Schreiber dismisses Mulroney testimony

Karlheinz Schreiber said Monday that Brian Mulroney's appearance before a federal ethics committee last December was meant to mislead it with a "smoke-and-mirror show" and to avoid a public inquiry.

The German-Canadian businessman, who was testifying before the committee for a fifth time, said Mulroney was misleading when he quoted from Schreiber's past court filings during the former prime minister's Dec. 13 testimony.

Mulroney cited statements from two Schreiber affidavits from last March 3 and Nov. 7 to support his allegations that Schreiber had lied, and to support his own statements.

"He thinks he can fool you," Schreiber said. "He ignored your questions because he couldn't wait to distract and mislead you with a prepared smoke-and-mirror show."

Schreiber said Mulroney tried to "trick" committee members because he knew they didn't have the transcripts from the affidavits, which he said he has now submitted to the committee.

"It's obvious he came here with one goal: to avoid the public inquiry," Schreiber said.

The committee, which also heard Monday from former Tory cabinet minister Elmer MacKay, the father of current Defence Minister Peter MacKay, is looking into the past business relationship between Mulroney and Schreiber, including cash payments made to Mulroney by Schreiber.

Schreiber said he paid Mulroney $300,000 cash between 1993 and 1994 to lobby the Canadian government for a light-armoured vehicle plant known as the Bear Head project.

Mulroney said the cash payments totalled $225,000 and were for work he did abroad after he stepped down as prime minister.

Schreiber insisted again on Monday that the money Mulroney received was to lobby the federal government on behalf of the Bear Head project.

Mulroney website questions need for inquiry

Prime Minister Stephen Harper has signalled that he's prepared to call a public inquiry into the controversial business dealings between the two men once the ethics committee wraps up its hearings.

But Mulroney, who once said he would welcome such an inquiry and expressed confidence it would clear his name, appeared to be losing his appetite for the probe Monday.

A new posting on a website devoted to telling Mulroney's side of the story challenged Schreiber to back up his claims — and suggested if he can't, then there's no need to go any further.

"What evidence has [Schreiber] not had the opportunity to produce?" the website asked.

"And if he fails to offer such evidence, in light of the repudiation of each and every one of his previous allegations, what conceivable justification is there for a costly public inquiry?"

The all-party parliamentary committee has invited Mulroney to testify one more time, on Thursday — in effect giving him the last word before the hearings conclude. But lawyers for the former Conservative prime minister have yet to provide a definitive answer on whether he will appear.

MPs met in closed session after Schreiber's testimony Monday to consider their next step, but failed to reach agreement.

New Democrat MP Pat Martin said the committee will revisit the matter Thursday if Mulroney fails to show up.

MacKay testifies he was trying to end rift

Earlier, Elmer MacKay told committee members that he drafted a brief memo for Schreiber in an effort to get the businessman and Mulroney to make up, but that there was nothing improper about it.

"I provided a comparatively short memo, a suggested letter, which Mr. Schreiber incorporated into a much longer letter that he wrote and signed," the former cabinet minister told the committee in a video conference from Halifax.

Asked why he did it, MacKay — who is friends with both Mulroney and Schreiber — said he felt caught in the middle, receiving "incessant phone calls" from both men complaining about each other, particularly after The Fifth Estate aired a feature, in which Schreiber first described cash payments he gave to Mulroney.

"I got to the point where I wanted to see this thing come to an end, one way or the other," he said, describing that he felt like a "quidnunc, a malicious gossip."

"I thought the least I could do as a friend for both of them was suggest the obvious thing: 'How about an apology?'"

But MacKay said that, as far as he knew, there was no quid pro quo.

"The worst thing, as I see it, for anyone to do is to interfere politically when there's a matter before the courts," he said. 

The letter in question was the one Schreiber said he sent to Mulroney two years ago. Schreiber testified last year that MacKay urged him to write a letter to Mulroney to patch up their relationship so the former prime minister could raise Schreiber's extradition case with Harper.

Schreiber fighting extradition

Schreiber is out on bail while he fights extradition to Germany to face charges of fraud, tax evasion and bribery.

Schreiber claimed MacKay told him that Mulroney was scheduled to meet with Harper in the summer of 2006.

Schreiber said MacKay told him that if he wanted Mulroney to raise the issue of his extradition with Harper, he needed to make amends with Mulroney.

But Harper has said Mulroney never raised the issue with him at that meeting. Mulroney also testified last December that he didn't solicit a letter of exoneration from Schreiber through MacKay.

Monday's hearing got off to an angry start, with MacKay demanding in opening remarks that committee chairman Paul Szabo temporarily remove himself if he was to provide any testimony.

MacKay was upset by a news report that suggested he had postponed an earlier appearance before the committee so that he could "rehearse." Szabo apologized and asked Tory MP David Tilson to take over during the examination.

MacKay's comments drew an angry response from Martin, who said that many Canadians now believe there was political interference in Air Canada's deal to buy Airbus jets and with the plan to build a German armoured vehicle plant in Nova Scotia.

Martin said there were so many shady deals in the Mulroney era that he's surprised MacKay didn't wear a bag over his head out of embarrassment during that period.

A series of witnesses have given contradictory evidence to the ethics committee, and several MP committee members have agreed only a public inquiry promised by Harper has any hope of getting to the bottom of the controversy.