Wednesday, August 25, 2010

The Truth Doesn't Always Show Up

I recently read Harvey Cashore's book The Truth Shows Up, and was fascinated by the amount of attention he'd given the story of Karlheinz Schreiber and Brian Mulroney. So when I came across the Executive Summary of the Oliphant Report (the handier version of Commission of Inquiry into Certain Allegations Respecting Business and Financial Dealings Between Karlheinz Schreiber and the Right Honourable Brian Mulroney: Report Volume 1: Executive Summary (opens a pdf of the executive summary)) I had a little bit of background to make some sense of the book.
    Back in the day, Airbus Industries was desperately trying to break into national markets held almost exclusively by Boeing Aerospace, and one of those markets was Canada. Specifically, Airbus wanted a chance to provide AC with the new aircraft it required. This would give them some legitimacy in the North American marketplace. In order to get to Air Canada, Airbus first cut a deal with Max Ward's Ward-Air. Max Ward wouldn't have purchased the aircraft on offer from Airbus, but for a sweetheart of a deal they offered him, making it impossible to turn down. This led to Airbus being able to approach Air Canada and pursue a deal. Air Canada ended up buying from Airbus a number of unsuitable aircraft, which were eventually sold to the Canadian military who neither needed nor wanted them, but the deal allowed AC to get out with a minimum of financial loss. But the poor old Canadian taxpayer ended up being stuck with the bill, as usual. And Airbus, having broken into the market, has since gone on to great success.
    In order to cut the deal, Airbus relied on Karlheinz Schreiber, who developed significant relations with members of the Conservative Party establishment in Alberta and, ultimately, across Canada. Schreiber dispensed large amounts of cash to various and sundry war-chests (both to individuals and to the parties) in order to curry influence and favour. And it worked. Eventually he became tight with the lawyer from Baie-Comeau; Brian Mulroney.
    During Brian's rise to power, it was reported by various sources that his win against Joe Clark at the PC leadership convention in 1983 had been managed by flying and/or busing in large numbers of "instant delegates"; people who had never been members of the Progressive Conservatives, but had their memberships paid for just in time for them to vote at the convention. Karlheinz Schreiber has since claimed  that it was his $50,000 contribution that paid for those" instant delegates" and their transportation to Winnipeg. Whether this happened or not has never really been investigated (Clark actually came out against anyone following up on these reports, feeling, I would suppose, that confirming the rumours would tar the Progressive Conservative Party as a very sleazy operation). Oliphant, in the Report, actually addresses this story, remarking that he was "struck by [Schreiber's] proclivity for exaggeration as he described the nature of his relationships with people, particularly those in positions of influence and power. Furthermore, with respect to Mr Schreiber's testimony regarding the leadership review, there is no evidence on which I was able to rely to support this testimony. Because his evidence is self-contradictory, I found Mr. Schreiber's evidence respecting the leadership review to be unreliable." (page 8, Report). Mr. Cashore, in The Truth Shows Up, suggests that there might be a bit more to this story, and at the very least it should be pursued. After all, the suggestion that a foreign national (as Mr. Schreiber was) may have influenced the outcome of the Canadian political process might be something to look into. But I do understand the reluctance of the Canadian political establishment to pursue the issue, as it might actually expose the tremendous influence wielded by the US political right since, well, forever, but particularly the last thirty or so years. In particular, the seed capital for the Alberta (later Western) Report and the impetus behind the birth of the Reform Party.
    But even more interesting is Oliphant's commentary on the source of the $1000 bills Schreiber passed to Brian Mulroney on three separate occasions.
    The issue of where the money came from is important. Airbus has acknowledged that they did use schmiergeld (slush or bribe monies) when dealing with foreign governments around the time of the sale of aircraft to Air Canada. There still remain questions around the AC sale--was anyone paid off, if so, how much, and who received the schmiergeld. This is the question that has been haunting Brian Mulroney since his time in office. Did a sitting Prime Minister take a bribe from a sleazy representative of a foreign firm--something we might expect from a banana republic, but surely not in a nice developed-world liberal democracy like our own.
    Both Mulroney and Schreiber agree that yes, Brian was paid significant cash money to do something. But they don't agree on how much or just what services were rendered for the money. Both agree that Brian was doing work hyping the "Bear Head" project for Thyssen (a German arms manufacturer looking to establish a manufacturing facility in Canada in order to be able to export weapons to countries off-limits to German based companies). But it is clear in the Oliphant Report that Brian did nothing on the Bear Head file to earn somewhere between $225,000 and $300,000.
    Oliphant's Report agrees that Mulroney was paid out of an account coded "Britan," but is very clear that it is impossible for this account to have funds from Thyssen in it. Rather, the Report concludes that the "funds that made up the Britan account can be traced back to commission payments made to IAL by Airbus Industries in connection with sales of aircraft to Air Canada." (page 23, Report) Harvey Cashore's book on the topic delves a lot deeper into the question of Schreiber's accounts and the source of the funds in them--and where those funds eventually went. Such as how much went to Frank Moores and Mulroney confidant Fred Doucet as well as to Brian.
    But Oliphant could not pursue the question of Airbus during the Inquiry. The mandate of the Inquiry made it clear that Airbus was off the table, so seeing Brian paid out of the "Britan" account, and clear evidence from the forensic accountants that the money in the "Britan" account came from Airbus made no never mind. Oliphant couldn't pursue the question.
    But what does it matter anyway? In Germany, very connected and powerful people have ended up in jail over Airbus' actions. In Canada, a former Prime Minister has had his reputation tarnished (and honestly, could it be any blacker than it already was?). And as far as the public is concerned, the story is about over. We paid Lyin' Brian just over two million dollars for damage done to his reputation--even though he's admitted that he did take money from Schreiber after all. Questions of undue influence in Canadian politics by foreign nationals have been tabled. And whether government officials were bribed or not are to be ignored. the status quo, after all, is sacrosanct in Canada.

Commission of Inquiry into Certain Allegations Respecting Business and Financial Dealings Between Karlheinz Schreiber and the Right Honourable Brian Mulroney: Report Volume 1: Executive Summary
The Honourable Jeffery J. Oliphant: © Minister of Public Works and Government Services Canada 2010

The truth shows up : a reporter's fifteen-year odyssey on the trail of Brian Mulroney and Karlheinz Schreiber
Harvey Cashore Toronto : Key Porter Books, ©2010.

No comments: