Opposition Says Mulroney Owes Taxpayers Millions After Winning Bogus Libel Suit

Brian Mulroney owes Canadian taxpayers millions of dollars after an inquiry found the former prime minister hid the truth during his 1990s libel suit against the government, say opposition critics.

Mulroney should simply do the right thing and return at least $2.1 million he won in damages in a 1997 settlement, plus another $1.6 million in legal costs, Liberal Leader Michael Ignatieff and NDP Leader Jack Layton both said Tuesday.

But in case his conscience fails him, all three opposition parties agree Mulroney should face a legal pursuit by Stephen Harper’s Conservative government.

Justice Minister Rob Nicholson dodged a direct response in the House of Commons, instead stating the government would examine all the recommendations from inquiry commissioner Justice Jeffrey Oliphant.

Oliphant’s four-volume report made no recommendations about revisiting the Mulroney settlement, but a senior government source said departmental lawyers could still advise taking that route.

Nicholson would only say that Oliphant’s “recommendations are being looked at by the appropriate authorities, and any recommendations from the group that is looking at it, or anybody else, of course will be taken into consideration.”

NDP MP Charlie Angus said the Conservative government is stalling for time, hoping the issue will blow over.

“I’ve never seen Mr. Nicholson say, ‘I’ll wait for my bureaucrats to tell me what we should do,'” Angus said outside the House of Commons.

“Here’s a guy who gets up every two days in the House and has a new crime bill: ‘We’re going to take action! We’re going to stand up for Canadians!’ Now he’s saying, ‘well, if there were recommendations, I’d follow them . . . .’

“What’s obvious here is the need for leadership and we’re not seeing it from this government.”

Given the contents of the Oliphant report, opposition critics see no reason for caution.

“Quite simply, the (former) prime minister lied,” Angus told the House.

“He got envelopes stuffed with cash from (Karlheinz) Schreiber and then he picked the $2 million from the taxpayers on the way out. Why will the government not send a clear message: Mulroney lied and we want our money back?”

Justice Oliphant — lacking the cover of parliamentary immunity — did not state the facts nearly as colourfully.

But the commissioner who conducted the $16 million inquiry into Mulroney’s clandestine business relationship with Schreiber, a German arms dealer now in prison for tax evasion, made his findings abundantly clear.

Mulroney described his relationship with Schreiber as nothing more than “a cup of coffee, I think, once or twice.” The testimony, under oath, came in 1996 as Mulroney sought $50 million in libel damages from the Canadian government because it had launched an international investigation into possible kickbacks involving Schreiber, Mulroney and others.

Oliphant’s report found that “Mr. Mulroney’s meetings with Mr. Schreiber were not about having a cup of coffee.

“Rather, they had to do with a commercial transaction between the two men and the payment of cash by Mr. Schreiber to Mr. Mulroney in connection with that transaction … What the question called for was a clear, complete, forthright answer.”

Mulroney, says the inquiry report, “failed to disclose appropriately the facts of which Mr. Mulroney was well aware, when such disclosure was clearly called for.”

Or, as Liberal MP Marlene Jennings put it Tuesday, “what he failed to mention was that his coffee was sweetened with envelopes stuffed with cash.”

Jennings believes that, with interest, Mulroney’s debt to the Canadian treasury “could well be beyond $10 million today, and more.”

“I wish his family a lot of luck, I wish them the best,” Jennings said outside the House.

“But Mr. Mulroney, given the conclusions of Justice Oliphant, needs to pay that money back. He shouldn’t wait for the government to go after him. He should volunteer it himself.”

Ignatieff also called on Harper to lean on his “close friend, apparently a confidante” to return the money to Canadians.

“Let’s try moral suasion,” said Ignatieff. “I think this is a matter of honour. I think this money was acquired effectively through false, false pretences and Canadians feel it’s wrong.”

Layton agreed, saying “we would hope that moral suasion would do it.

“If not, then I think that some legal route is going to have to be investigated because quite clearly it can’t be left to stand as it is.”

Mulroney is not granting media interviews, but in a release Monday he stated that “for now, I am merely grateful that this unfortunate chapter is over and that my family and I can move forward with our lives.”

Mulroney’s spokesman suggested Tuesday he was unlikely to voluntarily return the settlement, citing a 2008 report on the matter from the Commons ethics committee.

Evidence at the committee indicated the RCMP libelled Mulroney by flatly asserting criminal wrongdoing on his part, when no such wrongdoing has ever been proved.

A minority report by Conservative MPs on the committee went further: “Given that a decade-long RCMP investigation into the Airbus purchase which proceeded well past the date of the libel settlement found no evidence of criminal wrong-doing, and given the lack of any new evidence before our Committee, it must be concluded that the settlement reached with Mr. Mulroney was appropriate.”