Brian Mulroney |
Karlheinz Schreiber |
Frank Moores |
Karlheinz Schreiber
Schreiber was born in 1934 in Petersdorf, Germany.
Karlheinz Schreiber's first business venture was importing carpets from Iran
to Bavaria, after which he went to work for a road marking company.
In 1965 Schreiber set up a holding company in Liechtenstein called Kensington
Anstalt. In later years this shell company would be used to hold some of
his other companies.
Karlheinz
Schreiber had business dealings all over the world.
Schreiber: A Dealmaker
Beginning in the 1960s, Schreiber set out to ingratiate himself with rich
and powerful politicians and business people who could help him in his career.
The most important friend he made was Bavarian Premier Franz Josef Strauss.
Schreiber would become an important facilitator of Strauss-connected and
other German companies around the world.
In 1969 Schreiber made the acquaintance of a young auditor in Switzerland
named Giorgio Pelossi. In the ensuing years, Pelossi became a key player
in Schreiber's business affairs.
But Schreiber's career wasn't all business. During the 1970s, he would travel
to Munich once a month and sit as judge in the District court.
Politics in Canada
In 1974 Schreiber began traveling to Canada, eventually setting up a company
in Alberta. In 1981 Schreiber became a Canadian citizen.
Through his connections to people around Strauss, Schreiber met
Brian
Mulroney then the president of the Iron Ore Company of Canada.
Schreiber liked the young lawyer and was anxious to help him in his quest
to become the Prime Minister of Canada. He
funneled an unknown amount of money into the campaign to undermine Joe Clark
at the 1983 PC convention in Winnipeg. The funds helped buy tickets for newly
minted, anti-Clark delegates to fly to the convention. This influx of anti-Clark
delegates kept a confidence vote on Clark's leadership below 70 percent.
Clark called for a leadership convention, one that Mulroney would win later
that year.
Around the same time, Schreiber was also actively involved in Costa Rica
where, he claimed, he helped support the anti-Sandinista Nicaraguan rebels.
Schreiber, during this period, was working for the German intelligence agency
the BND.
Business interests in Canada
Schreiber increasingly saw opportunities to do business in Canada. In 1985
his company International Aircraft Leasing in Liechtenstein signed a consultancy
agreement with Airbus Industrie. (see the
contract .pdf
file)
The agreement stated that Airbus "shall
pay (IAL) a fee on the products sold." In this case the products were
Airbus airplanes to Air Canada. The same year IAL signed a contract with
Messerschmitt Bolkow Blohm to get commissions on helicopters sold to the
Canadian Coast Guard. (see the
contract .pdf file)
Nineteen eighty-five was also the year Schreiber set up a company in Ottawa to
lobby on behalf of the German corporate giant Thyssen Industries for the creation
a light armoured vehicle-manufacturing plant in Bear Head, Cape Breton.
Karlheinz
Schreiber with Giorgio Pelossi before they had a falling out.
It seemed the Bear Head project was heading for success when Schreiber signed
an "Understanding in Principle" in 1988 with three Tory ministers backing
the idea of the plant. With the signing of that understanding Thyssen topped
off $4 million in fees it promised to send to Schreiber. Some of that money would
wind up with IAL and eventually his "FRANKFURT" account in Switzerland.
(see the
document . pdf file)
Canada was just part of Schreiber's secretive worldwide business empire which
stretched from Saudi Arabia to Costa Rica. Those secrets began tumbling out after
he broke with Giorgio Pelossi in 1991, after Schreiber says he discovered Pelossi
had been skimming money off the commissions.
While the sale of Airbus planes to Air Canada and MBB helicopters to the Coast
Guard had been a success for Schreiber, his plans to build a Thyssen light armoured
vehicle plant in Cape Breton foundered.
A
photograph of Karlheinz Schreiber. Elmer MacKay and Brian Mulroney.
See more
photos.
Financial help for a former Prime Minister
Shortly before Mulroney stepped down as Prime Minister Schreiber went out to meet him Harrington Lake, Quebec.
A month after that meeting, Schreiber set up a sub-account
to one of his Swiss bank accounts, and gave it the code name BRITAN. A day after
it was established $100,000 was debited from it.
Schreiber would meet with Mulroney three times between 1993 and 1994 bringing
him cash in envelopes totaling $300,000. The last meeting took place on December
8, 1994 at the Pierre Hotel in New York.
(see
Follow the Money)
A scandal erupts
Then, on March 28, 1995,
the fifth estate broke the story of
the secret commissions that went from Airbus to IAL, that paid $500,000 on every
Airbus plane sold to Air Canada.
Schreiber's myriad of business dealings soon got him in legal trouble with
German authorities. On October 5, 1995 German police raided Schreiber's home
and seized numerous documents and two of his daytimers. By this time, Schreiber
had left Germany and was living in Switzerland.
