Thursday, December 13, 2007

He Said He Said

According to Brian Mulroney, it has all come down to who we believe: arms dealer Karlheinz Schreiber or former Prime Minister Brian Mulroney. In the past Mulroney has won the day because the credibility of the prime minister trumps just about anyone else, and especially trumps a shady character like Schreiber. I don't think any Canadians have illusions about Schreiber: he has lied, influence-peddled and made millions in shady dealings.

But in a recent poll, Canadians said overwhelmingly that they trust Schreiber more than they trust Mulroney. I agree with that.

Furthermore, there are other people who can testify to some of these points. So far the other insiders who we know of who are still alive (Elmer MacKay and Fred Doucet) have as little credibility as Schreiber and Mulroney. But a well-mandated inquiry could find other witnesses and get to the bottom of these issues, and that's what we need.

In Mulroney's testimony this morning, what I saw was a lot of legal research that was aimed at explaining away every issue that might implicate Mulroney. Craftily, he admitted to a minor "error of judgement", which was to accept the money in cash. To every other allegation, he has an answer that he thinks clears him. Here are the main points:

Did Schreiber lie repeatedly about these matters
Mulroney cited numerous cases where Schreiber contradicted himself.
>> For a long time, Schreiber tried to hide his secret payments to Mulroney, as did Mulroney. Both of them lied. Now Schreiber is fessing up. He may still be lying; so may Mulroney. I didn't find Mulroney's long-winded reading of contradictary evidence to be convincing one way or the other.

Why he dealt with Schreiber
He said that in 1993 Schreiber was known as a legitimate businessman, the president of Thyssen Canada with 3,000 employees under him. Mulroney said he had no idea that Schreiber was shady until 1999.
>> By 1993, was it widely known that Schreiber was involved in the Airbus influence peddling? I think so. This would all be in the public record.

He only took the money in cash, he said, because Schreiber said that he liked to deal in cash.
>> I think it is clearly in the public record that Mulroney likes to deal in cash. Lots of people could attest to this. This was not his first thousand dollar bill.

Why he didn't pay taxes on the money
He says the three cash payments were a retainer and/or for his expenses. Retainers are not taxable until they are invoiced. "Expenses are not taxable until the money is spent and the bill is sent."
>> This is preposterous. It seems clear that Mulroney was trying to avoid paying taxes on the cash. He only paid when it became public that he received the money. However, he has covered himself by the way he paid the taxes.
>> He may have paid insufficient tax, as he claims he got $225K and Schreiber says he gave him $300K.

Why he didn't pay GST on the money
>> As far as I could tell, he fudged this question. It sounds like he owes GST to the government.

What he did with the cash in NYC
He says he put it in a safety deposit box. This answers two problems: That he previously said he had no bank accounts outside of Canada; and that it's illegal to move that much cash outside of the US without a permit. He says he then spent the money in the US.

Why Schreiber gave him money
He claims he didn't do any work for Schreiber that broke ethics guidelines: it was all for international work. Thinking ahead to the civil suit that Schreiber has against him for not fulfilling the terms of the agreement, he said that he did good work for Schreiber and gave him a full report.
>> More to follow once we see the report. If this is true, why the secrecy? Why the other explanations for what he was doing (1-nothing; 2-pasta)?

Where the money came from
When asked about the source of the cash (Schreiber has said it was from a $4 million success fee paid by Thyssen when Mulroney's ministers signed a memorandum of agreement to look into supporting the Bear Head project), he said he had no idea.
>> This one is tricky. It is pretty important that Mulroney took money from the Thyssen success fee paid because his government wrote a memorandum of agreement on the Bear Head project. It supports the theory that, as Pat Martin put it, GCI was a piggy-bank for kickbacks to Mulroney. On the other hand, unless someone says that Mulroney knew where the money came from, I'm not sure where to go with this.

