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Justice Jeffrey Oliphant releases his report on the business and financial dealings between Karlheinz Schreiber and former prime minister Brian Mulroney during a press conference in Ottawa on Monday May 31, 2010. (Sean Kilpatrick/The Canadian Press/Sean Kilpatrick/The Canadian Press)
Justice Jeffrey Oliphant releases his report on the business and financial dealings between Karlheinz Schreiber and former prime minister Brian Mulroney during a press conference in Ottawa on Monday May 31, 2010. (Sean Kilpatrick/The Canadian Press/Sean Kilpatrick/The Canadian Press)

Harper mum on revoking Mulroney deal Add to ...

The federal Justice Department took a keen interest in the Oliphant inquiry's stinging assessment of Brian Mulroney's sworn testimony when he sued the federal government in the mid-1990s, documents released under the Access to Information Act show.

When copies of Mr. Justice Jeffrey Oliphant's report started circulating through the department in May, a justice official analyzed the judge's findings about Mr. Mulroney's 1996 examination-for-discovery - when the former prime minister testified that he shared the occasional cup of coffee with lobbyist Karlheinz Schreiber, but didn't mention the envelopes of cash he took from the German-born businessman.

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The official scribbled impressions, written in French, in the margins of the report:

"Should have declared the money he received from Mr. Schreiber and his relationship with Mr. Schreiber during the... examination in 1996," one such note states.

"Was hiding," another note states.

But more than six months since Judge Oliphant declared that the former prime minister "failed to disclose appropriately the facts," the Conservative government remains steadfastly silent about what it intends to do about the $2.1-million given to Mr. Mulroney for his legal fees and public relations expenses.

Inquiries to Justice Minister Rob Nicholson about the settlement were returned by his spokeswoman, who declined to answer direct questions about the minister's views on trying to recover the funds.

"Justice Oliphant's report remains with the appropriate authorities," Pamela Stephens repeated in two separate e-mails. Two weeks ago in the House of Commons, Mr. Nicholson was asked by New Democrat MP Thomas Mulcair whether the government would try to set aside the settlement, yes or no? When Mr. Nicholson failed to specify, Mr. Mulcair shouted back at him: "Canadians are the victims here. They lost their two million bucks."

A phone call and e-mail to Mr. Mulroney's lawyer, Guy Pratte, were not returned. In June, Mr. Pratte wrote a letter to The Globe and Mail arguing that because Judge Oliphant found that Mr. Schreiber and Mr. Mulroney's cash dealings were not part of an illegal scheme to defraud the government, those who clamour for a return of the money "have no legal leg to stand on."

But Mr. Pratte's opinion has not stopped voters from turning to Mr. Nicholson, Prime Minister Stephen Harper, and most recently Facebook, demanding a return of the settlement money.

Included in the documents released to The Globe are a number of e-mails from citizens, their names redacted, to Mr. Nicholson and Mr. Harper. "The Justice Department should take every possible action to recover the funds," reads one letter. "Gentlemen," another person wrote to the Prime Minister and Mr. Nicholson, "please add my name to the list demanding Mulroney pay back the legal settlement including costs and interest."

There are six different Facebook groups devoted to Mr. Mulroney's settlement, all similarly named and making generous use of exclamation marks: "Mulroney, give back the money!" "I am one Canadian that would like my $2.1 million back Mr. Mulroney," and "Mulroney! We want our money back!!" are among the groups.

The lawsuit was sparked by a Justice Department letter to the Swiss government that asked for permission for the RCMP to access Mr. Schreiber's accounts at the Swiss Bank Corp. The letter accused the German lobbyist and Mr. Mulroney of conspiring to defraud the federal government in relation to the purchase of $1.8-billion worth of Airbus airplanes by Air Canada, which was a Crown corporation when the purchase agreement was made.

Mr. Mulroney sued the government for defamation. During his pre-trial examination, he testified that his relationship with Mr. Schreiber since leaving office consisted of meeting the lobbyist "once or twice" for a cup of coffee at Montreal's Queen Elizabeth hotel. He also declared, under oath: "I had never had any dealings with him."

Though Judge Oliphant was highly critical of Mr. Mulroney's 1996 sworn testimony, calling the former prime minister's excuses for not revealing the cash payments "patently absurd," he made no recommendation about whether the government should seek to set aside the settlement. The settlement was not part of the inquiry's terms of reference.

The Justice Department's review of the settlement in May is not the first time it has turned its attention to the $2.1-million. In February of 2006, shortly after CBC's the fifth estate broadcast an interview with Mr. Schreiber where the German lobbyist detailed how he handed cash in envelopes to the former prime minister, Brian Saunders, then an assistant deputy minister, drafted a memorandum about how the government might recover the funds. Mr. Saunders, who is now Canada's director of public prosecutions, noted that a settlement is like any contract, and can be set aside if "one party to the contract committed fraud on the other so as [to]vitiate the consent to contract of the latter party." But once again, the issue fizzled and no public decision about the settlement was ever announced.

William Kaplan, the lawyer and author who first revealed Mr. Mulroney's cash payments in 2003, said he doesn't expect the government to say either way what it plans to do about the settlement.

"It's a sad story from beginning to end. There's no doubt whatsoever that the government would have never entered into the settlement and paid the $2.1-million if they knew about Mr. Mulroney taking Mr. Schreiber's cash," Mr. Kaplan said.

Follow on Twitter: @McarthurGreg

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