(see
daytimer (Nov 21, 1994) and
daytimer
(Dec 8, 1994) .pdf files)
Then in early November 1995, more legal trouble came Schreiber's way. He learned
the Canadian Department of Justice had named him, Brian Mulroney and
Frank
Moores in
a letter it had sent to the Swiss asking for help in getting access to Schreiber
and Moores banking records. The letter accused the three of being involved
a criminal conspiracy stemming from Schreiber's business dealings
in Canada.
Schreiber informed Mulroney of the letter on November 2, 1995 and had a translation
of it faxed to the former prime minister.
Letter of Request goes public
The existence of the DOJ letter began leaking out shortly after Mulroney got
the call from Schreiber. The news finally broke worldwide, when journalist Philip
Mathias wrote about the contents of the letter in the November 18, 1995 Financial
Post. Mulroney's lawyers announced the same day they were suing the federal government
for $50 million.
The
story breaks in the Financial Post on November 18, 1995.
There has been a lot of speculation about who leaked the letter to Mathias.
However, in an interview with CBC, George Wolff, a former correspondent with
CTV and a confidante of Schreiber's, says Schreiber told him he had picked Mathias
to leak the letter to. Schreiber has denied he was the source of the leak.
(read more of Wolff's
interview with
the
fifth estate)
Brian Mulroney was questioned about his relationship with Schreiber during his
cross-examination for discovery that took place in Montreal on April 17, 1996.
Mulroney testified that he only met Schreiber once or twice after leaving office,
when the German businessman was traveling through Montreal. He also testified
that Schreiber's business dealings were not his principal preoccupation."I
had never had any dealings with him,"
said Mulroney. (see the
transcripts .pdf
file) (see a news story
)
(listen to a clip
9:06)
The government settled the lawsuit with Mulroney on January 5, 1997. On January
9 Ottawa apologized to Schreiber for the wording in the Letter of Request,
which, they conceded, made it appear they had already made conclusions about
his guilt.
(read the
apology . pdf file)
Meanwhile, Schreiber, from Switzerland, launched lawsuits to prevent the RCMP
from accessing his Swiss bank accounts.
Trouble in Germany
Schreiber's world was turned upside down when the German government finally got
hold of his bank records. Revelations of secret cash payments to high-ranking
officials of the Christian Democratic Union party ignited the Germany's biggest
post-war scandal.
Elmer
MacKay is a long-time friend of Karlheinz Schreiber. He posted a bond for him
after his arrest.
In early May 1999 two executives with Thyssen Industries were arrested for not
paying taxes on money they received from Schreiber. And Germany's former Deputy
Defence Minister Holger Pfhals became a fugitive for taking millions of German
marks, prosecutors said from Schreiber, to secure a tank deal with Saudi
Arabia on Thyssen's behalf.
With arrest warrants flying in Germany, Schreiber decided to fly out of Switzerland
to Toronto with his long time friend, former Canadian Solicitor General
Elmer MacKay. For several months Schreiber lived in a Toronto condo, until the
RCMP arrested him on August 31, 1999.
After his arrest, Schreiber began a protracted fight against extradition back
to Germany to face corruption, tax evasion and bribery charges.
(watch an interview after his release
7:47)
The BRITAN account
After his arrest, through undisclosed sources, CBC's
the
fifth estate obtained
copies of Schreiber's banking records, which revealed a thinly veiled system
of coded accounts set up for German and Canadian politicians and businessmen.
Among the accounts listed was a cryptic account code-named BRITAN.
(see
Follow the Money)
In October 1999 a
fifth estate producer had several taped phone
conversations with Mulroney spokesperson Luc Lavoie about one of Schreiber's
bank accounts with a coded name that might lead some to conclude that it
had been created for Mulroney. (see
Media
Files to listen to the conversations)
Schreiber
was angered by Luc Lavoie's statements to
the fifth estate.
In the conversations, Lavoie repeatedly stated that Brian Mulroney didn't receive
any money from Schreiber. He also confided "Karlheinz Schreiber is the biggest
fucking liar the world has ever seen. This is what we believe."
On the night of October 20th, Schreiber watched
the fifth
estate program, which
aired Lavoie's statement calling him a liar.
Schreiber tells all
Schreiber was so outraged
by Lavoie's statements that he brought a $300,000 lawsuit against Lavoie.
He also decided it was time to tell selected journalists about the $300,000 in
cash payments he made to Mulroney.
(see the
document .pdf
file)
Mulroney and Schreiber's secret finally broke when lawyer William Kaplan wrote
about the payments in a November 10, 2003 front page story in Globe and Mail.
Schreiber has now been fighting extradition to Germany for six years. His lawyer,
Edward Greenspan, made his final plea to Ontario Court of Appeal on December
5, 2005. If he loses the appeal the only thing standing between Schreiber and
being sent back to Germany is if the Canadian Supreme Court agrees to hear his
case.
On March 1, 2006 Schreiber lost
his extradition challenge in the Ontario Court of Appeal. Only the
Supreme Court of Canada stands between him and extradition back
to Germany to face tax evasion, fraud, and bribery charges.
