Karlheinz Schreiber said there was nothing wrong with former prime minister Brian Mulroney accepting three envelopes of $300,000 in cash between 1993 and 1994, saying that dealing in cash was common in Europe.

"We have a different relationship to cash in Europe than you have here. Credit cards are not that common," Schreiber told CBC's Peter Mansbridge in an interview shortly after the German-Canadian businessman's Tuesday appearance before the ethics committee which is investigating his relationship with Mulroney.

Karlheinz Schreiber speaks to CBC's Peter Mansbridge.
(CBC)

"People have to pay eight per cent [interest] or five per cent, you get a much better bargain when you pay cash and you don't want ... everybody [to] know what you buy."

Schreiber claimed the money, handed out in hotel rooms in envelopes containing $1,000 bills, was for Mulroney to help establish a light-armoured vehicle factory for Schreiber's client Thyssen. 

Schreiber said he had never given cash in envelopes to other politicians or to bureaucrats before his exchange with Mulroney.

Schreiber claimed Mulroney said "thank you" when he gave him the cash and put it in his briefcase, adding that the former prime minister didn't count the money.

Asked what he thought Mulroney would do with $1,000 bills, Schreiber said: "It was his problem, not mine. What do you think, I can bring $100,000 in $20 bills?"

Schreiber said he didn't cut Mulroney a cheque because there were no cheques for the Switzerland bank account.

Schreiber, who is out on bail while he fights extradition to Germany to face fraud and other charges, said he never considered the payments to be money nobody would ever know about, and that he expected Mulroney to send him a bill or receipt for the cash.

Schreiber is now suing Mulroney to recoup the $300,000 in cash payments, alleging the former prime minister didn't do anything for the money.

Mulroney, who is set to testify before the committee Thursday, has never publicly talked about the $300,000 he accepted from Schreiber. Mulroney's spokesperson said in November that Mulroney admits taking the cash was a "colossal mistake."

None of the allegations against Mulroney has been proven in court.