It would be a travesty of justice for the Conservative government to boot Karlheinz Schreiber out of Canada before the end of public hearings on his financial dealings with former prime minister Brian Mulroney, the head of the inquiry says.
Mr. Justice Jeffrey Oliphant, in a ruling Wednesday, acknowledged he has no legal power to stave off Mr. Schreiber's extradition to Germany, where he's wanted on charges of fraud, bribery, corruption and tax evasion.
But the judge strongly urged Justice Minister Rob Nicholson to hold off on any removal order, at least until the end of hearings on June 22 or 23.
The recommendation came as Mr. Schreiber's lawyers announced they had also filed a separate action in Ontario Court of Appeal raising new legal arguments against extradition.
No date has been set for a hearing in that case, but if the court agrees to deal with the matter it could mean a further delay in deciding Mr. Schreiber's fate.
Judge Oliphant steered clear of any comment on the court case, the latest round in a legal battle that has been going on for nearly a decade.
He made it clear, however, that he wants Mr. Nicholson to avoid any action against Mr. Schreiber until the inquiry has gathered all its evidence.
Mr. Schreiber is entitled to be on hand to follow the remaining three weeks of proceedings and to instruct his counsel on legal strategy, Judge Oliphant said.
"Out of an abundance of fairness, procedurally and in terms of natural justice, it would be a travesty to remove Mr. Schreiber from Canada while the commission is still at work."
There was no immediate comment from Mr. Nicholson's office.
Yanick Landry, a lawyer for the Justice Department, also dodged the issue in his submissions to Judge Oliphant, saying only that the minister appreciates the "important public interests" at stake in the inquiry and will take them into account in any decision.
The main focus of Judge Oliphant's work has been the so-called Bear Head project which would have seen the German firm Thyssen AG set up a plant in Canada to build and export light-armoured vehicles.
Mr. Schreiber says he paid Mr. Mulroney $300,000 to lobby for the project in 1993-94 after he left office. Mr. Mulroney says the payments totalled $225,000, the sum he declared for tax purposes.
Under a deal negotiated by his lawyers, however, the former Tory prime minister ended up paying tax on just half the income - even though he waited six years to report the money he'd received in cash-stuffed envelopes.
Judge Oliphant is to hear final submissions on factual issues next week, then hold four days of hearings over the following two weeks on broader issues of federal ethics policy.
The deadline for a final report to Prime Minister Stephen Harper is Dec 31, and the judge has not suggested Mr. Schreiber should stay in Canada until then.
But he said Wednesday the 75-year-old businessman should at least be in Ottawa for the rest of the public sittings.
"It is my hope, indeed my expectation, that the minister will see his way fit not to surrender Mr. Schreiber until the work of the commission is concluded," Judge Oliphant said.
Mr. Schreiber testified for four days and was scheduled to appear for a fifth, until he was excused from further questioning because he's recovering from gall bladder surgery.
Mr. Nicholson ruled last year that Mr. Schreiber could stay in Canada long enough to give evidence at the inquiry. But with his testimony now complete, his lawyers fear he could be hustled out of the country any time the minister chooses.
Mr. Nicholson refused to clarify his intent in a recent exchange of letters with Edward Greenspan, the head of Mr. Schreiber's legal team. The minister has also failed to address fresh legal issues raised in the same correspondence, Mr. Greenspan says.
He contends that a recent Ontario Court of Appeal ruling in another case has cast doubt on the legality of the proceedings against Mr. Schreiber. He argues as well that the German-Canadian extradition treaty was never properly ratified by Parliament.
Mr. Greenspan has asked the Ontario appeal court, in paper filed this week, to quash the current extradition order and to ensure Mr. Schreiber remains in the country until the matter is settled.