Schreiber to be released during extradition fight

The Ontario Court of Appeal ruledThursday that Karlheinz Schreiber will not have to stay in jail while his lengthy fight continues against extradition to Germany to face tax evasion, fraud and bribery charges.

Schreiber had beenreleased on $1.3 million bail until Jan. 31, when he was sent to jail pending a Supreme Court of Canada decision. The Supreme Court ruled the next day that it would not hearhis appeal.

The court ruled Schreiber is not likely to commit other offences while out on bail, so there is no reason to keep him in jail, despite the "snail's pace" at which the case is moving.

Schreiber was arrested more than seven years ago. He is a lobbyist, consultant and deal-maker in the sale of helicopters, Airbus aircraft and armaments.

In 2004, Canada ordered him extradited to Germany, which alleges he avoided income tax on $46 million in secret commissions for brokering various transactions.

The German charges stem from a deal for the sale of German army tanks from arms manufacturer Thyssen AG to Saudi Arabia. German authorities allege that Saudi Arabia was defrauded in the course of that deal.

Schreiber denies the charges.

In releasing Schreiber, the Appeal Court set May 4 as the date for a judicial review of the extradition decision.

The defence will argue that Schreiber cannot receive a fair trial in Germany because of reported prejudicial comments made by a court spokespersonlast March.

The court spokesperson, a judge, reportedly referred to Schreiber as having "caused damage to Germany."

Schreiber's notoriety in Canada took off amid allegations of illegal payments in connection with the 1988 purchase of 34 Airbus jetliners by then Crown-owned Air Canada. No charges were ever laid.

It was later learned that Schreiber paid former prime minister Brian Mulroney — now an adviser to Stephen Harper's government — $300,000 in a series of installments beginning in 1993, shortly after Mulroney left office.

A Mulroney spokesman said the money was compensation for help in promoting Schreiber's pasta business, as well as arranging introductions and meetings with international executives.

But Schreiber told CBC's The Fifth Estate that he gave Mulroney the money to help him ease back into private life.

Mulroney was strapped for cash at the time, Schreiber told The Fifth Estate's Linden MacIntyre.