Brian Mulroney's Sordid Tale

Former Prime Minister Brian Mulroney's testimony at the Oliphant Commission has made for fascinating drama, especially for lawyer-types and political junkies.

A bit of background for those readers unfamiliar with this tale. Brian Mulroney was Prime Minister of Canada from 1984 to 1993. During his time in office, he had a number of interactions and private meetings with a shady German-Canadian lobbyist, named Karlheinz Schreiber. Mr. Schreiber's occupation was to try to land Canadian government contracts for foreign companies. In particular he represented a German manufacturing company, Thyssen, which sold armoured vehicles. (Mr. Schreiber is currently facing extradiction to Germany on charges of corruption and tax evasion.)

Within months of leaving office in 1993, Mr. Mulroney met with Mr. Schreiber at 3 different times at hotels and a cafe, and on each occasion was given tens of thousands of dollars in cash, stuffed in envelopes. The total from the 3 was at least $225,000.00. Rather than depositing this significant loot in bank accounts, Mr. Mulroney put and kept the money in safety deposit boxes. He did not declare these payments as taxable income until six years later.

In 1995, the Government of Canada accused Mr. Mulroney and Mr. Schreiber of a criminal fraud involving millions of dollars. The accusation was contained in a letter written to the government of Switzerland sent to them in order to obtain Mr. Schreiber's bank records. The letter with its allegations became public, and Mr. Mulroney brought a multi-million dollar lawsuit for defamation against the Government of Canada. The allegations of criminality related to the sale of Airbus jets to Air Canada, and became known as the Airbus Affair.


In connection with the defamation action brought by Mr. Mulroney against the Canadian government relating to the Airbus Affair, Mr Mulroney was questioned under oath by the defendant government's lawyers. This was in 1996. The questioning dealt with Mr. Mulroney's relationship with Schreiber. He was asked whether after he left office Mr. Mulroney had maintained contact with Mr. Schreiber. Mr. Mulroney's answer was that they "would have a cup of coffee, I think, once or twice". There was no mention of a business relationship, of Mr. Schreiber having had allegedly retained Mulroney a month or so after he left office to lobby for him internationally, and no mention of moneys (at least $225,000 in cash) having being paid presumably for this purpose. The defamation action was settled and Mr. Mulroney was paid $2.1 million for his legal costs and given an apology.


Fast forward to the present. The Oliphant Commission was set up in 2008 to deal with a number of matters relating to the relationship that existed between Mr. Schreiber and Brian Mulroney when he was a Member of Parliament and Prime Minister of Canada. The Commissioner's mandate is to answer some questions, such as: did the two men have business dealings, did they have any agreements to do business, or were payments made, during the time Mr.Mulroney was in office? The relationship and dealings between the two men entered into both before and after Mulroney left office are within the terms of reference of the Commission. While Mulroney has denied that any agreement or arrangement between the two was made before he left office, this is a point disputed by Schreiber in his testimony.

What do I make of all of this so far? It should be noted that the inquiry has not concluded and Mr. Mulroney will be back for more questions on Tuesday.

In general terms, I, and I doubt anyone would disagree with this opinion, find Mr. Mulroney's business relationship with Mr. Schreiber scandalous. Former Prime Ministers of Canada, who are experienced in business and lawyers to boot, would not have entered into a business relationship with Karlheinz Schreiber on the terms which Mulroney described, if they would have entered into any relationship with him at all. The retainer was paid by cash in tens of one thousand dollar bills, put into envelopes which were delivered in hotels and cafes, there was no written agreement describing the purpose, duration and terms of this retainer, no bank account was set up for the deposit of the funds, and absolutely no paper records were kept. And recall that all of this allegedly only commenced just months after Mulroney left office. The only sensible conclusion one can draw is that the parties wanted this whole arrangement to be kept secret, and they tried their best to hide it. Why they wanted it so is something the Oliphant Commission might help us understand. But that they wanted it hidden seems beyond doubt.

I find Mr. Mulroney's description of how at the time of the defamation action he was being beseiged by his enemies who wanted to kill and crush him and his family, Nixonesque. Here is how he described it to the Oliphant Inquiry, in his own words:

"I know these people want to kill me..", and

"The nine lawyers sitting there, out to crush me and my family. I was fighting for my life and the honour of my family, and I was confronted by a huge government apparatus, spending unlimited money to do me in."

In Mr. Mulroney's eyes, the enemy was not only the Government of Canada but their lawyers as well. One would have thought that Mr. Mulroney, as a lawyer himself, would have been able to distinguish between the defendants who allegedly falsely defamed him, and the lawyers whom the government engaged to represent it. Absent from Mr. Mulroney's testimony was the civility and professionalism which members of the legal profession are expected to exhibit towards each other. Not only were the lawyers lumped into the group which was out to kill and crush Mulroney and his family, but the contempt he had for their abilities as lawyers was not held back. According to Mulroney, these "high priced" lawyers basically blew it. They did not even know what questions to ask, and certainly he was not going to help them figure it out. At one point, for example, he characterized their examination techniques as "disjointed".

A critical aspect of Mulroney's testimony is his firm assertion that he answered the question about whether he maintained contact with Schreiber after he left office truthfully, by simply noting that "he would have had a cup of coffee with him, I think once or twice". According to Mr. Mulroney, he was asked whether he maintained contact and not about the type or nature of the contact. The fact that the coffee get-togethers included the alleged retainer agreement and the payment of tens of thousands of dollars in cash payments, was not asked, says Mulroney, so he did not tell. The counter-argument of course is that he did not merely answer "yes" to the question, and leave it at that. If he had, I presume that the next question would have related to the nature of the contact, and Mr. Mulroney would have had to disclose more about it. Mr. Mulroney however answered with more than a "yes". He trivialized the nature of the contact by saying that it involved a get together for coffee, he thinks once or twice. This arguably implied that that was all there was to it, and forestalled any further probing by the government lawyer.

Although different in nature, that brought to my mind at least the Bill Clinton approach to answering an incriminating question. One will recall that part of Clinton's problems were caused by his stating under oath that he did not have a "sexual affair" or "sexual relations" with Monica Lewinsky. He insisted that this was true because of the way he defined these terms. Oral sex didn't count. It will be interesting to see what the Commissioner thinks of Mulroney's similarly narrow view of what was being asked of him and how he should truthfully and fully have answered it.

So that in a nutshell is our home grown scandal, currently being played out and televised live for anyone wanting to watch it. I gather from press reports that the interest is not intense and spectators are not breaking down the doors to get in. Perhaps this is because it an an old story, which has been dragging on now for years, involving a Prime Minister who has been out of office for 16 years and whom Canadians don't much like anyway. I for one find it intriguing.