point, looking in the wrong direction. That statement confirmed my suspicions that the Airbus story wasn't about Mulroney and Schreiber. It was about Mulroney and Moores.

In the months following the ethics committee hearings, Schreiber has fed a trickle of documents to reporters that may be highly probative. First came documents from Mulroney's PMO aide Fred Doucet making enquiries about the very thing Doucet had sworn he'd had nothing to do with - Airbus.

Tonight, according to the latest Globe & Mail, The Fifth Estate, will air further revelations from a former Airbus official and a former employee of Frank Moores' lobbying firm, GCI.

In the years since Mr. Moores's 2005 death, documents have emerged, and a number of sources have come forward, that contradict his assertion that neither he nor his lobbying firm, Government Consultants International, was involved in the Airbus sale.

Interviews and notes written by Mr. Moores, as well as memos written by his former staffers, show the firm was intimately involved with the Airbus deal: making overseas trips to promote the European manufacturer to Canadian diplomats, strategizing on how to approach federal officials, as well as approaching officials in Air Canada, a Crown corporation at the time.

...In interviews with CBC's The Fifth Estate, which is airing a documentary tonight about the Airbus sale, two former salesmen for Airbus in the United States have said that Mr. Moores was lobbying on behalf of the European manufacturer.

Anthony Lawler, who was based out of Airbus's Virginia office, told the program he was in a meeting with an Air Canada official when he realized the manufacturer had an additional, unannounced campaign going on behind the scenes.

Mr. Lawler told the program that, in the middle of the meeting, which took place in the mid-1980s, the Air Canada official was beckoned out of his office by his secretary because of a telephone call.

“He came back and said ‘Oh, that was Frank Moores and he wanted to know which aircraft we were looking at,'” Mr. Lawler said. “It didn't mean anything to me at the time ... only after I learned he was in Ottawa and was a lobbyist.”

A former GCI lobbyist, who spoke to The Globe and Mail on condition that he not be identified, has said that staffers at Mr. Moores's firm were told to cloak their work for Airbus in secrecy, and were warned: “If anybody asks, we're not working for Airbus. Don't tell anyone we're working for Airbus.”

Mr. Moores's history of denials dates back to 1985, which is when Mr. Mulroney appointed him to the board of Air Canada.

The Oliphant inquiry's mandate is to examine only Schreiber's dealings with Mulroney not Mulroney/Moores or Moores/Airbus. Schreiber's biggest challenge yet may be to force Harper to widen the investigation.

Mulroney Playing for Time

Brian Mulroney is looking for a 2-week adjournment of the public inquiry into his dealings with Karlheinz Schreiber.

Mulroney's lawyer contends the extension would give counsel more time to examine documents (gee, what have they been doing all these months?) and allow inquiry head, Justice Jeffrey Oliphant, time to clarify just how Mulroney's conduct is to be assessed.

Pratte wants a line drawn to demarc "above reproach" from "ordinary dirtbag." That fictional line would be the day Mulroney left office. From the Toronto Star:

Oliphant has already rejected a contention by Mulroney that the only proper yardstick for assessing his actions is the 1985 cabinet ethics code he himself put in place.

The judge served notice, in a ruling last month, that he would cast a wider net and take account of ethical provisions contained in federal statutes such as the Financial Administration Act, the Income Tax Act and even the Criminal Code.

Oliphant hastened to add that he didn't intend to draw any conclusions about civil or criminal liability, something he's barred from doing under his mandate.

He concluded, however, that he couldn't be bound by the narrow confines of the 1985 ethics code. "This inquiry is ultimately concerned with the good government of Canada," said the judge.

It's hard to say but Pratte seems to be invoking the legal maxim, "what happens in Vegas, stays in Vegas." Mulroney's team also want to know what smoking guns Schreiber will bring to the inquiry. In the wake of the Commons ethics committee hearings, Schreiber has already disclosed documents suggesting that Mulroney aide Fred Doucet wasn't truthful when he told the committee, under oath, that he had nothing whatsoever to do with the Airbus-Air Canada deal. Doucet's evidence served to corroborate Mulroney's unsworn statements. If, as the documents appear to suggest, Doucet was lying, then it raises no end of questions about Mulroney's evidence.

