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Karlheinz Schreiber says his financial agreement with former prime minister Brian Mulroney was supposed to be worth $500,000, but the German-Canadian lobbyist tried to dodge questions about what the money was for.

However, Mr. Schreiber told a parliamentary committee Thursday that the $300,000 he eventually paid Mr. Mulroney in three separate cash payments had “nothing to do with any pasta business.”

Mr. Mulroney, through a spokesman, has said that the money was for Mr. Mulroney's help to promote a pasta business, as well as establishing a light-armoured vehicle factory for Mr. Schreiber's client Thyssen AG.

“It had nothing to do with any pasta business. It simply didn't exist,” Mr. Schreiber told MPs Thursday. “It was not $300,000 to be discussed. It was $500,000. But he received only $300,000 because he did nothing.”

Pressed later to elaborate on the $500,000 agreement, Mr. Schreiber said the cash was for Mr. Mulroney's help to “deal with” the Bear Head light-armoured vehicle plant project in Nova Scotia, which never materialized.

“Since [Mulroney] didn't perform, he didn't get the $500,000, simple as that,” he said.

Earlier Thursday, Mr. Schreiber insisted that he would not testify before the Commons ethics committee until after his extradition matter is dealt with and he has time to review his personal papers.

“Until the court hearing in Toronto tomorrow [regarding] the length of the stay, I am unwilling at this time to testify,” he said in an opening statement, referring to a motion that will be heard Friday by Ontario's Court of Appeal.

“I have nothing more to say now. I've made it clear I wish to speak, but not in circumstances that are calculated to be degrading and humiliating.”

Mr. Schreiber said he was given no time to access his personal documents or to prepare for the hearing, as was explicitly provided for in the Speaker's warrant that compelled his testimony Thursday.

In response, committee chair Paul Szabo and other members agreed that Mr. Schreiber should have time to review his documents. Members of the committee were permitted to ask questions on the record. Mr. Schreiber answered some and deferred others.

Mr. Schreiber, the co-star of a political soap opera that has gripped Parliament Hill this session, appeared with a lawyer at his side before the packed committee to testify about his $300,000 cash deal with former prime minister Brian Mulroney.

Gone were the handcuffs in which the German-Canadian lobbyist had been led into Parliament by officers earlier in the morning. He wore casual business attire and appeared comfortable as he was sworn in.

MPs quizzed Mr. Schreiber about the cash he gave to Mr. Mulroney in 1993 and 1994, given that Mr. Mulroney in 1996 said he only had coffee “once or twice” with Mr. Schreiber after leaving office in 1993.

Mr. Schreiber alleges that he struck a financial deal with the former prime minister while the latter was still in office.

Mr. Schreiber complained Thursday about his transfer from Toronto to Ottawa to testify before the committee.

“Yesterday, I was taken from Toronto West Detention Centre in a van by two officers from the Ottawa Detention Centre. I was handcuffed, I was in leg irons. I wore an orange jump suit. I do not understand why that was necessary given that I have been on bail for eight years and three months pending an extradition request by Germany,” he told committee members.

“I'm a Canadian citizen and I am proud of that fact,” he said, noting that he was upset Prime Minister Stephen Harper suggested he should be “sent home” for trial. He said he is not a flight risk and should be treated accordingly.

Mr. Schreiber's testimony, compelled by a rare Speaker's warrant, follows a week of legal, political and parliamentary manoeuvring to keep the German-Canadian lobbyist in Canada beyond Saturday, when he was scheduled to be deported to Germany.

The government announced late Wednesday that it would not extradite him while a last-ditch appeal remains before the courts, a surprising turn of events, given that Justice Minister Rob Nicholson has said repeatedly that he had no authority to take such action.

Mr. Schreiber's lawyers want the Ontario court to grant a stay of the extradition, pending an appeal to the Supreme Court of Canada. The Supreme Court will take weeks to consider whether it will hear Mr. Schreiber's appeal, likely allowing him to remain available for questioning by MPs.

The warrant issued by House Speaker Peter Milliken and sent to the RCMP and the federal ministers of justice, public safety and immigration, among others, was a “command” to keep Mr. Schreiber in Ottawa “until his attendance before that committee is no longer required.”

Mr. Schreiber spent the night at the Ottawa Regional Detention Centre. He was escorted Thursday morning by officers from an unmarked police car into the Parliament building.

“Canadian justice,” Mr. Schreiber called out, holding his shackled hands into the air, as he walked past reporters.

The committee's current plan is to hear again from Mr. Schreiber Tuesday at 11 a.m., and again Thursday. The committee recommended that Mr. Schreiber be placed under house arrest until his next appearance – a decision that now rests with the Speaker of the House.

Mr. Mulroney has been invited to appear the following week.

Prime Minister Stephen Harper said Wednesday that he would welcome Mr. Schreiber's appearance before the ethics committee and said he hopes that MPs interrogate him in a civilized fashion.

“I think we are all very interested to hear the testimony and do hope that those hearings tomorrow will be a credit to Parliament,” he said.

Mr. Harper has called a public inquiry into the Mulroney-Schreiber relationship for next year, saying he had to protect the office of the Prime Minister.

With reports from Daniel Leblanc, Jane Taber, Campbell Clark and Bill Curry