It was a shocking claim. In the confines of a closed-door Toronto court hearing, one of Canada's better-known lawyers drew a bead on one of Canada's better-known investigative journalists: "A major political enemy of the Right Honourable Brian Mulroney," Edward Greenspan declared, "and she's somehow in bed with the RCMP."
- style="list-style: none">Please see:
- Was journalist RCMP informant?
- 'An abuse of power of the worst kind'
- 'This is not the way you do business in Canada'
Greenspan accused Stevie Cameron of being so out to get the former prime minister, so keen to catch him doing something wrong, that she broke a key tenet of her craft and enlisted as a secret informant to help the police expose him as corrupt.
For two days, Greenspan castigated Cameron in his attempt to have a judge throw out the highly unusual secret warrant that in December, 1999, had allowed the Mounties to spend three days searching the Fort Erie, Ont., offices of Eurocopter Canada.
Greenspan's client, German-born businessman Karlheinz Schreiber, is alleged to have shared in more than $1-million in improper commissions after the German-based subsidiary's predecessor company sold 12 light helicopters to the Canadian Coast Guard in 1986. Also fighting to keep Schreiber from being extradited to his homeland to face tax-fraud charges, Greenspan wanted the warrant quashed to keep the helicopter allegations from being made public.
If he could show the case against Eurocopter was tainted because the abortive, infamous Airbus investigation from which it stemmed was itself tainted by Cameron's actions, Schreiber might escape unscathed. And by the time Greenspan had finished his argument in court, Cameron's role in the investigation had become an issue.
But what if Mulroney had a business relationship with Schreiber after all, not while he was in office but soon after leaving it?
For years, Cameron tried to establish, in book after book and speech after speech, that Mulroney was, as she almost asserted flat out, "on the take."
But the best she and her famous research binders - crammed with information about Mulroney-government wrongdoing, real and imagined - were able to establish was that some of those around Mulroney had crossed the line. The same has been said of prime ministers before and since.
On Mulroney, Cameron could never prove that he, personally, had done a single improper thing. Even the information she provided to the police, which eventually helped to spark the government's infamous 1995 letter to the Swiss that called the ex-PM a criminal, did not do the trick.
When Mulroney's ensuing defamation suit was settled, the RCMP and the government acknowledged there was no evidence of any unlawful activity on his part.
Whatever had been handed over had caused him huge damage, but fallen short of criminal charges.
However, the RCMP's' investigation into the three big projects - Air Canada's purchase of $1.8-billion worth of Airbus planes, the coast guard's $27-million worth of helicopters and German-based Thyssen Industries' proposed Bearhead project to build armoured military vehicles in Cape Breton - continued long after Mulroney settled his suit.
"Airbus probe still a top file for RCMP," Robert Fife, the well-connected reporter for the National Post wrote on Dec. 29, 2001. "Thousands of RCMP officers were redeployed after Sept. 11, but not the seven officers and team of forensic accountants assigned to the Airbus investigation. RCMP Cor-poral Louise Lafrance told the National Post yesterday the Airbus inquiry is one of the `big investigations' kept intact."
Frank Moores was, Fife reported, far from impressed: "The thing has been going on for almost seven years and I have no idea whatsoever when they'll release my accounts." Unable to earn much of a living since Airbus, Moores wanted access to his money.
But as Fife reported: "The RCMP refuses to discuss details of the case or to explain why Moores's accounts remain frozen. Moores, an Ottawa lobbyist during the Mulroney years in government, said he was completely up-front as soon as the Airbus investigation was leaked to the media in November, 1995.
"He did not resist RCMP demands to obtain his Swiss bank account, and contacted Revenue Canada to settle any outstanding taxes."
This spring, however, the government finally called the whole thing off.
Dated April 22, 2003, the announcement was completely straightforward: "After an exhaustive investigation in Canada and abroad, the RCMP has concluded its investigation into allegations of wrongdoing involving MBB Helicopters, Thyssen and Airbus. In October, 2002, a charge of fraud was brought against Eurocopter Canada Ltd. (formerly MBB Helicopters Canada Ltd.) and two German citizens, Kurt Pfleiderer and Heinz Pluckthun.
