Harper Sets Stage for Public Inquiry into Mulroney-Schreiber Controversy

By Bruce Cheadle, THE CANADIAN PRESS

OTTAWA – Prime Minister Stephen Harper invited months of lurid headlines Tuesday when he bowed to public pressure and set the stage for a public inquiry into the Mulroney-Schreiber affair.

The announcement came less than 24 hours after Brian Mulroney, the former Conservative prime minister, had joined the chorus of calls demanding a full inquiry to clear the air.

It’s the second reversal for Harper in just over five days, having initially dismissed the notion of an inquiry as the stuff of partisan vendettas, then announcing he’d have an independent third party advise him on how to proceed.

That as-yet unnamed third party was given new marching orders by Harper on Tuesday.

The prime minister told the House of Commons he’s asked the individual, “who we will be naming very shortly, to provide us with the terms of reference for a full public inquiry as well as any other course of action that independent party deems appropriate.”

The RCMP didn’t wait on one possible course of action. It said Tuesday it is examining the latest sworn affidavit from German-Canadian businessman Karlheinz Schreiber to determine whether a criminal investigation should be reopened.

Mulroney, a valued adviser to Harper and the elder statesman of the federal Conservative revival, is at the centre of a decade-old controversy that suddenly threatens to besmirch the new party’s carefully cultivated aura of integrity and accountability.

The political tempest puts the Tory minority on the defensive after weeks this autumn spent pummelling the hapless Liberal opposition.

Schreiber, an international arms dealer, lobbyist and entrepreneur, faces immediate extradition to Germany on fraud, bribery and tax evasion charges.

He now alleges that he paid Mulroney $300,000 in cash in a business deal that was finalized while Mulroney was still prime minister. The first cash instalment, paid in 1993, came while Mulroney was still an MP.

Schreiber also claims Mulroney subsequently asked him to cover up their business arrangement.

Mulroney won a $2.1-million settlement from the Liberal government in 1997 after claiming he’d been defamed by an RCMP investigation into alleged kickbacks by Schreiber for sales of aircraft to the then Crown-owned Air Canada.

Opposition MPs claim that in light of Schreiber’s new allegations – unproven and untested in a court of law – that settlement for Mulroney should be revisited.

And they claim Harper’s Conservative government was informed by Schreiber of the events seven months ago and decided not to act.

Liberal MP Mark Holland, speaking in the Commons, said the paper trail of Schreiber’s correspondence “will either prove the gross incompetence and negligence of the Prime Minister’s Office, or that there was a coverup, a deliberate attempt to mislead Canadians, a choice to protect Mr. Mulroney rather than to see justice served.”

Michel Guimond of the Bloc Quebecois questioned whether Schreiber or Mulroney had ever funded Harper’s past leadership campaigns, prompting guffaws and eye-rolling from the Conservative benches.

Indeed, the combined opposition was so intent on tarring Harper’s government with the Mulroney saga that three consecutive leaders – Liberal Stephane Dion, the Bloc’s Gilles Duceppe and Jack Layton of the NDP – all continued demanding a public inquiry even after Harper had announced his intention to hold one.

Even the promise of an inquiry held real political and legal repercussions.

Justice Minister Rob Nicholson, in a pattern that’s likely to be repeated often in coming weeks, dodged several questions in the Commons by citing the pending inquiry.

“What we will find is that it will be a true fact-finding mission and not a witch-hunt,” said Nicholson.

And Harper sounded another likely Tory theme when he described the controversy as old news that culminated under a previous Liberal government.

“The events we are talking about did occur somewhere in the neighbourhood of 15 to 20 years ago and involved a settlement signed by the previous government 10 years ago,” Harper said in the Commons.

More immediate is Schreiber’s extradition hearing, set for Thursday in Toronto where he awaits deportation in a detention centre.

The Conservatives refused to comment on what the inquiry announcement means for Schreiber’s immediate extradition, but both New Democrats and Liberals said he must be kept in the country.

“It’s not my place to defend him or to accuse him of anything,” said Liberal MP Robert Thibault, who revealed Tuesday he’s been talking to Schreiber since last spring.

“But I don’t see how you could possibly have a full inquiry without the full participation of Mr. Schreiber and I don’t know of any other way to do that than to have him on Canadian soil.”

Schreiber, who has managed to forestall his extradition for the better part of a decade, claims to have more damning evidence that he’ll trickle out in coming days to keep the pot boiling.

The entire imbroglio now falls into the capital’s constantly shifting election timing rubric.

New Democrat MP Pat Martin, whose party said it was anxious to bring down the Harper minority just a fortnight ago, warned Tuesday that Harper must not engineer a federal vote before the promised inquiry wraps up.

“We don’t know when the next federal election’s going to be but we don’t want Mr. Harper triggering one deliberately to avoid the outcome of this public inquiry,” Martin said outside the Commons.

“There’s a big waiting game that’s going to start as of today.”