The bank account code name Britan refers to Brian
Mulroney says Schreiber's lawyer Eddie Greenspan wrote a letter to the Fifth Estate saying this was not so. (No mention of other accounts being named Maxwell for Max and Frankfurt for Frank Moores.)
>> This one is important because the bank account Britan supports Schreiber's testimony and contradicts Mulroney's. Mulroney said that when he met Schreiber on June 23, 1993, while he was still PM, there was no discussion of anything that would involve remuneration. But there is independent verification (from the bank) that Schreiber set up this account shortly after June 23, which supports his story.

Why there are questions around Mulroney's credibility
It's all Stevie Cameron's fault.
>> This strikes me as typical Mulroney misdirection by maligning someone else. There were tons of questions about Mulroney before Stevie Cameron started writing about him.

Whether he ever took other cash payments
He said he absolutely did not. This runs counter to dozens of sources who describe his predilection for cash, including paying $1 million in cash for renovations on his house in 1993.
>> We need a forensic accountant to examine the expenditures and income of Mulroney. I don't think it will take long to realize that there was a whole lot more expenditure than there was income. I don't think it will take long to prove that the Mulroneys dealt in huge quantities of cash. The forensic accountant could look at things like the inventories kept by the companies that moved the Mulroney possessions out of 24 Sussex. They would also need to talk to the men who funnelled Progressive Conservative supporter cash to Mulroney while he was PM.

Whether he influenced the purchase of Airbus and/or took money for it
Mulroney said that the RCMP fully investigated the matter and cleared him completely.
>> This is extremely disingenuous. Mulroney interfered in the RCMP investigation by launching a defamation suit against the government when the RCMP tried to get information about the Britan bank account - the account that Mulroney did indeed get money from. It is by no means clear that Mulroney had nothing to do with the Airbus purchase. He fired the Air Canada board of directors and appointed his own men before the board voted on Airbus. One of the directors who he appointed was Frank Moores, who was a lobbyist for Airbus. We know that Airbus gave at least $10 million in kickbacks to Canadians. The smoking gun is there. All that's missing is a secret bank account or other proof that Mulroney got the kickback. As to why we can't find that, see my earlier post How it might have gone down.

I never had dealings with that man
Why he claimed under oath that he had had no dealings with Schreiber
In his defamation case, for which he got $2.1 million, Mulroney said he had never had any dealings with Schreiber. Now he says that he thought the question was about Airbus.
>> The lawyers need to work this out. It sounds to me like he was lying under oath, but it's a legal matter.

Why Schreiber is accusing him of wrongdoing
Mulroney says it is all to avoid extradition to Germany.
>> I agree completely. However, that doesn't mean it's not true. Schreiber has a chip to play, which is his relationship with Brian Mulroney.

I find watching Brian Mulroney difficult, and always have. Pat Martin summed it up this morning, when he said something to the effect of: "I'm not calling you a liar, but I don't want anyone here to think I believe you." My feelings are stronger. I find his indignant, self-righteous, sanctimonious, injured, belligerant tone to be false and manipulative. The days when his word is sufficient are over. We need a broad-based public inquiry that includes a forensic accountant to examine Mulroney's finances.



Anonymous said...

This man is playing us all for fools and the biggest fools (ie the media) all falling for this trap.
Mulroney has been fed these outlandish responses by his lawyers to work around the laws of the land.

Anonymous said...

This morning Kaplan made the first sensible comment about this mess "Make a deal with Schreiber". Presumably this is what KHS is angeling for and will probably get.

It is true that he is blackmailing B.M. My theory is that Mulroney is succumbing to the blackmail by giving Schreiber this chance to strike a deal, in order to avoid the more damning revelations that he probably could make.

Presumably a fall guy has been selected to give the Schreiber deal some traction. Mooers? Doucet?

Let us note that Schreiber has been very careful to protect Mulroney from the real hit: Airbus.

If he was just stalling for time, and not anticipating a deal he would sew a lot more confusion.

I am not so sure that the two protagonists are not talking. Albeit with considerable discomfort on Brian's part.