If you're interested in what started this all, Stevie Cameron has reproduced the anonymous letter she received at The Globe and Mail. She also has the transcript of notes taken during her interviews with the Mulroneys' chef, Francois Martin.

http://steviecameronblog.blogspot.com/

If you're looking for more, check out the items done by The Fifth Estate at http://www.cbc.ca/fifth/unauthorizedchapter/schreiber.html

Mulroney Takes a Hit

Brian Mulroney has failed in a bid to defang the inquiry into his dealings with Karlheinz Schreiber in the Airbus affair. The inquiry is scheduled to commence at the end of next month.

Mulroney's lawyers brought a motion before the inquiry chair, Associate Chief Justice Jeffrey Oliphant of Manitoba's Court of Queen's Bench seeking a ruling that the inquiry could not use the Criminal Code of Canada in assessing the former prime minister's conduct. The motion was rejected.

“I intend to determine, on an objective basis, whether Mr. Mulroney ... conformed with the highest standards of conduct,” the judge wrote.
“I believe that this standard is one that reflects the importance to Canadian democracy of the office of the prime minister, as well as the public trust reposed in the integrity, objectivity and impartiality of public office holders.”

The judge also pointed out that in 1988 Mr. Mulroney distributed a document to his cabinet titled Guidance For Ministers that warned them they had an obligation to go further than “simply to observe the law.”

Yesterday, Judge Oliphant ruled: “If the Prime Minister intended to hold ministers personally accountable to that level, then it follows that he himself would be accountable on the same basis.”

This ruling, while adverse to Mulroney, doesn't mean that the Oliphant inquiry will be any freewheeling review of the facts, particularly the link between the Air Canada Airbus purchase and the former prime minister.

The belief that Mulroney had no personal interest in the Airbus affair was based, in part, on exculpatory testimony by former Mulroney aide Fred Doucette. When he appeared before the Commons ethics committee, Doucette proclaimed, under oath, that he had nothing whatsoever to do with the Airbus business. Shortly afterward Schreiber released a raft of documents strongly suggesting that Mr. Doucette was directly involved in the Airbus deal.

The Globe & Mail reports that Schreiber, meanwhile, has dropped his lawsuit against Mulroney in which he claimed the former p.m. did nothing to earn the cash that changed hands between them. Schreiber has said he dropped the lawsuit rather than reveal documents that he'd rather present directly to Judge Oliphant during the inquiry.

The best thing Brian Mulroney may have going for him at this point is observer fatigue. We're on our fourth prime minister since these events happened. A lot of people think everything has been investigated, all the evidence has been examined. Too bad.

Theatrics, Posturing & Lies

The ride isn't over yet for SHarper's former BFF, Brian Mulroney. Once again, Karlheinz Schreiber has surfaced with new evidence, documents that indicate there was a lot of false evidence, even criminal perjury, presented on behalf of Brian Mulroney to the commons ethics committee's enquiry into the Airbus scandal.

The former head of GCI, Frank Moore's one-time lobbying company, claims the company had nothing to do with Airbus. Schreiber's documents show that just isn't so.

Then there's long-time Mulroney friend and former aide, Fred Doucet, who testified under oath that he had nothing whatsoever to do with the Airbus business. Schreiber has unleashed a raft of documents showing that Doucet was up to his eyebrows in the Airbus business.

The sworn evidence given on behalf of Brian Mulroney was unequivocal but so are the documents and many of them were merely copied to Schreiber by others.

Schreiber who was pretty much written off by the ethics committee has done it again. The question is why now? Why is he releasing these documents now, why didn't he release them when he was before the committee?

I know why. It's captured in the old phrase, "softly, softly, catchee monkey," which refers to the benefits one can often obtain by patiently laying low or playing dead. In doing fraud cases I used to try to make my target believe I was lazy, incompetent or had missed the key points altogether. Once people who feel threatened are made to think the peril is behind them, it's remarkable what they sometimes say.

Schreiber dummied up hoping that Mulroney's witnesses would assume their nemesis had been dispatched, that he was a spent force, and that they were safe in saying whatever they liked.

It's pretty clear that Schreiber hasn't spilled all of the beans, not just yet. He's obviously saving at least some revelations for the commission of enquiry that begins in February, enough he hopes that the commissioner won't be able to duck the Airbus question.

If you missed last night's Fifth Estate, you can watch it here:
http://www.cbc.ca/fifth/2008-2009/the_chess_master/video.html

Airbus - the Tory Scandal That Won't Die

With all eyes on Stephen Harper's weird writhing, it's not surprising that there's not much attention on Brian Mulroney and the Airbus scandal. And yet, CBC has come up with yet another startling revelation. It now seems that Mulroney aide Fred Doucet might have been lying when he appeared before the Commons ethics committee.

