Mr. Chairman, members of the House of Commons, I served as Prime Minister of Canada between 1984 and 1993.
During those years, I devoted all my energy and efforts to what I considered to be Canada's best interests.
I am proud of our record of accomplishment.
Like all leaders, however, I also knew moments of failure, sorrow and error.
My second-biggest mistake in life, for which I have no one to blame but myself, is having accepted payments in cash from Karlheinz Schreiber for a mandate he gave me after I left office. I will tell you today how that came about.
My biggest mistake in life, by far, was ever agreeing to be introduced to Karlheinz Schreiber in the first place. I will tell you today what the involvement was.
As a result, some Canadians are asking whether I was involved in improper or unethical conduct during or after my term in office. Let me say here and now, clearly and unequivocally:
First, I never received a cent from anyone for services rendered to anyone in connection with the purchase by Air Canada from Airbus of 34 aircraft in 1988.
Second, I did not receive a cent from Thyssen Industries or any other client of Mr. Schreiber while I was in office.
Third, I have never had a lawyer in Geneva, or elsewhere in Switzerland, except to defend myself against the false charges laid against me in 1995.
Fourth, I have never had a bank account in Switzerland.
Fifth, neither I nor anyone on my behalf ever asked Mr. Schreiber or his lawyer to perjure themselves or otherwise lie about the payments received from him.
Let me say here and now, clearly and unequivocally:
First, I never received a cent from anyone for services rendered to anyone in connection with the purchase by Air Canada from Airbus of 34 aircraft in 1988.
Second, I did not receive a cent from Thyssen Industries or any other client of Mr. Schreiber while I was in office.
Third, I have never had a lawyer in Geneva or elsewhere in Switzerland except to defend myself against the false charges in 1995.
I have never had a bank account in Switzerland.
Finally, neither I nor anyone on my behalf ever asked Mr. Schreiber or his lawyers to perjure themselves or otherwise lie about the payments received from him.
Mr. Chairman, let me set out a few of the facts regarding the matters you are inquiring into. Then I will be pleased to answer your questions.
Twelve years and one month ago, my family and I were hit by the biggest calamity of my life. The Canadian government sent an official letter of request for assistance to Switzerland. It said that I had accepted bribes in connection with the purchase of Airbus planes by Air Canada and that I had $5 million in a Swiss bank account as a result. The Government of Canada stated formally, to a foreign government, that I was a criminal from the time I took office.
I was completely devastated by these totally false allegations. They had the capacity to destroy my reputation and to destroy my family. We learned only later, through sworn RCMP testimony, that the police had based their statements to Switzerland largely on information gathered mainly from a member of the Canadian media who, as it turned out, was a confidential informant to the RCMP.
Because I knew that all of the charges were false, I sued the federal government for defamation and began a two-year battle to clear my name.
This was immensely painful for both me and my family. The resulting stress and anguish for all of us arising from these allegations, and the wide coverage of the matter in the media here and around the world, is almost impossible to describe. The damage caused cannot ever be measured in dollars or cents. Only a person who has gone through such an ordeal can fathom its impact. It was like a near-death experience.
On January 6, 1997, the federal government sought out my lawyers and requested a settlement.
The government issued a full apology to me and my family. In addition, they made the following statement:
Based on the evidence received today, the RCMP acknowledges that any conclusions of wrongdoing by the former Prime Minister were—and are—unjustified.
After continuing its investigation for another six years, the Commissioner of the RCMP wrote me a letter, dated April 17, 2003, in which he said:
On April 22, 2003, the RCMP will announce that after an exhaustive investigation in Canada and abroad, the remaining investigation into the 1995 allegations of wrongdoing involving MBB Helicopters, Thyssen and Airbus has concluded that the outstanding allegations cannot be substantiated, and that no charges will be laid.
On October 6, 1997, the late former Chief Justice Alan B. Gold of the Superior Court of Quebec, acting as special arbitrator, ordered the government to pay $2.1 million in legal fees and other costs.
Thi entire amount went straight to my lawyers and advisors. Contrary to the allegations of some, I never received a cent.
On October 6, 1997, the late former Chief Justice Alan B. Gold of the Quebec Superior Court, acting as special arbitrator, ordered the Government of Canada to pay $2.1 million in legal fees and other costs. This entire amount went straight to my lawyers and advisers. Contrary to the allegations of some, I never received a cent.
Mr. Chairman, by 1998, having gone through this travesty, my family and I believed that this long and painful nightmare in our lives was finally over, but here we are again, my family and I, ten years later.
I first encountered Mr. Schreiber through the political process. I knew him only as an able businessman, chairman of Thyssen in Canada, a subsidiary of a very large multinational company with some 180,000 employees. I really had no significant dealings with him until he became a strong promoter of a project in Nova Scotia that came to be known as the Bear Head project. It involved the establishment of a plant to build Thyssen light armoured vehicles. I was supportive of the project, as I believed that it was sound and would contribute to the economic development of eastern Nova Scotia, which, in light of the closures in Glace Bay and Cape Breton, desperately required jobs. But ultimately, after a detailed study by government officials, it was concluded that the direct cost to the government of $100 million was simply more than the government at that time could afford, so the cabinet later made the decision not to approve it. I was genuinely disappointed that we were unable to complete this important job-creating project in the region.