"The RCMP has now concluded that the remaining allegations cannot be substantiated and that no charges will be laid, beyond the charge of fraud already before the courts. A preliminary inquiry in the Eurocopter fraud charge is scheduled to begin Sept. 8, 2003, at Ottawa.
"Today's announcement fulfills a commitment made by former commissioner Phil Murray to announce the results of the Airbus investigation once the RCMP concluded its investigation."
The case had gone on for eight years and cost untold millions, not to mention the $2-million the government had to reimburse Mulroney for expenses incurred in his $50-million defamation suit. In the end, only Eurocopter and two MBB officials in Germany were ever charged with anything.
The Germans, Pfleiderer and Pluckthun, have declined the Canadian invitation to attend the preliminary inquiry. An Interpol arrest warrant for the duo was issued, but as long as they stay in Germany the chances they'll be forced to face charges in Canada are nil. The preliminary is not expected to end until 2005, but with no evidence that Eurocopter's Canadian officials did anything wrong, how the Crown's case can succeed is a bit of a mystery.
Mulroney was informed first that the investigation was over - the RCMP came to see him and hand-delivered the letter from Commissioner Giuliano Zaccardelli. Schreiber and Moores also got a heads up on the notification personally transmitted by the force.
The news for the three was welcome - being told that a criminal investigation is over always is - but many questions remained unanswered. Who knew what in government and when? Was the investigation politically motivated? And where did the all the money go? One thing Cameron did establish was that a lot of money was paid in commissions for various transactions including Airbus and the helicopter sale. We still do not know precisely who got it and for what, and now maybe we never will.
Some loose ends will never be tied up, but others now can, including, most interesting of all, that Mulroney did enter into a commercial relationship with Schreiber after leaving office.
Award-winning National Post reporter Philip Mathias got the story first, nailing it down in late 2000 and early 2001: "Brian Mulroney was paid $300,000 in cash by German businessman Karlheinz Schreiber, the man at the centre of the Airbus affair, over an 18-month period beginning soon after Mulroney stepped down as prime minister in 1993."
The story made it clear that the payments had nothing to do with Airbus, or any of the other wrongdoing asserted in the 1995 letter of request. The story noted that, at the time the payments were made, Mulroney was re-establishing himself in the private sector and there was no reason not to do business with Schreiber, who was not, at the time, embroiled in the various legal proceedings and political scandals that would soon overtake him.
The Post interviewed Schreiber for the story and quoted him as saying that the business relationship between the two was "normal" and it was not up to him "to report on Brian Mulroney to the Canadian public." The story also pointed out that $300,000 was not an unusual sum for providing legal and lobbying assistance on big-ticket items.
Mulroney apparently declined to comment for the story, as did his lawyers. However, Mathias did get to speak to a "Mulroney confidant" who told him that "the former prime minister earned the fee in full" by performing services for Schreiber after the fee was paid. The Post was not told the nature of the work or when it was done. Asked why Mulroney had not made this matter public sooner, the confidant replied that Mulroney was fearful of creating a false impression in the middle of what he described as "a witch hunt over the so-called Airbus affair."
Mathias said the amount involved paled in comparison with the millions Mulroney was alleged by the Canadian government and others to have taken as a payoff for Airbus and the other transactions. Mathias also believed, but could not apparently confirm, that the purpose of the retainer was to assist in kick starting the Bearhead vehicle project, in Cape Breton if possible or, if politics demanded it, in the east end of Montreal.
After working on the story for months, Mathias submitted it in early January, 2001, just weeks before his scheduled retirement. It went for legal vetting, was approved and emerged from editorial fairly edited. Mathias waited and waited and waited. Nothing happened.
He began to ask questions and pester. He finally wrote to the proprietors - at that time there were two of them: Conrad Black and the Asper family. Finally, in a letter near the end of March, he complained. He told the owners that Mulroney received the cash beginning soon after he left office in 1993 to return to the private sector and accepted the last payment in December, 1994 - four months before Airbus started coming to light. Why, he asked, was the story not published? It was, he suggested, clearly newsworthy.
