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WEDNESDAY FEBRUARY 8, 2006 | Bookmark this page | E-mail to a friend |
(43:00)What was Schmiergelder?
Schmiergelder was the official name designated under German tax law permitting middlemen to deduct from their incomes bribes or any other payments to foreigners to secure the sale of German products. These deductions were called necessary business expenses. Schmiergelder is translated literally as "grease money".
The practice of paying schmiergelder was permitted until 1998 when Germany joined other European countries in a pact prohibiting the payment of grease money to foreign public officials. Germany expanded the ban in 2002 to include more than just public officials; it now prohibited paying Schmiergelder to anyone in a foreign country in a decision-making role.
In a 2001 interview with CBC's the fifth estate Linden MacIntyre, Schreiber's German lawyer Jan Olaf Leisner said Schreiber used the provisions of the German tax law to pay schmiergelder in the sale of helicopters to the Canadian Coast Guard.
"Mr. Schreiber's position in the tax case is (he) was a middle man who acted on behalf of decision-makers who received money from German companies who are interested in different investments in, for example, Canada or wherever," said Leisner.
Karlheinz
Schreiber's German lawyers says it is necessary that people who
received lubrication money remain unknown.MacIntyre asked Schreiber's lawyer for the English translation of the German term for Schreiber's mode of business. "The translation is "lubrication money," he said.
Leisner said Schreiber's main role was to protect the recipients of the lubrication money adding, "Mr. Schreiber protected them by making every payment anonymous."
In a recent interview with MacIntyre, Karlheinz Schreiber discussed the law as it existed in Germany at the time.
"There is a law in Germany or was a law in Germany that you can pay grease money or bribe, whatever is necessary, to get a contract, for a German company.
So now the Germans say, well – when you look at the international scenario we should be in the position that we can do the same thing other people do. Therefore you are allowed to deduct these expenses as long as we have a contract – legally.
The joke is that they say we know this is against law maybe. We know this maybe against moral. But we cannot care about this. In the interest of our industry we have to accept this."
The United States outlawed bribing foreign officials when it passed
the Foreign
Corrupt Practices Act of 1977 
. Canada followed eleven
years later with the passage of the Corruption
of Foreign Public Officials Act .
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