Mulroney-Schreiber affair threatens PM's credibility

After campaigning for restitution of Liberal sponsorship spending, Harper will be pressed to make his mentor repay libel award.

OTTAWA, November 5, 2007: The Mulroney-Schreiber Affair could undo an enormous amount of the work Stephen Harper has done to establish himself and his credibility.

CBC News reported last week that former prime minister Brian Mulroney allegedly tried to hide cash payments of $300,000 that he received from arms dealer Karlheinz Schreiber, currently jailed in Toronto and facing extradition to Germany. The news program Fifth estate, broadcast an interview with Schreiber, who said Mulroney asked for a letter stating that "at no time did he ever solicit or receive" money from the German businessman.

Making matters worse are reports that Mulroney deliberately delayed reporting on the payments for tax purposes. Furthermore, reports that Schreiber made some of the cash payments in New York suggest Mulroney may have illegally brought the money into Canada from the US.

These reports fly in the face of the libel award Mulroney won in 1997 from the RCMP and the government. Under oath, Mulroney denied any dealings with Schreiber. He received a court-ordered government apology and a $2.1-million settlement. Now the opposition is calling, with some justification, for a public inquiry into the affair. The Harper government brands these calls as "political vendettas."

Mulroney's sworn statements about his association with Schreiber appear to have been proven false, however. This puts Harper, who has always championed government and political accountability, in a tough spot. After conducting a vigorous campaign for restitution of improperly-used Liberal sponsorship spending, he is in a poor position to argue that Brian Mulroney should not have to refund the $2.1 million awarded to him based on what increasingly appears to be perjury.

If, however, Harper is forced into an inquiry over Mulroney, it could kill the Conservative brand - again. Mulroney's unite-the-right politics of 25 years ago temporarily brought together western populists and Péquistes - before blowing up in a cataclysm that led directly to the formation of the Reform and Canadian Alliance parties and, ultimately, the end of the Progressive Conservative party, not to mention creating the Bloc Québéquois.

Despite some formidable political accomplishments, Mulroney became the most hated Canadian politician in a generation. With the publication of his memoirs and recent public appearances, he had been working to restore his image, with some success, until these recent revelations.

Harper has skillfully set many traps for his opponents, including bullying the Liberals into supporting the throne speech. Now he is caught in a trap of his own. If he calls an inquiry, as facts and precedent would appear to indicate he must, it could crucify Mulroney, his close political friend. In that scenario, Harper will take all the heat of guilt by association. If Harper stonewalls demands for an inquiry, he could lose the credibility he has worked so hard to build on the accountability file, while still suffering from his own close ties to both Mulroney and Mulroney's Quebec strategy.

Related individuals, organizations and significant events
Mulroney, Brian - former PM shaped current PM's thinking on Quebec and his politics
Accountability concern contrasts with past campaigns for corporate political influence

Harper Conservative vs. Public Values Frame
  Vendetta / Accountability
  Secrecy, payoffs / Openness

Links and sources
  Mulroney tried to cover up cash payments he received in hotel rooms: Schreiber, CBC News, October 31, 2007
  SCHREIBER REVELATIONS: Liberals push to recover Mulroney settlement, Globe and Mail, November 2, 2007
  Brian Mulroney: the payments and the taxman, Globe and Mail, October 31, 2007
  Arms dealer implicates Canadian ex-prime minister in cover-up, November 1, 2007, AFP
  Mulroney affair begs attention, Chantal Hébert, Toronto Star, Nov 05, 2007
  The sooner Mulroney speaks about Schreiber the better; We deserve answers from the man who once led us, Owen Sound Suntimes, Nov. 4, 2007

Posted: November 05, 2007

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