A few days later Mathias was summoned to a meeting with senior editorial staff. The meeting did not go well. Why, he was asked repeatedly, was he pursuing the story? There was, he was told, no story. Why, he was asked, had he gone over his bosses' heads?
Discussion then turned to the merits of what he'd written. Mathias took the position that a story about a former prime minister accepting $300,000 in cash from an international arms merchant was newsworthy. There was further discussion, a line-by-line dissection of the story, more observations on why it wasn't a story, and finally the meeting ended.
That night, Ken Whyte, then the editor-in-chief of the Post, called Mathias at home. He had not been at the meeting but said the views of the editors on the story reflected his own. If there really were something there, it had to be placed in context. Whyte suggested that Mathias contact me, being the author of a book about the whole thing, to do that.
I was contacted and provided a comment, on the condition that it be published in its entirety. It went as follows: "I generally prefer to withhold comment until I have all the facts, but let me make the following observations about what you have told me. First, building a second light armoured vehicle manufacturing facility in Canada - as you know we already had one in London, Ontario - was always predicated on huge infusions of federal cash - hundreds of millions of dollars in either guaranteed orders or infrastructure and other support. It did not matter whether the project was to be located on Cape Breton Island or the east end of Montreal. This fundamental fact - that hundreds of millions of taxpayer dollars was required to fund the initiative, made it uneconomic when Mr. Mulroney was prime minister and none of the underlying economic, political or other factors leading to the rejection of the proposal by Mulroney had changed when Mr. Chrétien became prime minister. Given all of this, what exactly did Schreiber think he could achieve?
"On this point, you tell me that Mr. Schreiber paid Mr. Mulroney to assist him in this endeavour from some time in the summer of 1993 until December, 1994. While it is conceivable - but for the reasons already given, unlikely - that Mulroney could have helped the project if Kim Campbell was elected prime minister, it is inconceivable that Mr. Chrétien and his Liberals would have been responsive to any initiative spearheaded by Mr. Mulroney and that is why, presumably, Mr. Schreiber retained Marc Lalonde. Why, then, would Mr. Schreiber have paid Mr. Mulroney for anything for services after the fall 1993 election? In other words, how this project could have been advanced with Mr. Mulroney on the payroll after the Liberals got into power is beyond me.
"You tell me that $300,000 was delivered to Mr. Mulroney in cash. Frankly, this is the strangest part of the story and I would like to know a little more about it as it seems, I must say, improbable. I cannot imagine money being delivered in the sense payments of cash connote. So what exactly is meant by cash? Invoices sent for services delivered compensated by wire transfers? Obviously, a lot of questions are raised by this account and until those questions are answered I am not sure what to make of it. The first thing to do would be to ask the former prime minister for an explanation.
"Finally, and this is the most important thing I have to say. On Airbus, Mulroney was presumed guilty. In fact, he was not guilty of anything. You do not have to believe me about this. The CBC's fifth estate said so; Stevie Cameron, Mulroney's nemesis, said so. Judge Alan Gold, who arbitrated the award of legal fees to Mulroney, concluded that he suffered a grievous injustice, and my own study determined that he had nothing to do with Airbus. So whatever implications people might wish to draw from this new account, I would suggest that some caution is in order before jumping to any conclusions."
Mathias continued to press for publication of his story but got nowhere and eventually gave up. The environment for its publication, he reflected years later, was just not right. In fact, the atmosphere was downright hostile, and so a newsworthy story was relegated to electronic purgatory on the Post's hard drive.
Mathias was a veteran reporter with very good sources. He was the journalist who broke the news that the government of Canada had sent the Swiss a letter calling Mulroney a criminal, and he had been working on different angles of the story ever since. Now he had uncovered one of the biggest scoops of his career and, instead of getting the front-page treatment the story deserved, it was suppressed and he was treated as though he had a communicable disease.
A long career in investigative journalism ended in disgust, and The Post continued its campaign of bemoaning the so-called victimization of Mulroney by the RCMP and others on the one hand, while puffing him on the other, particularly when doing so cast the current Prime Minister in a less positive light.
All the while there was time bomb waiting to go off. The story could not die.
