MULRONEY AND SCHREIBER AND THE AIRPLANES THAT JUST WON'T FLY AWAY

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.