Inquiry says Mulroney acted inappropriately

Mon May 31, 2010 6:02pm EDT
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By Allan Dowd

VANCOUVER (Reuters) - Former Prime Minister Brian Mulroney had inappropriate business dealings with German-Canadian arms dealer Karlheinz Schreiber that included secret cash payments, a inquiry reported on Monday.

The two men tried to hide their business relationship by having Schreiber pay Mulroney in cash, leaving no paper trail, according to the inquiry, which was launched by the Conservative federal government in 2007.

Mulroney told the inquiry last year there was nothing illegal about the secret cash payments.

"I find, applying Mr. Mulroney's own test, that his business dealings with Mr. Schreiber were not appropriate," Inquiry Commissioner Jeffrey Oliphant, a former judge, said in his report.

Oliphant told an Ottawa news conference that he did not accept Mulroney's claims that his decision to accept cash from Schreiber at hotels in Montreal and New York was simply "an error in judgment".

"In my view, an error in judgment cannot excuse conduct that can reasonably be described as questionable if that conduct, as is the case here, occurred on three distinct occasions," Oliphant said.

The business relationship began after Mulroney stepped down as prime minister in 1993, but while he was still in Parliament, which would violate government ethics rules, Oliphant said.

Schreiber said he paid Mulroney C$300,000, but Mulroney said it was C$225,000. Oliphant could not determine which man was telling the truth.   Continued...

<p>Commissioner Jeffrey Oliphant delivers a statement about his report on the dealings between former Prime Minister Brian Mulroney and German-Canadian arms dealer Karlheinz Schreiber in Ottawa, May 31, 2010. REUTERS/Chris Wattie</p>