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With a wave and a smile, Karlheinz Schreiber leaves court in Augsburg, Germany, to begin his prison sentence. (TIMM SCHAMBERGER/AFP/GETTY IMAGES)
With a wave and a smile, Karlheinz Schreiber leaves court in Augsburg, Germany, to begin his prison sentence. (TIMM SCHAMBERGER/AFP/GETTY IMAGES)

Questions left unanswered as Schreiber jailed for 8 years Add to ...

Karlheinz Schreiber, the German-Canadian businessman at the centre of the Airbus scandal for the past 15 years, has been sentenced to eight years in a German prison for tax evasion.

Mr. Schreiber, whose revelations kept Airbus bubbling back into the public consciousness at regular intervals, was found guilty of withholding about $10-million from the German government between 1988 and 1993, a period before the Canadian controversy had even begun to surface. The money was gleaned as kickbacks from sales of armoured cars, helicopters and aircraft around the world, some of which took place in Canada, prosecutors alleged.

He was also a central figure in a funding scandal that forced former German chancellor Helmut Kohl to resign his post as honorary party leader after he admitted his party accepted illegal party donations - some from Mr. Schreiber.

In handing down the sentence, Judge Rudolf Weigell described Mr. Schreiber as "the type of person only concerned with his own advantage, who will bribe anyone and anything if things aren't going to plan, and who will cheat the tax man in any way he can."

Prosecutors had asked for 9 1/2 years in prison. Mr. Schreiber is expected to appeal what is considered by some experts to be a long sentence for a tax breach.

One of Mr. Schreiber's Canadian lawyers, Robert Hladun, said from Edmonton that he felt the sentence was "very harsh." He said he hoped the imposition of such a long term was not politically motivated because in the German case "politics did seem to be playing a very large part of what was going on."

It took the German government a decade to get Mr. Schreiber back in the country to face the tax charges, which originally included broader allegations of bribery and fraud that were later dropped.

He was arrested by the RCMP at a Toronto hotel on Aug. 31, 1999, at the request of German authorities, but numerous appeals and court challenges kept him in Canada. He made application to the minister of justice on several occasions, sought a judicial review of those decisions at the Ontario Court of Appeal, and even took his case to the Supreme Court. His last appeals ran out last summer and he was finally flown to Germany on Aug. 2, 2009.

"In some ways, this is the end of the road," said Harvey Cashore, a journalist who has just released a book on his 15-year investigation of the Airbus affair. "Schreiber is 76 and an eight-year sentence is long for anybody."

Still, Mr. Cashore said, "there are a lot of secrets out there about this scandal. We still know there are millions in shmiergelder [grease money]unaccounted for, but it is looking more and more like German and Canadian institutions don't want to find out any more about it."

Mr. Schreiber's rise to notoriety in Canada began in 1995, when he was named in a letter sent by Ottawa to Swiss authorities. The Justice department and the RCMP said they needed help looking at bank accounts because of suspicions Mr. Schreiber had been paid secret commissions on the sale of Airbus aircraft to Air Canada, then a Crown corporation. The letter alleged that some of that money was channelled to former prime minister Brian Mulroney and former lobbyist Frank Moores to ensure Airbus got the contract.

Mr. Mulroney sued for libel, and won a settlement from the government that included an apology and the payment of his legal fees.

Over the following years, Mr. Schreiber made several allegations. In 2007, he said he had given Mr. Mulroney $300,000 in cash in 1993 and 1994, and that the former prime minister waited six years to declare the income to tax authorities. Mr. Mulroney acknowledged $225,000 in payments, and said they were for legitimate work.

In late 2007, Prime Minister Stephen Harper ordered a probe into the business dealings between Mr. Schreiber and Mr. Mulroney, to be led by Mr. Justice Jeffrey Oliphant, but the terms of reference prevented the judge from looking into the Airbus affair.

Mr. Schreiber's testimony at the inquiry helped delay his extradition.

With Mr. Schreiber in jail in Germany, one significant question is still unanswered, said William Kaplan, a lawyer and author who has written extensively about the Airbus affair. "The only question that really matters in this country … is never going to be answered: Were there payoffs made in Airbus, and if so who got them?"

Mr. Schreiber's conviction did not get any closer to answering that, Mr. Kaplan said. Even the report of the Oliphant inquiry, expected to be released at the end of the month, will likely "not tell us anything we didn't already know," he said.

With reports from Reuters and The Associated Press

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