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Mulroney denies cash deal while in office

Admits lobbying role after leaving

Email|Print| Text size + By Rob Gillies
Associated Press / December 14, 2007

TORONTO - Former Canadian prime minister Brian Mulroney denied yesterday that he received kickbacks from a German arms dealer while in office, in a case that has sullied his reputation and could result in legal action.

Mulroney testified before a parliamentary committee investigating the matter that his two biggest mistakes in life were agreeing to meet with Karlheinz Schreiber and later agreeing to accept a cash payment of $225,000 in Canadian dollars from the businessman after he left office. He said the cash was earmarked for lobbying world leaders on behalf of Thyssen Industries, a major client of Schreiber.

"When I look back on it today, I realize I made a serious error of judgment in receiving a payment in cash for this assignment even though it was decidedly not illegal to do so," Mulroney said. "That mistake in judgment was mine alone. I apologize and I accept full responsibility for it. . . . I should have declined the offer. I should have insisted that payment be in a more transparent or more accountable manner. By not doing so I inadvertently created an impression of impropriety on the high office I was privileged to hold."

The committee is investigating whether Mulroney, who served as prime minister from 1984 to 1993, struck a deal with Schreiber while still in office - a violation that could have legal ramifications.

Schreiber is currently facing extradition to Germany on charges of fraud, bribery, and tax evasion. He was released on bail from a Canadian jail earlier this month.

German authorities allege Schreiber, who has dual Canadian-German citizenship, avoided paying income tax on millions of dollars in commissions. The fraud charges against him arise from a deal for the sale of German army tanks to Saudi Arabia.

Mulroney's appearance before the committee follows four separate days of hearings with the German businessman.

He firmly denied Schreiber's allegation that he agreed to accept $300,000 in Canadian dollars for "future services" while still in office in 1993 and stressed that "not a word was breathed" about future business dealings with Schreiber while he was still in politics.

Schreiber has alleged that two days before Mulroney resigned as prime minister he agreed to promote a project involving a light armored vehicle factory.

Mulroney said Schreiber will "say anything, sign anything, and do anything to avoid extradition."

He admitted accepting about $225,000 in Canadian dollars in cash from Schreiber in a series of hotel room meetings in 1993 and 1994 following his departure from politics. But he said the money involved promoting Schreiber's private business dealings.

Mulroney's political legacy came crashing down in 1993 as voters, weary of his nine-year hold on power, cast ballots that left his Progressive Conservative Party with just two seats in the 295-seat House of Commons.

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