Here's what Doucet stated under oath on 28 February this year: “I want to say I have no knowledge at all about anything involving Airbus.”

According to the CBC, that's simply not true:

"...a CBC News investigation has learned that on the same day Mulroney received his first envelope of cash from German-Canadian businessman Karlheinz Schreiber at a hotel in Mirabel airport, Doucet, who had arranged the meeting between the two men, received a fax from Air Canada outlining the delivery schedule of Airbus airplanes to Air Canada.
The Aug. 27, 1993, fax from Air Canada’s manager of investor relations, Denis Biro, itemized the delivery of 34 Airbus planes between 1990 and 1993.

That was important to Doucet because he was interested in determining how much money was left in the secret 1988 deal between Airbus Industrie and a Liechtenstein shell company, International Aircraft Leasing, or IAL.

The fax and other documents that Schreiber has provided to CBC News and the upcoming Oliphant Commission looking into the financial dealings between Schreiber and Mulroney appear to contradict Doucet's testimony before the ethics committee.

In fact, letters and correspondence among Schreiber, Doucet, and lobbyist and former Newfoundland premier Frank Moores reveal that Doucet was involved in an in-depth effort to determine how much money was available from the Airbus deal.

Their concerns first surfaced when Moores, owner of Government Consultants International (GCI), sent a handwritten fax to Schreiber on March 16, 1992, explaining why the commissions weren't going to be as large as they'd thought.

A week later, Doucet wrote a letter to Schreiber saying that Moores was not calling him back. “I do not want to bother you with the matter of The Birds,” Doucet wrote. “As I recall, you felt that by now I would have heard from F.M. I have not heard from him.”

After receiving the Aug. 27, 1993, fax from Air Canada's Biro, Doucet wrote a memo to Schreiber. “Mr. Biro has confirmed that 34 Airbus have been purchased and delivered to Air Canada according to the enclosed schedule,” he wrote. “I sincerely hope that this evidence, many times stated before, is emphatically and categorically related to F.M. [Frank Moores].”

In a letter to Schreiber on April 28, 1994, Doucet reported on his assignment to find out how many Airbus planes were bought and fully paid for by Air Canada.

“I truly hope this removes the confusion. In fact, it’s even better than I had hoped because the total sale was 34, not 32,” Doucet wrote. “For me, settling this matter is so very important for reasons I will tell you about in person.”

Piece by piece the truth behind the Airbus scheme is coming out. It's unfortunate that Frank Moores is dead. There are so many questions he ought to be answering. But what about Mulroney's key aide, Fred Doucet? What were his "so very important" concerns about Airbus, why wouldn't he outline them in writing, why did he testify under oath that he knew nothing, zip, nada about the whole Airbus business?

The Ethics Committee's Ethical Quandry

Brian Mulroney has sent his stooges to Ottawa to tell the Commons ethics committee that he'd rather not face any more questions into his shady dealings with Karheinz Schreiber. That's entirely understandable from his perspective. He's spun so many tales that he's cornered and, for BMPM, it can only get worse.

The committee could subpoena Mulroney to attend and even have him brought before them forcibly if he resists. Now wouldn't that be a sight. But it seems the committee doesn't have the appetite for subpoenaing a former prime minister, even one of Mulroney's shabby stature.

I think the committee should just put the Mulroney issue on hold - for now. There are several other witnesses who should be called to testify including one Robert Hladun, Schreiber's former lawyer. It was Hladun who basically confirmed author William Kaplan's hunch that it was Schreiber who leaked the RCMP letter that led to the National Spot article that served as the launching pad for Mulroney's lawsuit against the federal government. I'd like to hear that from his own mouth.

Then there's the phone calls - two of them - Hladun supposedly received; one from Mulroney's lawyer, the other from the lawyer and Mulroney himself. Schreiber's narrative has these calls being placed to Hladun to get a letter or an affidavit from Schreiber claiming that no monies had ever changed hands between Schreiber and Mulroney. This was back when CBC's Fifth Estate revealed it had copies of Schreiber's Swiss bank records and - here's the kicker - before Mulroney's "voluntary disclosure" to Revenue Canada.

If Hladun corroborates Schreiber's account of these calls, it's over for Mulroney, he's suborned perjury, and that goes directly to his credibility when he gave a grossly misleading answer about his dealings with Schreiber in his sworn evidence in the lawsuit itself. Cheque please, Mr. Mulroney - and don't forget the interest.

