March 5, 2008 / 9:37 PM / in 10 years

Canada to hold German businessman until inquiry

OTTAWA (Reuters) - The Canadian government has agreed not to extradite German-Canadian arms dealer Karlheinz Schreiber to Germany until he can testify at a public inquiry into cash payments made to a former prime minister, his lawyer said on Wednesday.

<p>German-Canadian arms dealer Karlheinz Schreiber testifies before the Commons ethics committee on Parliament Hill in Ottawa February 25, 2008. The Canadian government has agreed not to extradite Schreiber to Germany until he can testify at a public inquiry into cash payments made to a former prime minister, his lawyer said on Wednesday. REUTERS/Chris Wattie</p>

Speculation had mounted that Schreiber could be extradited as early as Thursday -- after a Supreme Court decision -- to face charges in Germany of fraud, bribery, tax evasion, corruptly accepting secret documents and forging documents.

But Justice Minister Rob Nicholson sent a letter to Schreiber’s lawyer, Edward Greenspan, this week assuring him that there would be no extradition until Schreiber has testified before the Canadian inquiry.

“I agree that, subject to any change in circumstances, Mr. Schreiber will not be surrendered until he has testified before the inquiry,” Nicholson wrote.

The inquiry is one the Canadian government has promised into cash payments by Schreiber to former Conservative Prime Minister Brian Mulroney, after he stepped down as prime minister in 1993.

Mulroney says it was unwise to have taken the money in cash -- handed over in a series of hotel meetings -- but he says they were legitimate payments for his work in promoting Schreiber’s business.

Besides the keen interest the Germans have in Schreiber, his activities in Canada have been of interest to Canadian opposition politicians -- and embarrassing to the current Conservative government, which has taken advice from Mulroney.

Some doubts had emerged as to whether the inquiry would in fact be called, because a House of Commons committee had held its own lengthy investigations into Schreiber’s dealings with Mulroney, but Nicholson’s letter appeared to erase any doubt.

“He specifically states there will be an inquiry,” Greenspan told Reuters.

The Supreme Court of Canada will decide on Thursday morning whether to hear an appeal by Schreiber of an aspect of the government’s decision to extradite him. The court has rejected two previous requests to hear an appeal.

Schreiber, fighting extradition since 1999, won a public rebuke in June from the Federal Court for making “last-minute, last-gasp” attempts to avoid being sent to Germany.

A former German minister, Ludwig-Holger Pfahls, told a German court in 2005 that he took bribes from Schreiber to push through a 1991 sale of armored cars to Saudi Arabia.

Schreiber’s donations also helped topple former German Chancellor Helmut Kohl.

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