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Mulroney pressured to pay back $2-million defamation settlement

The Canadian bureaucrat who paid more than $2-million in public money to settle a lawsuit with Brian Mulroney says he expects the Oliphant inquiry's criticism of the former prime minister's testimony to spur the government to explore how it can recover those funds.

"In light of the report … I would be surprised if the Department of Justice was not reviewing whether or not there's a basis for recovering the $2.1-million that was paid at the time of the settlement," said George Thomson, the deputy minister of justice who agreed to cover Mr. Mulroney's legal and public relations costs in 1997.

Mr. Thomson joined a chorus Tuesday, including all three Opposition parties as well as the government lawyer who examined Mr. Mulroney, that weighed in on the finding of Mr. Justice Jeffrey Oliphant that the former prime minister "failed to disclose appropriately the facts" when he sued the government in 1995.

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The defamation lawsuit was launched over a letter the Justice Department sent to the Swiss government on behalf of the RCMP. In the letter, the Mounties accused Mr. Mulroney and airplane lobbyist Karlheinz Schreiber of defrauding the government in relation to the purchase of 34 Airbus jetliners by Air Canada.

As part of his lawsuit, Mr. Mulroney was asked in a discovery proceeding: "Did you maintain contact with Mr. Schreiber after you ceased being Prime Minister?" He replied that he had "a cup of coffee" with the lobbyist "once or twice." This was at least six years before it emerged that he had met three times with Mr. Schreiber in hotel rooms and accepted at least $225,000 in cash from the German-born middleman.

As part of a voluminous report released Monday, Judge Oliphant said Mr. Mulroney acted "inappropriately" by not disclosing the payments during his testimony, and called his explanation for not revealing the cash - that he was never asked directly about his business relationship with Mr. Schreiber - "patently absurd."

Opposition MPs took the judge's language up a notch Tuesday in the House of Commons.

"Why will the government not send a clear message? Mulroney lied and we want our money back," NDP MP Charlie Angus said during Question Period. Liberal Leader Michael Ignatieff told reporters he thought Mr. Mulroney should give the money back as "a matter of honour."

Justice Minister Rob Nicholson repeatedly said he will review Judge Oliphant's recommendations. However, the judge was never asked to comment on what steps, if any, the government should take to recover the funds.

Representatives for Mr. Mulroney did not respond to a request for comment.

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Claude-Armand Sheppard, the government lawyer who examined Mr. Mulroney as part of the 1995 lawsuit, said he was "happy" to see the judge validate his performance in the Montreal courtroom.

Mr. Mulroney's repeated explanation that he wasn't asked a direct question left the inference that "the questions I had put to him in the discovery were not sufficiently clear - basically suggesting that I hadn't done my job," Mr. Sheppard said.

As for whether the government should ask for the $2.1-million back, the Montreal lawyer declined comment.

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National reporter

Greg has been a reporter with The Globe since 2005. He has probed a wide variety of topics, including police malfeasance, corruption and international corporate bribery. He was written extensively about the Airbus affair, offshore tax evasion and, most recently, Toronto Mayor Rob Ford and his criminal ties. More

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