The Hill: Mulroney inquiry off to good start

We may finally get to know what really happened all those years ago and what those hundreds of thousands of dollars were all about.

Justice Jeffrey Oliphant of Manitoba, a serious, soft-spoken man seems determined to get to the bottom of things. He’s not a showboat either. He works methodically, politely giving each lawyer all the time he needs, and each witness enough rope to satisfy the needs of the inquiry.

Under the glass dome of the Victoria Hall in the former Ottawa City Hall, a magnificent assemblage of great legal minds has gathered before Oliphant at tens of thousands of dollars a day to sort out the reputation of one Martin Brian Mulroney.

It is an august gathering in fine suits like cardinals in conclave before an Avignon Pope in medieval times to decide the fate of one of their own.

Mulroney wanted this inquiry very badly. He said it would clear his reputation. “I will attend with bells on,” he said. The man has a way with words.

Prime Minister Stephen Harper was never keen on the inquiry. Who knows where these things can lead? But Harper could hardly refuse Mulroney, who led Harper’s transition team when he  came to power three years ago. But then the Commons ethics committee had a go at Mulroney and new evidence came out about him and his friend Karlheinz Schreiber.

Suddenly Mulroney was no way near as sure he wanted this inquiry. But it was too late. Harper tried to limit the scope. No more talking about the Airbus purchase, he said. Mulroney tried to delay the inquiry further, but Oliphant told him “no” a couple of weeks ago.

So now the inquiry is on. One thing they don’t argue about is the money. Both Mulroney and Schreiber agree that Schreiber paid hundreds of thousands of dollars in cash to Mulroney in hotel rooms in Montreal and New York. They quibble about the amount. Mulroney says $225,000; Schreiber says $300,000. Only Revenue Canada knows for sure.

What they want to establish is what the payment was for. Both agree it was for lobbying. Schreiber adds, “lobbying here in Canada.” That would have been illegal. Mulroney says no, it was overseas.

So the testimony began this week in the same hall where John Gomery did so much damage to the Liberals. He would say they did it to themselves. Same theatre, a new script, different players.
Once again, the best free show in town for those who love the law.

The first witness was Bill McKnight, Mulroney’s defence minister at the time, but he said he didn’t know very much about the military armoured vehicle Schreiber wanted to sell to Mulroney’s government and Mulroney had never talked to him about it. No lobbying there.

In fact McKnight said he didn’t  know much about the military. His expertise is in wheat and business in Saskatoon. He added that we haven’t had a defence minister who knows much about the military in 30 years.

The audience chuckled. The real surprise was Marc Lalonde, one of the most politically powerful men in Canada, the former right hand of Pierre Trudeau, who went on after politics to a great career in corporate and business law.

From October 1993 to September 1995, Lalonde worked for Schreiber and his Thyssen Industries on the Bear Head project to build light armoured vehicles somewhere in Cape Breton or Quebec. They were to be sold to the Canadian military and hopefully abroad to friendly countries.

Lalonde said he billed Schreiber at $325 an hour for a total of $55,000 over the two-year period. The project never got off the ground. The Jean Chrétien government said NO.

But during all this time, Lalonde testified that never once was there even a suggestion to him that Mulroney, a Conservative, was also being paid to lobby the newly elected Chrétien Liberal government.

Nor was there a suggestion that Mulroney was lobbying overseas on behalf of Schreiber, and especially not in China or Russia, as Mulroney claimed before the parliamentary committee.
Mulroney lobbying in China and Russia for Schreiber?

“Inconceivable!” said Lalonde. Canada didn’t allow military weapons to be sold to Communist China or Russia. And still does not. Lalonde testified Schreiber always paid Lalonde’s bills with cheques or bank draft, never in cash or without receipts, and never in secret hotel room meetings.

But not all went badly for Mulroney (who was not in the room at the time of Lalonde’s testimony). Lalonde said three things would be required for the light armoured vehicle project to go through.

First, the vehicles would have to be price competitive with other bidders. (The competition was GM in London, Ont.). Second, the Canadian government would have to buy about 200 of the vehicles. Third, there would have to be overseas sales for the project to be profitable for Thyssen Industries.

Now that’s something that Mulroney’s lawyer Guy Pratte can build upon. Just because Lalonde says he was never told that Mulroney was working overseas for Schreiber doesn’t mean that Mulroney wasn’t. There are a lot of things Schreiber has not told everybody about his business.

It will be up to Mulroney to prove his case when he appears before the inquiry later this year.This inquiry isn’t over by a long shot.

Richard Cleroux is a freelance reporter and columnist on Parliament Hill. His e-mail address is richard
[email protected].

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