CBC launching 'vendetta' in cash probe: Mulroney spokesman

The Conservative government brushed aside calls Wednesday for an inquiry into Brian Mulroney's financial affairs following publication of new details about mysterious payments to the former prime minister, who accused the CBC of engaging in a "vendetta."

Mulroney, who received $300,000 in cash from German-Canadian deal-maker Karlheinz Schreiber in 1993 and 1994, did not pay taxes on the payments in the years he received the money, the CBC and the Globe and Mail reported Wednesday.

The newspaper and CBC's The Fifth Estate reported that the former prime minister filed a voluntary tax disclosure some time later.

Mulroney has so far declined to say when he paid taxes on the cash Schreiber handed over to him. Schreiber has said previously that he paid the money to Mulroney to help him in business ventures.

'Designed to suggest illegal behaviour'

A statement Wednesday night from a Mulroney spokesman said the report was "based essentially on the unreliable and uncorroborated statements of … Schreiber."

It accused The Fifth Estate of conducting a long "vendetta" that is "designed to suggest illegal behaviour by him in relation to the Airbus matter. Despite its failure to establish such behaviour and despite the RCMP having stated — after a lengthy investigation at home and abroad — that it had no evidence to substantiate such suggestions, The Fifth Estate persists in continuing its efforts to tarnish Mr. Mulroney's name."

The statement noted that Mulroney and Schreiber are engaged in litigation over various matters and that no further comment on the specifics of Schreiber's allegations would be "appropriate."

Schreiber is fighting extradition to Germany, where he is wanted on tax evasion charges.

Calls for public probe

In the House of Commons, Liberal MP Robert Thibault accused the government of being afraid to hold a public inquiry into the matter.

Government House leader Peter Van Loan responded that taxpayers had already refunded Mulroney's legal fees after he sued the government over statements in a letter to Swiss authorities about his alleged dealings.

"If the Liberal party wants to raise them again, let them do it outside the House and this time it is the Liberal party that can pay those costs instead of the taxpayers of Canada."

New Democrat justice critic Joe Comartin said the only way to get to the bottom of the matter is a public probe. "Our recommendation is there in fact should be a public inquiry on this," he said after the Commons question period. "It's the only mechanism that I think we have available."

Issue continues to boil

Despite the settlement and an apology from the federal government, the issue has continued to boil. It was eventually disclosed that Mulroney, after he left office in 1993, accepted the $300,000 from Schreiber, who played a central role in the Airbus transactions.

Mulroney has never explained his side of the story about the payments.

Spokesmen for him have said only that he was out of public life at the time of his dealings with Schreiber, and that the money was paid in connection with private business deals, including an effort by Schreiber to set up a pasta business.

Neither Mulroney spokesman Luc Lavoie nor the former prime minister's Toronto lawyer would comment Wednesday.

Justice Department spokesman Christian Girourad said the ministry considers the file closed.

'Cataclysmic event'

The Globe reported that a letter received late Tuesday night from an intermediary of Mulroney's explained that the former prime minister was delayed in paying his taxes because of the "cataclysmic event" that disrupted his life in November 1995.

That was a reference to an RCMP letter to the government of Switzerland that falsely accused him of a crime in the purchase of Airbus planes by Air Canada.

"As such, it is understandable that until all these matters were resolved — as they eventually were with his total vindication — he could not resume normal functioning and attend to normal day-to-day affairs — and indeed to the point of the finalization of his tax matters with his accountants," the Globe quoted the letter as saying.

The newspaper said two of the cash payments given to Mulroney by Schreiber, totalling $200,000, were made in 1993. The taxes owing on those payments would have been due by May 2, 1994, 18 months before Mulroney discovered that the RCMP was investigating him.

The Globe story says the taxes owing on the final $100,000 payment from 1994 would have been due on May 1, 1995, six months before Mulroney learned of the RCMP investigation.

"He complied with all prevailing Canadian tax law and was entitled to do so in any way he chose and was to his best interest," said the letter received by the Globe. "He — like all of us — is entitled to do so."

The letter does not say when Mulroney made the voluntary tax disclosure, but it says that it is "understandable" that Mulroney could not finalize his tax matters until he was vindicated in his legal battle with the federal government and the RCMP. Mulroney didn't receive a $2.1-million settlement in the matter until January 1997.

The newspaper did not identify the Mulroney intermediary.