I subsequently learned that Mr. Schreiber was very upset by this decision, but he was persistent. In the early 1990s he came back to government with a modified proposal that would see the required plant being built in the east end of Montreal.
In June 1993 I was told that Mr. Schreiber wished to see me for a farewell courtesy visit, as many others had done. There was no reason to refuse the request. Accordingly, he came up to see me on June 23, 1993, not in a pre-arranged limousine, as has been reported on a television program, but in a young staffer's second-hand Jeep.
Apart from exchanging the usual pleasantries, Mr. Schreiber and I talked about the Canadian political scene, and we also discussed the reunification of Germany, a topic very close to his heart. Bear Head was mentioned. I expressed regret that we had not been able to make it happen, and wished him well. He did not ask or suggest that he wanted me to play any role whatsoever, upon my return to private life, in assisting him with any business venture of any kind, except to say that given my international background and contacts, he would like to keep in touch and perhaps call on me again some day in the future.
I can't tell you, Mr. Chairman, what was in his mind, but I can tell you that not a word--not a word--was breathed at Harrington Lake about concluding any future business arrangements with him.
Now, let me tell you of my first meeting with Mr. Schreiber where he did ask me to do some work for him. Sometime in late August 1993, after I had resumed the practice of law in Montreal, I received a call from Mr. Fred Doucet whom I knew to be acting as a representative/lobbyist for Mr. Schreiber, and for others as well, I presume, here in Ottawa. He told me of his having received a call from Mr. Schreiber asking if I would be willing to meet him to discuss my participation in an international economic mandate. There was certainly no reason to decline such a possibility. It was entirely consistent with the applicable conflict of interest guidelines. I understand that Fred Doucet conveyed my acceptance to Mr. Schreiber because eventually Mr. Doucet called back to say that Mr. Schreiber wished to meet me on August 27, at the CP Hotel at the International Airport in Mirabel, Quebec, where he had booked a room in anticipation of a flight that night to Europe.
I agreed to meet there because my family and I were living in a rented cottage at L'Estérel, less than a half hour away. I was driven by an RCMP detail to the hotel and escorted to Mr. Schreiber's room.
During our discussion, Mr. Schreiber initially expressed annoyance that the government which I had headed had not approved the Bear Head project and told me he planned to institute legal action to recover costs and damages. He left me with a copy of the lawsuit. I told him he was free to take whatever course of action he chose.
He then indicated that it would be very helpful to Thyssen to have a former prime minister assist in the international promotion of their peacekeeping vehicles and he gave me a copy of merchandising documents regarding the vehicle. He said he would like to retain me for this international representation.
When I indicated that this kind of global activity was something I thought I could usefully do, provided that none of the activity would relate to domestic Canadian representation, he produced a legal-sized envelope and handed it to me.
At that point, Mr. Schreiber said, “This is the first retainer payment.” He told me there would be a total of three payments for three years. When I hesitated, he said, “I'm an international businessman and I only deal in cash. This is the way I do business.”
When I look back on it today, I realize I made a serious error of judgment in receiving a payment in cash for this assignment, even though it was decidedly not illegal to do so. That mistake in judgment was mine alone. I apologize, and I accept full responsibility for it.
When I look back on it today, I realize I made a serious error of judgment in receiving a payment in cash for this assignment, even though it was decidedly not illegal to do so.
That mistake in judgment was mine alone. I apologize and accept full responsibility for it.
Mr. Schreiber recently acknowledged in the media that the cash payment was “a way of putting some distance between myself and the former prime minister”. Then he said: “Do you think Mr. Mulroney would have wanted to receive a cheque with my signature on it?”
The answer to his question is a resounding yes. Had he offered to pay by cheque, of course I would have accepted it. As I have said, he was known to me at that time only as a successful businessman, and naturally I would have preferred payment that way.
The truth is that I should have declined the offer. I should have insisted that payment be in a more transparent or accountable manner. By not doing so, I inadvertently created an impression of impropriety that I hope will not reflect adversely on the high office I was privileged to hold.
When I left office after a decade of public service in Ottawa, I experienced the same uncertainty that confronts many former parliamentarians as they return to private life. But I thought my prospects were good. The economic opportunity presented to me by Mr. Schreiber seemed a good one, and one I could handle well, given the international dimension of the requirements.
After accepting the international payment on the retainer, and during the time that two subsequent payments were made, I made trips to China, Russia, Europe, and throughout the United States of America, where I met with government and industry leaders and explored with them the prospects for this peacekeeping vehicle, either for their national needs or for use in international peacekeeping initiatives, either under their sponsorship or under the sponsorship of the United Nations.
