Saturday, July 28, 2007


Former PM Muldoon (as the very respectable muckraking journal Frank Magazine refers to him) is once again in the news. Not in respect to any of his multitude of directorships which he has eagerly amassed over the course of his 14 year retirement. Nor is it because of his inordinate kow-towing to conservative men of wealth and power. Neither is he in the news for rendering advice to Bush's pal Steve Harper, who has become his disciple. No, he is not in the news for any of those normal activities for an ex-PM. He is back amidst the sleaze of the Airbus Affair and that annoying and aggravating boil on his backside, one Karlheinz Schreiber.

Schreiber, you will recall, was the arms dealer, bagman and political gad-fly who, unable to work his way into the affections of Peter Lougheed's Alberta Tory government, found the Muldoon Federal Tories not quite so high-minded. Realizing this, he rightfully concluded that the Federal Tories were rich fodder for a lobbyist who represented European manufacturers of arms and aircraft. And so he set about the task of enriching himself and others as well as European arms and aircraft manufacturers by arranging purchase deals with the Canadian government. (For an excellent review of these activities read Stevie Cameron and Harvey Cashore's fine book The Last Amigo, MacFarlane, Walter and Ross 2001).

It should be noted that Lougheed's nose for potential scandal was indeed so sensitive, that neither he nor any member of his government were touched by even a hint of one in more than 14 years in office. Bravo!

Not so with Muldoon's crew however (for a further excellent review of the excesses of his administration, read Cameron's On the Take, MacFarlane, Walter and Ross 1994).

It is trite to say at this stage that the most intriguing scandal of those years was the famous Airbus affair in which the ubiquitous Schreiber played a central role. You will recall that the Airbus affair happened during the Muldoon Administration and involved the sale of 34 European manufactured Airbus aircraft to Air Canada, which at the time was a Canadian crown corporation. Schreiber played a middle-man role in getting the parties together and made gazillions on the deal.

After Muldoon's departure from office, unhappy differences arose within Schreiber's business organization. As a result, serious accusations were made of kick-backs by Schreiber to Tories in high places. One of which was the late Frank Moores, former Newfie Premier, indefatigable lobbyist and Tory shill, who at the time was a Director of Air Canada. Another high profile accused recipient of Schreiber's largesse on the deal was Muldoon himself.

Things really heated up in late 1995 when the Canadian Keystone Kops - the RCMP - notified Swiss authorities in writing that they wanted access to Schreiber's bank accounts as part of its investigation of a crime in which Muldoon took kickbacks. The letter to the Swiss was publicly revealed and Muldoon sued the Canadian Feds for libel. After pre-trial depositions, the case was settled in 1997 with the Canadian government paying the ex-Prime Minister $2.1 million of your money.

But the matter didn't end there. In his lawsuit against the Feds, Muldoon denied under oath that he had any business relationship with Schreiber. However, 6 years after the settlement- in 2003 - it was revealed that Schreiber had given the ex-PM $300,000 in cash at 3 different meetings in New York and Montreal shortly after Muldoon left office in 1993.

Life has not been easy for Schreiber. For years he has been fighting off extradition attempts by German authorities to haul him back to his native Germany to face fraud and corruption charges. According to all reports, he has almost exhausted all of his legal challenges and will have to face the music soon.

In the meantime, whatever relationship existed between Muldoon and Schreiber seems to have turned poisonous. The Schreiber/Muldoon/Airbus affair, which has arisen and gone back into dormancy several times over the years, has now returned - carrying with it the usual pungent hydrogen sulphide smell of sleaze. Schreiber sued Muldoon in March demanding the $300 grand together with interest be returned, alleging that his ex-pal didn't deliver on promises to help a Schreiber client locate an armored vehicle manufacturing factory in Canada. Neither, says Schreiber, did Muldoon promote, as promised, Schreiber's pasta business.

And this week, after much stalling and bickering between the counsel, Schreiber's lawyers entered a default judgment in the Ontario Courts, without the knowledge of Muldoon's lawyers. Of course, the Muldoon lawyers are mad as hell. They've applied to set aside the default judgment. The Judge has let it be known he is not happy with this 'silly war' as he calls it. He's told both sides to shape up as he ponders whether or not to set the judgment aside.

All of which should give Bush's pal Steve Harper pause about embracing Muldoon as a trusted advisor. It has been reported that the ex-PM's counsel has been sought by Harper from time to time. And just last week, Muldoon praised Harper as having done 'exceptionally well.' Warming to the subject in his inimitable way that's got him into so much hot water over the years, Muldoon raptured, "In fact, I would say that his government is probably off to the best start of any government that I can remember in my lifetime."

Advice to Bush's pal Steve Harper: keep him at the laundry.


Finnegan said...

DR, I really enjoy your comprehensive and intelligent posts! I'm just starting to check a few blogs, but not yet blogging. I'm roughly your generation and exactly your gender. I'm also a member of the Alberta Liberal party, so I'm aware of your contributions, which mine pale in comparison to. (Is that a split infinitive?)

But enough about me - I'm intrigued by an obscure reference in your post to the Lougheed years being scandal-free. While I'm a great admirer of PL, I've been unable to shake the memory of a brief TV news clip during the mid-to-late period in his premiership. A reporter was at the door of Dr. Hugh Horner and, as I recall, asked him if there was any truth to the report that he had received a payment on his mortgage in the amount, again as I recall, of around $100,000 from a certain Mr. Schreiber (!) in connection with an aircraft purchase contract. (This was likely during the time that PWA was wholly or partially owned by the province.) Recalling the clip once more, I believe HH shut the door on the reporter with little or no response and the matter received little further attention that I'm aware of. Do you or anyone else remember this, or did I dream it?

Darryl Raymaker said...

Thanks for the complement. Stevie Cameron's 'The Last Amigo' Chapters 3 and 4 deal extensively with Schreiber's Alberta adventure. She mentions the Horner mortgage. My understanding is that this murky deal did not come to the public's attention until 1995 - long after Horner quit politics. Indeed, it appears that he never paid the whole thing off.
There is no evidence that Lougheed himself knew anything about it. In fact, according to Cameron, Lougheed met Schreiber once, was uncomfortable with his aggressiveness and thereafter instructed his senior officials that they should not do business with him.
Furthermore, Schreiber was also busy accumulating Edmonton area land during the 79 - 80 - 81 boom time. He had hired various ex-officials with the Government in the process and ultimately an annexation by the City of Edmonton of most of the Schreiber lands was ordered by the Alberta Government. There were allegations of wrongdoing and Lougheed ordered an Inquiry. Although there was a finding of no wrongdoing, the Judge did find aspects suspicious. In the end, it was to of no avail for Schreiber, the boom bust and he lost bundles including the land. This is all according to the book.

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