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Review: The Truth Shows Up, Airbus Scandal, by Harvey Cashore

Police escort German-Canadian arms dealer Karlheinz Schreiber from Parliament Hill in Ottawa following his appearance before the Commons ethics committee in 2007.

Reuters

Harvey Cashore, as a young investigative journalist with CBC's the fifth estate, received a tip in 1994 that a European consortium, Airbus Industrie, had paid bribes in 1988 to win a $1.8-billion order from Air Canada for 34 passenger jets. He would spend the next 15 years sleuthing after the story.

Rumours had circulated. The break came after two partners fell out over money. Karlheinz Schreiber was business agent for Franz Josef Strauss, chairman of Airbus Industrie. Giorgio Pelossi was Schreiber's Swiss accountant.

Schrieber charged Pelossi with pilfering his secret Swiss account. Pelossi retaliated by leaking to Der Spiegel explosive documents revealing a scheme to bribe businesses and politicians in Germany and Canada. The documents led to officials being jailed in Germany. In Canada, no one would be held to account. A number of lawsuits erupted. Brian Mulroney won a $2.1-million settlement and an apology from Ottawa. Schreiber launched a $35-million libel suit against CBC and Cashore. Frank Moores sued for $15-million.

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Cashore explores the labyrinth of lies, denials, deceptions, coded names, Swiss accounts and concealed actors. His book, a personal account of his long quest, reads like a whodunit.

He follows the German connection. When Mulroney undermined leader Joe Clark at the 1983 Winnipeg Tory convention, money for his Quebec delegates' travel expenses was contributed by two protégés of Franz Josef Strauss, Schreiber and Walter Wolf. Both were committed to penetrating the powerful inner circle around Mulroney in early 1980s Montreal, Cashore writes.

On Sept. 17, 1984, Mulroney became prime minister. On Nov. 11, an intriguing internal document celebrating the event was written by Kurt Pleiderer, vice-president of MBB Helicopter - one of three firms that financed Schreiber, along with Airbus and armaments-maker Thyssen Industrie.





Pfleiderer wrote: "The working together with members of the new Canadian government was already tight before their election victory and among other things has contributed to the winning of the Canadian helicopter call for tenders." He credited "Mr. KH Schreiber" and "Frank D. Moores" for their efforts.

Pfleiderer also explained why MBB's Canadian branch would appoint to its board Mulroney's university friend, Bob Shea: "The Minister [of Defence, Bob Coates]explained that it was the personal wish of the Prime Minister to engage Mr. Bob Shey [sic]from Boston, an American industrialist."

Pfleiderer wrote that MBB would "seal a consulting contract with Alta Nova Associates (Mr. Frank Moores) for c.a. $72,000 Cdn a year with charges for later success fees."

On March 13, 1985, an ultra-secret contract was concluded between Airbus and Schreiber's shell company, International Aircraft Leasing, with only one signed copy, held in Switzerland. It stated that IAL would receive $500,000 for every Airbus plane bought by Air Canada, but only if IAL had secured the sale. Another condition, Cashore explains: "The contract stated the deal would be terminated 'automatically' if there was a major political change in Canada. In other words, if Mulroney was no longer in power, the agreement was null and void."

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March, 1985, was also when Mulroney fired the entire board of Air Canada and replaced it with friends and Tory loyalists, including Frank Moores, leader of his campaign to dump Joe Clark.

Two months later, Schreiber wrote to another MBB executive: "I would like to bring a very important point to your attention: of course use the contact through CGI (Frank Moores), also for other projects which are connected to the Canadian government. … The use of this contact not only makes sense but is expected from the other side for many reasons."

Those close to Mulroney who joined Government Consultants International as lobbyists, notably Moores, Gary Ouellet and Gerald Doucet (brother of Mulroney's chief of staff Fred Doucet), all denied business dealings with Schreiber or his boss, Strauss. But Cashore cites documents proving otherwise.

And Mulroney? When questioned under oath for his 1996 suit against Ottawa, Mulroney minimized his meetings with Schreiber while prime minister and evaded any hint of the stacks of thousand-dollar bills he received in three meetings afterward, as he was later forced to admit..

"When he was going through Montreal, he would give me a call. We would have a cup of coffee, I think once or twice."

The government's lawyer asked: "And was he [Schreiber]known to you as a friend of Franz Josef Strauss?" Mulroney replied: "He was not known to me as that, but I subsequently read that he was known to Mr. Strauss. I did not know Mr. Strauss myself, nor did I know any of his family."

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He was asked: "Is it not a fact that Franz Josef Strauss was the chairman of Airbus?" Mulroney replied: "I knew of Franz Josef Strauss; I didn't know him personally, I never met him, but I knew of him as the premier of Bavaria and as a minister of finance in the Federal Republic. I had no idea what his other occupations may be." So he had never heard of the chairman of Airbus.

Mulroney hired his friend from university, Pat MacAdam, as the prime minister's appointments secretary. MacAdam recalled Schreiber meeting Mulroney with Franz Josef Strauss's son Max. "I was the gate-keeper then, and kept the appointments, and he'd come in with Max Strauss and say hello and leave." And how often did Schreiber meet Mulroney back then? "Oh, maybe five, six, seven times a year."

MacAdam also stated: "The father, Franz Josef Strauss, was a good friend of Mulroney's years gone by."

A commission of enquiry called in 2008 under Mr. Justice Jeffrey Oliphant is scheduled to report at the end of May. But nothing conclusive is expected: Its terms of reference excluded investigating any connection Mulroney might have had to the Airbus deal. That's staging Hamlet without the Prince of Denmark.

Cashore's book makes a valuable contribution to Canadian historiography. He exposes sordid facts that are generally unknown or ignored. But his work remains unfinished. The book cries out for a convincing answer to the enigma of the Airbus scandal: Where did that $20-million in shmiergelder (grease money) money go?

Journalist William Johnson first wrote of Brian Mulroney in The Globe and Mail in 1974. He is also author of the biography Stephen Harper and the Future of Canada.

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