Ex-PM Mulroney seeks to restore reputation

Tue May 12, 2009 1:15pm EDT
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By Randall Palmer

OTTAWA (Reuters) - Former Canadian Prime Minister Brian Mulroney, seeking to restore a tarnished reputation, testified on Tuesday that when he received large secret payments in 1993 he had no idea that the man he got them from would one day be a fugitive from justice.

It was his first day of testimony at an inquiry the government has set up to examine cash payments Mulroney received from German-Canadian arms dealer Karlheinz Schreiber after Mulroney stepped down as prime minister in 1993.

Schreiber says he handed over C$300,000 ($256,000) in cash to Mulroney in separate hotel meetings so that Mulroney could help promote establishment of a factory to build light armored vehicles.

Mulroney says that the amount was only C$225,000 and said on Tuesday that he accepted that such "inadequately documented arrangements are inappropriate" for former office holders.

Mulroney said nothing he did was illegal and that the Schreiber he dealt with was a well-respected businessman.

"The Karlheinz Schreiber that I knew in 1993 was not the man that we know here today," said a husky-voiced Mulroney, now 70.

He said Schreiber was closely associated with German firm Thyssen AG, which employed 160,000 people, and that Schreiber led Thyssen's efforts to set up the light-armored vehicle plant in Canada, and came recommended by friends Mulroney respected.

"So that's the Schreiber I knew, but then in 1999 Mr. Schreiber was arrested in Toronto under an international Interpol warrant and jailed pending his extradition," Mulroney said.   Continued...

<p>Former Prime Minister Brian Mulroney pauses while testifying at the Oliphant Commission in Ottawa May 12, 2009. REUTERS/Blair Gable</p>