Conclusions and Recommendations on Airbus Libel Settlement and Related Matters Study of the Government Members of the Access to Information, Privacy and Ethics Committee

Despite our original preference for a non-partisan public inquiry, the Government members of our Committee have, nevertheless, participated faithfully in the hearings precipitated by the Opposition.  We have asked the hard questions of every witness who appeared with an eye to determining the truth of what transpired between Mr. Karlheinz Schreiber and the Right Honourable Brian Mulroney.  Canadians would expect no less of us.

Certain allegations of impropriety on the part of Mr. Mulroney were made public last November by Mr. Schreiber in a civil complaint filed before an Ontario Court.  Mr. Schreiber has since admitted that he is motivated in his actions by a desire to avoid extradition to Germany to face serious criminal charges.  In fact, Mr. Schrieber testified before us that he would even sign a false document, if that would help further his efforts to avoid deportation (Dec. 6, 2007.)

Yet, despite hearing ten full hours of personal testimony and receiving hundreds of pages of documents from Mr. Schrieber, and additionally hearing testimony from Mr. Mulroney and a number of other witnesses, no evidence of any wrong-doing on the part of Mr. Mulroney was ever produced.

Ironically, the only wrong-doing that we became aware of was on the part of Mr. Schreiber himself, who admitted to importing large quantities of cash without reporting that fact to Canadian Customs authorities.

 

Airbus Libel Case Settlement

The Opposition insisted that as part of our study we examine the Airbus Libel case settlement between Mr. Mulroney and the former Liberal Government.  As Allan Rock, Minister of Justice at the time of the settlement testified before us, the now public information about the business relationship between Mr. Mulroney and Mr. Schreiber, while it could have impacted the terms of the settlement, did not change the essential reason for the decision to settle.

Mr. Rock testified, “The advice I had from the department, with which I agreed, was that the gist of the reason we apologized to Mr. Mulroney was the language used in the letter of request, and if you read that language, you'll see it was conclusory. It asserts as a matter of fact that there was criminal activity. That's why an apology was given.”  Further, he testified, “…regarding who is responsible for the $2.1 million, the government acknowledged that the letter should not have been sent in that language. It was the language used that was the essential harm here, and it was for that reason we apologized and agreed to pay costs.”

Given that a decade-long RCMP investigation into the Airbus purchase which proceeded well past the date of the libel settlement found no evidence of criminal wrong-doing, and given the lack of any new evidence before our Committee, it must be concluded that the settlement reached with Mr. Mulroney was appropriate.

Code of Conduct

Two issues of special concern to our Committee, involving the conduct of a Public Office Holder, were raised during our study.  First, whether an agreement was reached between Mr. Schreiber and Mr. Mulroney before he left office. And, second, whether Mr. Mulroney ever lobbied the Canadian government on Mr. Schreiber’s behalf.

On the first point, Mr. Mulroney was emphatic that no agreement was ever reached at Harrington Lake on June 23, 1993, while Mr. Schreiber’s said that at the June 23 meeting they generally agreed to work together after Mr. Mulroney left office, but they did not discuss details of a contract, such as fees to be paid.  On December 4, 2007, Mr. Schreiber stated, “So it was an agreement in principal that we would work together, but on that day--it would be completely unfair for me to say anything else, and it would not be the truth--we did not speak about money.”  Mr. Schreiber produced no evidence to back up his allegation that an agreement was formalized on June 23, 1993.

On the second point, Mr. Mulroney and Mr. Schreiber both clearly testified that Mr. Mulroney never violated any of the specific clauses of the (1985) Code of Conduct for Public Office Holders.  Mr. Mulroney further testified that he was contracted to lobby internationally and a written description of their agreement, that both Mr. Doucet and Mr. Schreiber acknowledged as legitimate, supports this testimony.  Additionally, Mr. Schreiber’s testimony and on-going legal action claiming that Mr. Mulroney never did any work for him, domestically or otherwise, undermines any allegation that Mr. Mulroney lobbied the federal government in violation of the Code of Conduct.

PMO Correspondence

The Opposition asked our Committee to examine the handling of Mr. Schreiber’s correspondence by the Privy Council Office and the Prime Minister’s Office.  Although Mr. Schreiber has attempted to communicate with the Prime Minister regarding his pending extradition, our study found no evidence to contradict the Prime Minister’s statement that he has never personally communicated with Mr. Schreiber.  Indeed, under questioning Mr. Schreiber acknowledged that he has never spoken to the Prime Minister and has no evidence to suggest that the Prime Minister has ever personally seen any of his correspondence.

Questions Involving Cash Payments

While there was no evidence of wrong-doing produced for our Committee, we did hear testimony that Mr. Mulroney accepted large cash payments from Mr. Schreiber, that he did not deposit that cash in a financial institution, and that he did not report the payments as income and pay tax until approximately six years later.

Canadians were certainly left with a bad taste in their mouths when they learned a former public office holder took large cash payments. While there may have been nothing illegal about the transactions, his actions certainly created the appearance of conduct that falls below the standard we expect of former Prime Ministers, as Mr. Mulroney himself acknowledged with regret in his testimony.

A Public Inquiry

Mr. Schreiber’s allegations were the catalyst for this study and the original call for a public inquiry. And, through our months of highly publicized study, including live national television coverage, Mr. Schreiber has certainly been given the public forum he desired to air his grievances and present any evidence of wrong-doing. However, the testimony we did hear from Mr. Schreiber was often unsubstantiated, sometimes inconsistent and, by his own admission, driven by ulterior motives.

As such, it is unclear what, if any, new evidence Mr. Schreiber could provide to a public inquiry, that he has not already provided to our Committee. In fact, Mr. Schreiber testified that he has already provided our Committee with all the information he has. Our Committee was mandated, “to examine whether there were violations of ethical and code of conduct standards by any office holder.”  We did not find any ethics or code of conduct violations based on the evidence Mr. Schreiber provided.

Further, we heard no evidence of criminal wrong-doing by any public office holder.  Given that RCMP could also find no evidence of criminal wrong-doing after a lengthy, international investigation, we can see no basis for a public inquiry being mandated to examine such matters.

While a narrow ethics question may still be outstanding – whether Mr. Mulroney reached an agreement to provide services while he was still Prime Minister – we are doubtful that probing this particular question further would be in the public interest.  Even in the unlikely circumstance that new evidence was to come to light indicating there was a basis to the allegation, it is unclear what remedy could be sought.

Certainly any reform required to prevent a possible ethical breach of this particular type in the future has long since been established. Under the reforms introduced by this Government in the Accountability Act, the Code of Conduct for Public Office Holders is far more comprehensive and is now administered by an independent Ethics Commissioner rather than by the Prime Minister personally, as it was during Mr. Mulroney’s tenure.

We believe that a public inquiry, which is a process by which facts are determined, the public informed and recommendations for corrective action considered, would have been the more effective and useful forum within which to examine Mr. Schreiber’s allegations when they were first raised last Fall. However, the fact is our Committee has now completed an examination of the allegations and found no evidence of any wrong-doing by any public official.

Recommendation #1

Therefore, given:

• The lack of any evidence of wrong-doing; and,
• That it is unlikely that any substantial new evidence will be produced;

We recommend that, should the Government deem an inquiry necessary, the terms of reference for the inquiry should be restricted to examining those questions that will lead to recommendations designed to guide the decisions made by public office holders after they have left office.