Canada to probe why former PM took cash payments

Fri Jan 11, 2008 4:01pm EST
 
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By David Ljunggren

OTTAWA (Reuters) - Canada confirmed on Friday it would hold a formal inquiry into why former Prime Minister Brian Mulroney accepted hundreds of thousands of dollars in cash from a business lobbyist, but the probe is likely to be more limited than that demanded by opposition parties.

In recent years, Mulroney has been a mentor to current Prime Minister Stephen Harper, who announced the investigation last November and then asked academic David Johnston to examine how best to proceed. Johnston delivered his report this week.

"After reviewing the report and consulting Professor Johnston, the government has decided to convene a public inquiry," Harper said in a statement.

Last month, Mulroney apologized publicly for taking cash from German-Canadian arms dealer and business lobbyist Karlheinz Schreiber after leaving office in 1993. The cash -- totaling C$225,000 ($221,000) according to Mulroney, C$300,000 according to Schreiber -- was stuffed in envelopes and handed over at hotel-room meetings.

Although Harper had nothing to do with the payments and was not even in the same party as Mulroney at the time, opposition parties hope some of the dirt will stick to him.

Schreiber, who is awaiting extradition to Germany to face charges of fraud, bribery and tax evasion, wrote to Harper last year about the case but the Prime Minister said he never received the letter, prompting accusations of a cover-up.

The probe will start after a parliamentary committee finishes examining the "Airbus affair" -- a 1990s probe into suspected kickbacks tied to Air Canada's purchase of Airbus airliners in 1988, while Mulroney was prime minister.

The inquiry is likely to take months to set up, meaning there is no chance of any testimony being used in an election campaign some observers expect in the first half of 2008.   Continued...

 
<p>Former Canadian Prime Minister Brian Mulroney testifies before the Commons ethics committee on Parliament Hill in Ottawa, December 13, 2007. Canada confirmed on Friday it would hold a formal inquiry into why former Mulroney accepted hundreds of thousands of dollars in cash from a business lobbyist, but the probe is likely to be more limited than that demanded by opposition parties. REUTERS/Chris Wattie</p>