Moores linked to Airbus before Mulroney came to power, memo reveals
Last Updated: Friday, April 10, 2009 | 9:40 AM ET
By Harvey Cashore CBC News
Despite years of denials of any links to Airbus, former Ottawa lobbyist and Newfoundland premier Frank Moores wrote to Airbus middleman Karlheinz Schreiber about Air Canada and "political donations" more than a year before Brian Mulroney appointed him to the airline's board of directors, CBC News's The Fifth Estate has learned.
The 1983 memo, produced by Dietlinde Kaup, Schreiber's personal secretary, reveals Moores was involved in the Airbus file even before Mulroney came to power in 1984.
On Aug. 6, 1983, two months after Mulroney won the leadership of the federal Progressive Conservative party, and more than a year before the party won a majority government, Moores sent a Telex to Schreiber's residence in Kaufering, Germany.
"Please call Monday morning around ten am Montreal times," Moores told Schreiber. "Need to talk to you re Air Canada, international trade zone, and political donation regards Frank Moores."
Schreiber's appointment books are full of references to Air Canada and Moores, including a planned meeting with Dennis Groom, Air Canada's chief financial officer in 1987.
Moores was appointed to Air Canada’s board of directors on March 12, 1985 — 19 months after the Telex was sent — when then prime minister Mulroney replaced the Crown corporation's board members with party loyalists. Moores resigned months later, after reports of a conflict of interest involving his lobbying firm, Government Consultants International (GCI), and rival airlines.
On July 20, 1988, Air Canada announced its decision to buy 34 Airbus A320 planes from Airbus Industrie for $1.8 billion.
Moores, who died in 2005, always maintained he had nothing to do with the deal.
But documents provided to The Fifth Estate also show that on Feb. 3, 1988, Moores wrote to then Airbus chairman Franz Josef Strauss, raising concerns that Airbus might not provide the Crown corporation with what's known as a "deficiency guarantee" — an aircraft manufacturer's guarantee of a plane's future resale value.
The Airbus chairman responded on March 29, affirming the guarantee would be in place.
The next day, March 30, Air Canada's board of directors met and approved the proposed Airbus purchase.
As well, evidence unearthed by The Fifth Estate appears to contradict Air Canada's claims that it had no involvement with Frank Moores and his lobby firm.
Former Airbus salesman Anthony Lawler told The Fifth Estate that he first heard about Moores while working on the Airbus agreement with Dennis Groom, Air Canada's chief financial officer at the time.
"His secretary called him out for a moment and he came back and said, 'Oh, that was Frank Moores and he wanted to know which aircraft we were looking at,' " Lawler said.
The Fifth Estate has previously exposed details about the secret commissions involved in the sale of the Airbus airplanes.
Documents show that five days before Mulroney appointed Moores to the Air Canada board in 1985, Airbus Industrie signed a confidential agreement with Schrieber's Liechtenstein shell company, IAL, to pay secret commissions on the sale of any Airbus aircraft in Canada. The contract included the proviso that the agreement would be terminated "automatically" if Mulroney's government lost power.
Documents given to The Fifth Estate by Schreiber's former accountant Giorgio Pelossi show that each time Air Canada sent a cheque to Airbus to pay for a delivery of planes, Airbus sent a percentage of that money to IAL.
But The Fifth Estate has also learned that Air Canada prohibited Airbus from making secret commission payments relating to the Airbus purchase.
Industry insiders say such clauses are routinely added to airline contracts because secret commissions can increase the cost of the aircraft.
Former Air Canada president Pierre Jeanniot told The Fifth Estate he was initially unaware that Airbus paid secret commissions.
"These are things that were not known to us at the time," he said. "We, in fact, we asked them to sign something. If they lied or anything of this nature, I mean, this something maybe for other people to get involved in."
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