A public-relations catastrophe for Mulroney had been averted, but the respite was only temporary. I had learned of the payments, and I wanted an explanation. If all this were true, my book clearly required a sequel.
Asking for Mulroney's side of the story was the first step. Eventually he explained that Schreiber had paid him the money - though he disputes the amount - for his assistance in promoting a fresh-cooked pasta business Schreiber had started in Canada as well as his international interests.
When he joined Ogilvy Renault, Mulroney made it clear, he asserts, to his future partners that in addition to practising law, he would be a consultant.
His clients' names are confidential and will not, he insisted, be released without their permission. "If," he said, emphasizing the word, clients paid for his services in cash, that would be reflected in the books of the company, all income would be declared and all taxes paid.
Had Mulroney been retained to lobby for Bearhead, at the very least, he would have had to register as a lobbyist, which he did not, and there might have been conflict-of-interest issues, given that he had so recently been prime minister, and hadn't stepped down as a sitting MP until the Oct. 25 election.
So it seems Mathias got that part of the story wrong. According to longtime Mulroney spokesperson Luc Lavoie, the money was paid "to assist Schreiber with his pasta business and to arrange a number of introductions and meetings with international business executives."
Mulroney, Lavoie added, never lobbied for Schreiber and so never had to register as a lobbyist. "All income was declared and all taxes paid."
It was straightforward from the get-go, Lavoie insisted. "The truth is," he said in an interview, "Mulroney never had anything to do with Airbus, he had nothing to do with MBB and he had nothing improper to do with Bearhead. Being hired as an international adviser after he left office was entirely consistent with the practice he was setting out to establish."
Fair enough. For all intents and purposes, Schreiber was a well-connected businessman with interesting projects and plans, and Mulroney could help.
But why was Mulroney never asked any questions about all this back in 1996, when he was examined by government lawyers in Montreal as part of his libel suit? How did they all miss such an obvious line of inquiry?
The examination on discovery, as it is known in Quebec, began on April 17, 1996, and took about a day and a half. Mulroney was asked, and answered, a lot of questions about Schreiber and his involvement with Schreiber's efforts on behalf of Thyssen to build the light armoured vehicles in Cape Breton.
Obviously, any Canadian prime minister would be interested in bringing manufacturing jobs to an area with one of the country's highest unemployment rates. Mulroney was repeatedly asked about it and repeatedly made the point that it was his government that decided not to go ahead with the project. A number of underlying political and economic assumptions just didn't make sense.
Mulroney observed that Schreiber was indefatigable. No matter how many times he was turned down, he would come back with a different twist or spin in order to attract the government's interest. For example, when Ottawa said no to light armoured vehicles, he proposed building "peacekeeping vehicles" for use by Canadian troops and others on United Nations missions. But Canada already had the facility in London, Ont., for building this kind of vehicle, and there was no way Mulroney's government was going to spend the $100-million or so required to help launch a second one.
Examinations on discovery provide each side in a legal action with fairly wide scope to ask the other side questions in order to prepare for the forthcoming trial. This one provided the government lawyers with an opportunity to put Mulroney's relationship with Schreiber under a microscope. But not once in the hundreds of questions put to the former prime minister, was he ever asked point-blank whether he had taken money from Schreiber.
The central claim made against him in the 1995 letter to the Swiss was that he'd been paid off. Had Mulroney been asked whether he'd taken a bribe, he obviously would have denied it. And there is no evidence that he had. Asking him whether he'd done business with Schreiber was a fairly logical place to start, along with a detailed inspection of every call, every letter, every visit - everything to do with anything that involved the two men.
Yet Mulroney was never asked exactly how many times they had met, in what circumstances and where. The questions related to Bearhead almost exclusively and largely focused on Mulroney's activities while in office. He was asked very little about their relationship after he stopped being PM.
But the topic wasn't avoided completely.
Question: "Did you maintain contact with Schreiber after you ceased being prime minister?"
