Mulroney Fights Back Over Airbus

As usual, Brian Mulroney was dressed for the occasion, impeccably suited in sober, even prime ministerial, blue.

Mulroney Fights Back Over Airbus

As usual, Brian Mulroney was dressed for the occasion, impeccably suited in sober, even prime ministerial, blue. He arrived promptly on time for his rendezvous with history, managing to summon broad smiles as he laughed and joked his way through an unruly mob of media jammed into a narrow corridor on the 16th floor of Montreal's Palais de Justice. But the good cheer soon vanished once the unprecedented proceedings began before an overflow crowd inside a cramped, windowless courtroom high above the city. "I am going to fight for my honor and my reputation, and the only way I can do that is right here in this court," he vowed. And for two days last week, that is precisely what he did, leaping at every possible opportunity to mount an emotional defense against allegations of bribery and corruption in the 1988 Airbus sale. "When you are accused of something like this, in the middle of the night, by people unknown to you, it reeks of fascism," Mulroney declared. "The government has accused me, convicted me, sentenced me. This is not supposed to take place in Canada."

The former prime minister unleashed his attack as he appeared at pretrial hearings in the $50-million libel action he launched last November against the federal government. On several counts, it was an epochal event, belied by the spare and simple setting where it transpired. Never before in Canadian history has a past prime minister testified under oath in a judicial proceeding against his own country's government, much less in a legal action mounted to refute allegations that he had participated in a fraud against the government he once headed. It also marked the first time that Mulroney has spoken publicly about his role in the murky affair that began last September, when the federal justice department and RCMP investigators tied his name to more than $5 million in purported kickbacks from the $1.8-billion sale in 1988 of 34 Airbus A320 passenger jets to Air Canada. The allegations were contained in a confidential letter the justice department sent to Swiss authorities last Sept. 29, seeking access to numbered bank accounts in Zurich through which the RCMP suspected the kickbacks had been funnelled to Mulroney and two alleged co-conspirators - former Newfoundland premier and Ottawa lobbyist Frank Moores and German-Canadian businessman Karlheinz Schreiber. Like Mulroney, both Moores and Schreiber have filed lawsuits against the federal government.

In court last week, Mulroney, with a dramatic flourish reminiscent of his years in public office, held aloft the notorious 11-page letter. He told the spectators that the only true statement it contained was in the very first line, when it named him prime minister. "Every other single reference to me in this document is false," he exclaimed, waving the letter about. Listing some of the claims, Mulroney continued: "There are 29 affirmations of fact here. Every single one of them - false!" He said he had no quarrel with the RCMP investigating possible corruption in connection with the Airbus purchase, but he strenuously objected to references in the letter to "criminal activity" on his part. "This is not an allegation," he declared. "This is an indictment. This is a statement that the government of Canada has found me guilty of a crime. This is a fascist condemnation without the accused being present on the part of the government of Canada."

For the first time, Mulroney's testimony shed some light on the train of events that led to his discovery of the letter's explosive contents and his subsequent decision to launch his lawsuit. In answer to questions posed by the government's chief counsel, Montreal lawyer Claude Armand Sheppard, the former prime minister said he first learned about the RCMP investigation as the result of a telephone call last Nov. 2 from Schreiber, who was in Switzerland at the time. "He told me he had received a document and he said, 'There are things in here that involve you,' " Mulroney testified. As Schreiber translated the German-language document over the telephone, Mulroney recalled: "With each passing adjective my horror and disbelief grew. I was thunderstruck. I said, 'What in God's name are you talking about?' This was something straight out of Kafka." The following day, Schreiber's lawyers faxed Mulroney an English translation of the German text. "That's when I first heard of the horror of what had been inflicted upon me," Mulroney testified.

He said he immediately retained legal advisers, who attempted to contact federal authorities with a view to co-operating with the investigation - in return for the withdrawal of the damaging letter before it became public. "The door was slammed right in my face," Mulroney asserted. He denied a suggestion from government lawyer Sheppard that his own lawyers had, in fact, declined an offer from the RCMP on Nov. 15 to remove his name from the investigation in return for agreement to open up his bank accounts for a police review. He was not aware of any such offer, Mulroney maintained, and, in any case, even if it had been forthcoming, it was by then far too late to act because it was already apparent that the whole messy affair was about to break into public view as a result of a swelling "crescendo of leaks to the press."

Mulroney told the court that he had received a fax from the German magazine Der Spiegel on Nov. 15, posing questions about reports of an RCMP investigation. The following day, another fax arrived from Maclean's, asking for comment about accusations of kickbacks channelled into numbered Swiss accounts. "Maclean's even had an actual number and code name of the account in question," Mulroney recalled. "How do you think Der Spiegel and Maclean's got that information from the Swiss authorities?" the former prime minister demanded of Sheppard. "They were given it. It was given to them by your clients!" Under examination, Mulroney angrily dismissed previously published suggestions that his own office had provided the information that allowed The Financial Post to break the first story of the Airbus affair on Nov. 18. According to Mulroney, the newspaper could have received the information from any number of sources since by then "half of Switzerland" was in possession of the supposedly confidential letter.

Throughout his two days of testimony last week, Mulroney repeatedly referred to the "totally devastating" effect upon himself and his family from the RCMP's handling of the Airbus investigation. "I have four children, a mother who is 85 years old and my father-in-law is ill," he said. "To have to explain to them what happened was very painful." He mournfully recalled being forced to take his 10-year-old son Nicolas aside. "You'll see in the papers that the government thinks your father is a criminal," Mulroney testified that he told his son. "You might be harassed."

Much of Mulroney's time on the stand was spent outlining the nature of his relationship with the two other individuals whose names have been linked to the Airbus affair. The former prime minister described Schreiber as a businessman he first met casually in Alberta and later as the chief architect of an unsuccessful scheme to sell military vehicles to the Canadian government. Mulroney's relationship with Moores began when the former Newfoundland premier managed Mulroney's first - and losing - bid for the leadership of the Progressive Conservative party in 1976. "I saw him less and less frequently as the years passed," Mulroney told the hearing, asserting that descriptions of an "intimate friendship" between the two were "highly inaccurate." In fact, he said, he has not seen Moores for several years.

During his testimony, spread over a day-and-a-half in two separate sessions, Mulroney never lost his composure. And he deftly turned the proceedings, known in legal jargon as an examination for discovery, to his own advantage. His court appearance was supposed to be an opportunity for the government's battery of eight lawyers to closely grill Mulroney, searching for ammunition to use when the actual trial commences later this spring or early in the summer. It became instead a platform for Mulroney to present his own case in the best possible light, thanks in large part to the former prime minister's skill in exploiting questions to deliver a speech.

Mulroney, for example, repeatedly challenged the tactics employed by the RCMP's investigator in the case, Sgt. Fraser Fiegenwald. While the Mountie sat in the courtroom flushing brightly as he listened to the testimony, Mulroney repeatedly intimated that Fiegenwald had been misled by a person - or persons - unknown. "Somebody has been trying to set me up," Mulroney maintained, arguing that was the main reason why he initially offered Fiegenwald his full co-operation. "I would have given him anything he wanted," said the former prime minister, "so that Sgt. Fiegenwald would finally say to himself, 'This is a setup and I, Fraser Fiegenwald, am not going to fall for it.' " As it transpired, however, the RCMP's investigators and Mulroney's team of lawyers never did get together. Exactly why is one of the nagging questions that continues to cloud the entire Airbus affair. Last week's hearings offered a tantalizing glimpse of what may have transpired. But the full answers will not likely be known until Brian Mulroney's $50-million lawsuit runs its course.

Maclean's April 29, 1996