Brian Mulroney testifies at the Oliphant commission, which is looking into business dealings between Karlheinz Schreiber and the former prime minister. (Adrian Wyld/Canadian Press)

The lead lawyer at the Oliphant inquiry grilled Brian Mulroney on Thursday over his sworn testimony at his Airbus lawsuit in 1996, accusing him of not painting the full picture in describing his relationship with Karlheinz Schreiber.

Richard Wolson questioned the former prime minister in Ottawa about the testimony he gave in Montreal during the discovery process of his lawsuit against the federal government over the Airbus affair.

He suggested Mulroney wasn't being completely open when describing the relationship he had with Schreiber because he didn't mention the commercial arrangement he had struck with the businessman.

"You're not quite fulsome in your response," Wolson said.

"I am being fulsome… and truthful," Mulroney said.

Mulroney said he had been referring to the timeframe when he was prime minister in characterizing their relationship.

Keeps up heat

Wolson pressed Mulroney, asking about his response to the question of whether he maintained contact with Schreiber after he left office.

Mulroney responded in 1996 that from time to time he and Schreiber had met for coffee, but didn't discuss their business relationship or the three cash payments Mulroney received in 1993 and 1994 at three hotels.

Wolson asked Mulroney if — when he testified in 1996 that he had coffee with Schreiber twice — he was "being totally fulsome, forthright, telling the whole truth and nothing but the truth."

Mulroney answered: "I was truthful in answering the specific question, which was 'Did you maintain contact with Mr. Schreiber?"

Had the question been asked whether he had a business relationship, Mulroney said he would have responded, yes, but that question never came in 1996.

"Never came because no one knew about it but you and Schreiber and [Fred] Doucet and someone in Germany. That's why it never came," Wolson responded.

"It never came because, as I say, the high-priced talent that had been retained by the government did not ask me the question," Mulroney said.

Mulroney said under Quebec law, he was under no obligation to volunteer any information.

Wolson asked if he thought Mulroney, as a former prime minister, should have testified that he had a "legitimate business relationship" with Schreiber.

"I indicated to you exactly what I was told in those circumstances from my lawyers — answer the questions truthfully. Do not volunteer information," said Mulroney.

But Wolson asked Mulroney why, if he wasn't there to volunteer information, he testified that Schreiber had retained former Liberal cabinet minister Marc Lalonde.

"How do you explain the difference? You're volunteering information about a retainer of Mr. Lalonde, not having been asked, but you don't say anything about your retainer [with Schreiber]?"

Mulroney told Wolson that Lalonde was specifically involved in the relocation of the Bear Head project to Montreal and it was in that context he mentioned him.

Later, Wolson said he could see why Mulroney might be reluctant to admit taking the money, "because it would have been like putting gasoline on a fire,”

"But I don't understand why you can't admit that you simply didn't tell him for that reason, because it would have just spread like wildfire, this poisonous atmosphere that existed."

"The answer is that he never asked me the question," Mulroney said.

He said he was in a terrible situation at the time of the Airbus accusations.

"The nine lawyers sitting there … out to crush me and my family … this was not conducive to a friendly exchange of information or compromise.

"I was fighting for my life and the honour of my family."

Looking into cash payments

The Oliphant inquiry is looking into the three cash payments Mulroney received from Schreiber.

Schreiber has said he paid Mulroney $300,000 to lobby domestically on behalf of the Bear Head project — a plan to establish a light armoured vehicle plant in Canada.

But Mulroney has said he was paid $225,000 in three instalments and that the money was payment for his efforts to promote the vehicles internationally on behalf of the German company Thyssen. He has denied it was for any domestic lobbying work, which would have violated domestic lobbying rules.

The inquiry has so far heard from Mulroney that he did nothing legally wrong in accepting the payments but that he made a significant error in judgment.

Mulroney has also maintained that the deal he struck with Schreiber was made after he had resigned as prime minister. He has rejected Schreiber's allegation that, while no money exchanged hands, an agreement in principle was arranged at the prime ministerial retreat at Harrington Lake, Que., on June 23, two days before he left office.

Schreiber has also contended that Mulroney did little work for the money. But Mulroney testified on Wednesday about meetings he'd had with political leaders from China, Russia and France to promote the sales of armoured vehicles for United Nations peacekeeping missions.

Wolson also challenged Mulroney on accepting the cash payments, suggesting alarm bells should have rung when the first payment was offered.

"A man who’s associated with a major international corporation taking out of his briefcase an envelope with thousands of dollars — that in itself should have caused you, at the time to have said, 'Hold on here, what’s happening, who is this guy?'"

Mulroney repeated what he has said before, that it was a mistake, he should have asked for a cheque and that would have made “all the difference in the world.”

"Why?" Wolson asked. "Couldn’t you have taken the money, put it in the bank and create your own paper trail?"

“You have to think that this was a subject of discussion or contemplation,” Mulroney said. "Had he given me a cheque, I’d have done what you’d do with a cheque, put it in my account and done the work for him. As it was, he paid me in cash, in legal Canadian tender. I took it, and I did the work for him. But I’ve acknowledged that that was an error in judgment.”

Wolson also asked Mulroney about the closeness of his relationship with Schreiber, pointing to letters Schreiber had sent him, including one that spoke about Mulroney's mother's birthday.

Mulroney said the two were never close, just acquaintances, and that he never saw those letters, saying that lobbying letters were "a dime a dozen" and do not come to the prime minister.

Mulroney rejected the suggestion that Schreiber had special access to him. He maintained that Schreiber was only able to see him because of his friendship with Conservative cabinet minister Elmer MacKay and his connection to former Mulroney aide Fred Doucet.

Mulroney said it wasn't exceptional to have seen someone like Schreiber on an ongoing basis.

"I found time to see hundreds of Schreibers," Mulroney said.