The committee may not have the spine for a showdown with Brian Mulroney but there's no excuse for not getting Hladun's sworn evidence on these points.

Since When Does a Prime Minister Lobby for a Lobbyist?

Karlheinz Schreiber may be a sideshow in the financial affairs of Brian Mulroney. It was always thought that Schreiber received the $20-million in Schmiergelder, or grease (bribe) money, paid out by Airbus Industries in the course of the Air Canada deal. Schreiber says that money went, instead, to GCI (Government Consultants International), a lobby firm owned by Mulroney croney, the late Frank Moores.

GCI is gone and Frank Moores is dead so getting to the bottom of this is going to be more difficult than it otherwise might. That said, the records of Air Canada and its board during the Mulroney years do exist and might shed a lot of light on what happened.

Why did Mulroney sack some 15-Air Canada directors and why did he include among the replacements he appointed Frank Moores? Why did Frank Moores hurriedly resign this directorship? Why did Moores repeatedly deny claims that he and GCI acted for Airbus on the sale (although correspondence has emerged plainly showing just that)? Why did Moores run off in lockstep with Mulroney to make his own "voluntary disclosure" to Revenue Canada when Schreiber's Swiss bank records became public?

One thing, however, stands out. It's been reported that Mulroney repeatedly pressured the Air Canada board to pay GCI a $5-million fee of some sort related to the Airbus purchase. Did Mulroney, while prime minister, really lobby for the lobbyist and, if so, why and what did he get out of it? Why would Air Canada pay a fee to GCI if it was acting as lobbyist for Airbus? Did any money pass from Air Canada to GCI or Frank Moores and, if so, how much and for what?

Norman Spector did ponder what the Commons ethics committee might have learned had it held the current enquiry back in 2002 while Moores was still alive. It's too bad he was never asked to expand on that thought.

Coyne Stirs Up the Ashes

Stephen Harper has a mentor, a guy named Brian Mulroney. It's no secret they talk regularly, sometimes daily. Mulroney still dreams of the day his greatness will be acknowledged by a grateful and repentent Canadian people. Dreams.

In today's NatPo, columnist Andrew Coyne writes of Stevie Cameron's latest troubles and also raises a few loose ends Mulroney needs to clean up:

So Ms. Cameron's reputation is shot. What of Mr. Mulroney's? If his long-time antagonist has been discredited, does that mean he has been vindicated? Not a bit. It was partly as a result of those same Eurocopter hearings that evidence came to light of Mr. Mulroney's dealings, shortly after he had stepped down as prime minister, with Mr. Schreiber -- namely, that he had accepted a total $300,000 from Mr. Schreiber, in cash, in a series of hotel-room meetings.
That Mr. Mulroney had taken money, after leaving office, from the very man he was accused of taking bribes from while in office, in the Airbus affair, was a shocking revelation -- particularly so, since Mr. Mulroney had stated, under oath, in his famous 1995 libel suit against the government of Canada, that he "had never had any dealings" with Mr. Schreiber, short of meeting him once or twice for coffee. Whether Mr. Mulroney deliberately misled the court is an open question, but it is a certainty that the government of Canada, had it known of the Schreiber payments, would never have agreed to settle with him, or to pay him $2-million in compensation.

Mr. Mulroney does not deny -- now -- that he took Mr. Schreiber's cash. And he insists that the money was declared, and taxes paid. But he has an obligation-- to the public, to the office he once held, to his own reputation -- to explain himself further, including what he did for the money, and when he declared it.

Unfortunately for Mr. Mulroney there's even a tape of his sworn deposition so we can all hear his sonorous voice unequivocally stating, under oath, that he had no dealings with Schreiber. It was on the strength of that forceful denial from a former prime minister that the Chretien goverment folded and handed Big Brian two million dollars of our money.

The other facts surrounding this story, unearthed by CBC's Fifth Estate, are even less flattering for Muldoon. He and Frank Moores got their money but neither declared it on their tax returns. Huh, why not? Only after the dealings were unearthed did Mulroney and Moores made "voluntary disclosures" to Revenue Canada and pay up their back taxes.

Yes, Mulroney should be returning that two million, with interest and the government's costs in the form of a nice cheque he can put straight into the hand of his new pal, Stephen Harper. He should also give this country and all Canadians a full apology. He owes us that.