Follow the Airbus money, former Mulroney aide tells committee
Tuesday, February 05, 2008
Jack Aubry, Canwest News Service
OTTAWA - The parliamentary committee looking into dealings between former prime minister Brian Mulroney and lobbyist Karlheinz Schreiber should fully probe the $10 million in commissions paid for the 1988 Airbus deal and the government should "cut a deal" with Schreiber, a former Mulroney aide says.
Norman Spector, who served as Mulroney's chief of staff in the early 1990s, told the Commons ethics committee Tuesday that justice officials should negotiate an agreement with Schreiber, who is being extradited to Germany, in return for information, including documents, on the secret commissions.
Encouraging the committee to dig into the commissions, Spector said as part of the deal, it may require allowing Schreiber to stay in Canada. "Offer Mr. Schreiber a deal to spill the beans."
Spector criticized the public inquiry proposed by Prime Minister Stephen Harper for having too narrow a mandate.
"I have grave doubts that Mr. Harper wants Airbus answers and I also doubt that the public inquiry will uncover where 10 million in Schreiber-geld ended up," he said. The payment of $10 million in commissions in Canada was revealed during the trials of officials in Germany in the early 2000s.
He told the committee that lobbyist Fred Doucet, who was working for arms dealer Schreiber, had "extraordinary" access to the Prime Minister's Office, bringing visitors to meet Mulroney in his office, although the meetings were kept out of schedules. Spector said he only learned of the meetings by accident.
Spector also told the committee that he had learned that the RCMP_did not know about Schreiber's cash payments to Mulroney - Schreiber says he paid him $300,000 while Mulroney says he received $225,000 - when it ended their investigation in early 2003 into the Airbus deal.
He told the committee Tuesday that Canadians "are very skeptical about the RCMP" and investigators should be called to explain their incomplete investigation. Last fall, the RCMP_said it knew about the payments to Mulroney before it became public in the fall of 2003.
"I don't believe them. I think the RCMP is part of this problem," said Spector.
The combative retired bureaucrat, who made critical comments about the media, the RCMP and lobbying industry in Ottawa during his appearance, said he had no knowledge or evidence of any wrongdoing in Airbus or the so-called Bearhead project that Schreiber was promoting.
Later, former justice minister Allan Rock, who approved a $2.1-million lawsuit settlement for Mulroney in 1997, said he would not have signed off on the deal if he had known about Schreiber's cash payments to Mulroney. He said knowledge of the cash payments would have had "a profound effect" on negotiations for the settlement.
"We accepted his answer when Mr. Mulroney said he had no dealings with Mr. Schreiber. As a former prime minister, we assumed he answered the question properly," recalled Rock. He reminded the committee that the signed settlement included acknowledgment by Mulroney that the Airbus investigation had not been politically motivated by the Liberal government.
Spector also provided the committee with a stack of documents in relation to the reimbursement by the Progressive Conservative party for Mulroney's expenses as party leader, estimated at $5,000 a month, which was paid in cash or by cheque through the chief of staff. And he also produced documents showing payment of $100,000 to Mulroney for expenses between October 1986 and June 1987.
Spector also told the committee that Mulroney had "an expensive lifestyle" which perhaps explained why he catered to wealthy, connected people while in office. But he said there was nothing wrong with Mulroney's expenses arrangement with his party and he had previously seen similar arrangements for the premiers of Ontario and British Columbia.
A few hours before Spector's appearance, and in obvious anticipation of his testimony, Mulroney publicly released documents on a website (http://mulroneymediaroom.com/) relating to the management of expenses of the PMO during his tenure.
But the pre-emptive strike by the Mulroney camp may have been an overreaction to Spector's testimony. It included examples of invoices, correspondence and a contract between the former prime minister and David Angus, now a Mulroney-appointed senator, who was responsible for Progressive Conservative party funds at the time.
As well, an open letter was released from four other former chiefs of staff to Mulroney - Bernard Roy, Derek Burney, Stanley Hartt and Hugh Segal - slamming Spector for his testimony about the party's payment of personal expenses.
"In our experience, there was nothing untoward or sensational about the practice followed. The process was straightforward," said the letter.
One of the documents provided by the Mulroney camp is a letter written by Marilyn Burke, a former assistant in Mulroney's PMO, disclosing that Spector had obtained a photocopy of a file containing records of household expenses for the official residence submitted by Mulroney's wife, Mila, and reimbursed by the Progressive Conservative party.
Burke wrote that she was troubled by Spector's "unusual" request to photocopy the file without the authorization of Mulroney. She wrote that Segal, who followed Spector as chief of staff, advised her later that he had since spoken to his predecessor about the matter and "retrieved the file from Mr. Spector."
Spector had hinted in a column in the Le Devoir newspaper that his testimony would provide new revelations about the former prime minister's dealings while in the PMO but, once he arrived, he lectured the committee that apart from the document on $100,000 in expenses, he had nothing new to provide the committee.
He warned them not to get distracted about the PC party's payment of expenses, scolding the committee for calling Mulroney's former chef, Francois Martin, to testify later.
The committee is inviting Mulroney and Schreiber, who is wanted in Germany on fraud and other criminal charges, to appear again at the end of the hearings this month but Mulroney's lawyers have raised questions about its work and whether he will choose to return.
Schreiber wrote the committee this week saying Mulroney's testimony at the committee on Dec. 13 revealed to him for the first time that the former prime minister had promoted the sale of armoured vehicles to "Communist countries like Russia and China".
"With his unauthorized activities, Brian Mulroney put himself into the category of an illegal arms dealer and a crook," wrote Schreiber to the committee. He also attacked Justice Minister Rob Nicholson for "the desperate illegal and criminal efforts" to extradite him to Germany.