Answer: "Well, from time to time, not very often. When he was going through Montreal, he would give me a call. We would have a cup of coffee, I think, once or twice. And he told me that he continued to work on his project, that he was pushing a new government. And he told me that the idea of the project at that point was the same project, but the desirability at the time was to work with the provincial Government of Quebec and the federal government, the new federal government, to establish this new project in the east end of Montreal, where the jobs were badly required. And he told me that he had hired Marc Lalonde to represent his interests before the new Liberal government."
"I wasn't really surprised because the word in Ottawa is that Schreiber and Lalonde had had a long relationship in the past. And so he also expressed dismay with me that my government had not agreed or could not include the contract that he liked.
"So, he said that he had hired Lalonde, and he hoped this would give rise to an agreement."
Question: "When he passes through Montreal and visits you, is it at your office or at your home?"
Answer: "Well, he doesn't pass through Montreal and visit me. He comes when he's on his way to Montreal. He called me and asked me, and I say perhaps once or twice, if I could come to a cup, have a cup of coffee with him at a hotel. I think I had one in the Queen Elizabeth Hotel with him."
Question: "Oh. So it's at his ....."
Answer: "I had one in the ....."
Answer: "..... in the coffee bar of the Queen Elizabeth Hotel."
Mulroney also was asked a number of times about his conversations with Schreiber after Schreiber informed him of the existence of the 1995 letter to Swiss authorities.
Question: "And the Canadian government alleges that very substantial sums were paid to Schreiber by Airbus Industries, and you didn't discuss with Schreiber whether it was true or not?"
Answer: "The document said, among other things, this: 'This investigation is of serious concern to the Government of Canada, as it involves criminal activity on the part of a former prime minister.' This is not an allegation, this is a statement of fact where the Government of Canada is judge, jury and executioner.
"And what preoccupied me - inasmuch as I had never heard of the Airbus matter in my life - what preoccupied me were the extraordinary falsehoods and injustices as they involve me. And I wondered with my family and friends, quite frankly, how in the name of God could this come about? How can something like this actually take place.
"And the fact that Mr. Schreiber may or may not have had any business dealings was not my principal ..... my principal preoccupation. I had never had any dealings with him."
"I had never had any dealings with him."
This was not quite correct. He had never had any dealings with him on Airbus. He had never had any dealings with him on the helicopter purchase. He had some prime ministerial dealings with him on Bearhead - he turned down the project and a request for federal money. But he had dealings with him while in office and since.
Later in the transcript, this exchange occurred: Question: "Perhaps I misunderstood. When you talked about having coffee with Schreiber at the Queen Elizabeth, it was in the period subsequent to November, 1995?"
Answer: "No, no, it was after I left office in 1993, and that's when he told me, as I indicated to you, that ..... he was dismayed that my government had not allowed him to proceed with his desire to build this Thyssen project.
"And that's when he told me that he had hired Marc Lalonde to represent him because he figured that Lalonde could prevail upon Chrétien and the government to have this done in the east end of Montreal. Which, by the way, had they been able to do it ..... I thought it was a good project, and so I wouldn't have been critical of anything.
"He told me he had hired Lalonde to do that; he told me he was contemplating legal action against my government; that [he]had hired a prominent law firm in Ottawa - I think Ian Scott's law firm, very distinguished lawyer - to take action against ..... the bureaucrats in my government who, he alleged, had frustrated the fact that he was never able to get a deal through. This deal ..... that was the kind of conversation we had.
"He expressed the hope that Lalonde would be successful in persuading the new Liberal government to agree to conditions that would enable him to proceed with the project. That was it."
"That was it."
And yet Mulroney had by then accepted a retainer of some kind from Schreiber. The questions to him were badly framed - and very carefully answered .
An explanation has been offered about why Mulroney was not more forthcoming, given his commercial relationship with Schreiber. Earlier, he had offered to come to Ottawa and to make a complete financial disclosure - income-tax returns, business records, everything - to government and RCMP officials. He was turned down flat. His envoy was advised: We are just beginning our investigation.
Since then, the lawsuit had commenced and many months had passed. Mulroney was now facing at least nine government lawyers and he had no intention of doing their job. He had promised to respond to questions truthfully but did not volunteer any information.
Context is, of course, everything. So too, as Bill Clinton showed the world when he tried to explain what happened with Monica Lewinsky, are meaning and interpretation. But Mulroney did have ample opportunity to come clean about his professional relationship with Schreiber.