About two years after this agreement—which Mr. Schreiber himself has characterized as perfectly legal in all respects, as I have already noted—my world almost ended with the publication of the false and defamatory letter to Switzerland by the Government of Canada on the Airbus matter. I was paralyzed with anxiety and incomprehension when it hit, as I struggled to understand the nature of this unfolding catastrophe and to reassure family, friends, and country that I was fully innocent.
As Mr. Schreiber was also accused in the same letter to the Swiss, obviously all of my retainer work came to an abrupt and immediate halt. I had only used the retainer for the expenses I had incurred promoting Mr. Schreiber's interests as I travelled internationally.
In August 1999, Mr. Schreiber was arrested in Toronto under an international warrant and charged in Germany with corruption, fraud, bribery, and income tax evasion. Although, Mr. Chairman, I had learned four years earlier to be highly skeptical of some charges made by governments against private citizens, this stunning new development put in serious doubt my relationship with him. I thought the best way to deal with this situation was to declare the entire amount as income, although I had only used it for expenses—absorbing the expenses myself and compensating myself for the fees to which I was entitled.
Accordingly, I then instructed my advisers to contact the income tax authorities and to ensure that the full amount received in this private transaction was declared by me as income and all applicable taxes paid.
Now, as you may know, Mr. Chairman, at this moment in Toronto, Mr. Schreiber and I are in litigation over the value of services rendered. That dispute will be decided in court.
There is another matter that has led to some confusion in the media regarding the relationship I had with Mr. Schreiber and which I should like to bring to the attention of the committee so that any possible misperception is avoided.
In my defamation lawsuit arising from the Airbus allegations, government attorneys asked to examine me on discovery before plea in April 1996. In Quebec, the law is crystal clear that a defendant who chooses to do this before filing his defence can only ask questions relevant to the allegation contained in the statement of claim. The claim I had made against the Government of Canada was confined to the defamatory nature of the statements they had made, namely, the allegations that I had received bribes during my time as Prime Minister, notably in relation to Airbus.
That was the legal background to my appearance in the Montreal court house. When I took the stand that morning, the Government of Canada was represented by no less than nine lawyers.
After only one and a half days of the scheduled two-day hearing, the nine government attorneys said they had no further questions and the examination was adjourned. They never once asked me directly if I had entered into a commercial relationship with Mr. Schreiber after leaving office.
Much has been made in the media of an alleged statement by me that “I never had dealings with Mr. Schreiber” as amounting to a denial of the business dealings I had with him after I had left public life. This report of my testimony is clearly false, as even Mr. Schreiber himself made absolutely clear last week.
But although the charge has been resuscitated lately, it had been corrected earlier this year by both the National Post and The Globe and Mail, which published apologies and/or clarifications for having repeated this libel. For example, I quote from the National Post:
In the column...some of the testimony of former prime minister Brian Mulroney in his libel action against the government of Canada in 1996 was quoted. The column did not set the full context of a quote from the transcript where Mr. Mulroney said he had not had dealings with Karlheinz Schreiber. The column did not report that Mr. Mulroney was answering a question about the purchase by the federal government of the Airbus product and stated that he had no dealings with Mr. Schreiber in that context.
Any reasonable reading of my testimony indicates that when I used the language “I had never had any dealings with Mr. Schreiber”, I was clearly referring to the sale of Airbus aircraft and my time in government.
In a final word, members of the committee, I ask you to take a minute to consider how you and your families would feel if you were wrongly accused.
Last week a fine young parliamentarian had his reputation assaulted when a fellow MP made damaging and false allegations about him in the House of Commons. Within minutes this story was across the country, particularly in British Columbia, where he lives, works, and represents a constituency in this House of Commons. His reputation was damaged, his credibility affected, and his integrity challenged. As Edward R. Murrow once said, “A lie can make its way around the world before the truth has a chance to put on its pants in the morning.” Fortunately, the errant MP soon apologized and withdrew the false accusation, but the damage was done.
What happens to you and your family if there is no prompt withdrawal and you are forced to fight on, frequently for years and at enormous emotional and financial cost, to defend yourself and your family against this false accusation? What happens to you and your kids?
Twelve years ago my reputation, legacy, and family honour were almost destroyed on the basis of false information conveyed to the Swiss government. As noted, the individual largely at the source of this enormous travesty was a member of the Canadian media who was also, as it turned out, an RCMP police informant with a huge axe to grind.
Since November, I have again been smeared and dragged through the mud as a result of an affidavit filed in court by Mr. Schreiber. Every single relevant allegation made by Mr. Schreiber about me in that document is completely false.
So, Mr. Chairman, now we know why I am here today: because of an error in judgment I made 15 years ago while I was in the private sector, out of office, but principally because Karlheinz Schreiber, as you saw last week and again this week, will say anything, sign anything, and do anything to avoid extradition.
Thank you, sir.