Instead, he helped to create the impression that he carefully considered Schreiber's business proposal when he was prime minister - but rejected it after determining it wasn't in the best interest of the Canadian people - and subsequently maintained, at best, a cordial and infrequent acquaintance with Schreiber after he left office. Was it perjury? No. Had he misled the Canadian people? Probably yes. Should he have seized the opportunity to set out the entire story? Absolutely.
There were, Luc Lavoie points out, "nine lawyers sitting there on the government side and not one of them ever asked Mulroney whether he got money from Schreiber."
And what if they'd done so? "If they had," Mulroney told me recently, "I would have answered the question." But not according to Lavoie: "They would have been told that the relationship was privileged."
The government lawyers, Mulroney counsel Jacques Jeansonne explains, had no entitlement to ask Mulroney any questions about this payment, and Jeansonne has a technical explanation about the operation of the rules of civil procedure in Quebec and how those rules, properly applied to this case would have, if a question had been asked, been interpreted to disentitle the government lawyers to an answer.
But a technical defence, even a successful one, would have harmed Mulroney in the court of public opinion. The lawyers examining him may have blown it badly, but didn't he have an obligation, a special obligation as a former prime minister, to make it perfectly clear that he and Schreiber had a commercial relationship? It was, after all, by all accounts a proper commercial relationship. In a recent interview, Schreiber confirmed that he retained Mulroney's services "for totally legal reasons after he left office."
You have to admire Mulroney's bravado: suing the government for $50-million to refute a claim that he had been bribed by Schreiber when the two had done business together. Balls of steel. Had the government lawyers learned about it, they might never have settled. It was a very close call.
What is also very surprising about it all - and arguably telling of their legitimacy and Mulroney's innocence - is that Mulroney did not just deny the payments. Doing so, presumably, would have been the easiest course, as there were, by all accounts, no witnesses to the exchanges. Mulroney did admit them because the payments were above board.
Not that Mulroney doesn't have regrets: "If you accumulated all the sorrow over all my life, it does not compare to the agony and anguish I have gone through since I met Schreiber." he says. "I should never have been introduced to him because the people who introduced me to him didn't know him."
Today, at 64, Mulroney looks older and more tired than he should. Clearly he is weary of it all. Having his lawyers at the lengthy secret trial cost him hundreds of thousands of dollars, but at least it was money well spent.
Because, finally, the trial gave him the sustenance for his hunch that Cameron, his long-standing critic, was at least partly responsible for the criminal investigation that could have destroyed him. And now thanks to behind-closed-door proceedings and disclosure of the RCMP briefing notes, he had some pretty compelling evidence.
He insists that, no matter what, everything he has done is "clean as a whistle. ..... I can also tell you that I have declared every cent that I have ever received and I have paid all income tax on all monies owing.
"My affairs have been above board and proper, and I am not concerned about any of the legal implications whatsoever," he says, repeatedly saying that the RCMP investigated thoroughly and "gave me an apology letter." (In reality, the force simply announced the end of its criminal investigation but, again, interpretation is everything.) Most of all, he is adamant that the revelation of the identity of the informant not be overshadowed by any suggestion that he and Schreiber did anything wrong.
"Anyone who says anything about that," he says, "will be in one fuck of a fight."
Postscript: When I finished Presumed Guilty, my book about Mulroney and Airbus, I concluded with the words "the investigation is continuing."
Police investigations, like politicians, come and go, but history is always up for re-examination. Not long after the criminal investigation ended, William Thorsell, a former editor of this newspaper, commented: "But concluded the matter is not. Records of other actions now before the courts will eventually be made public, and could contain substantially more information about the origins of this fiasco. A great stain has been made on the administration of justice in the Airbus affair, and history demands that we know much more about how it happened."
We now know a little bit more. A secret trial has been exposed - disturbingly it is not the only case in Canada today being held behind closed doors, keeping vital information from the public - and some of the loose ends have been tied up and some new questions raised. But none of us has the final word. The RCMP may have called it off, but as far as I am concerned, the investigation is still continuing.