OTTAWA - The RCMP was given detailed allegations of a plan to reward Brian Mulroney with kickbacks on the sale of Airbus aircraft just nine months before the Canadian government awarded the former prime minister $2.1 million in a libel settlement.
Giorgio Pelossi, the Swiss accountant for Karlheinz Schreiber, says he provided six hours of taped testimony to the Mounties in March 1996, laying out what Schreiber had told him of the alleged scheme to reward Mulroney for Air Canada's purchase of $1.8 billion worth of Airbus jets.
Pelossi said he also gave the Mounties evidence that he'd helped set up secret Swiss bank accounts in which to deposit the kickbacks to Mulroney and Frank Moores, an influential lobbyist and former premier of Newfoundland.
But, as Pelossi told the Commons ethics committee Thursday, he doesn't know if any Airbus money was actually ever paid to the former prime minister.
The committee is investigating Mulroney's dealings with Schreiber, including the libel settlement Mulroney negotiated in January 1997 as a result of the public disclosure of the RCMP's investigation into possible Airbus corruption.
The committee has learned the Mounties never interviewed Schreiber until after Mulroney's libel case was settled.
On Thursday, some MPs were startled to learn that Pelossi had made specific allegations months earlier.
"Here we have someone who was interviewed by the RCMP for six hours 12 years ago, gave them chapter and verse, had all his documents with him -- and they still never met with Schreiber until (after) the settlement with Mulroney,'' said an incredulous New Democrat MP Thomas Mulcair.
"Either they sent in Inspector Clouseau to do this investigation in Europe, or they've got a lot of explaining to do.''
Pelossi was Schreiber's money manager from 1969 until the two had a major financial dispute in 1991. He went on to become the star witness for German investigators in a government bribery scandal that tarnished longtime chancellor Helmut Kohl and his Christian Democrat party.
Schreiber was charged with tax evasion in 1997, and he's been fighting extradition from Canada to Germany to face those charges since 1999.
Pelossi, speaking to the committee by video conference from Switzerland, appeared surprised that parliamentarians did not have a copy of his 1996 police interview.
But committee chairman Paul Szabo said the Mounties refused to hand over the tape, indicating to him it may become evidence if their long-dead Airbus investigation is ever revived.
Mulcair said the chain of events calls into question the recent assertion by David Johnston -- chosen by Prime Minister Stephen Harper to set terms of reference for a public inquiry into the matter -- that the Airbus saga is "well-tilled ground.''
Pelossi's testimony, while largely hearsay, provided more details on the alleged kickback scheme than has been generally reported.
He said he personally signed the contract with Airbus Industrie chairman Franz Josef Strauss that directed about 1.5 per cent of the $1.8-billion jet sale into a secret slush fund paid to a Schreiber company.
Of those secret commissions, Pelossi says Schreiber told him 25 per cent was to go to Mulroney, 25 per cent to lobbyist Frank Moores, and another cut to Strauss.
But Pelossi said he had no direct knowledge whether Schreiber ever paid Mulroney any kickback money, because it didn't appear to have gone through a bank account set up for the purpose.
"Mr. Schreiber told me from the beginning that if the deal with Airbus will be done, it's through the lobbying of Mr. Moores and the help of Mr. Mulroney,'' Pelossi said.
"At the time we set up the (Swiss) account, he told me that if the deal with Airbus will be done, he will have to give 25 per cent to Mr. Moores and 25 per cent to Mr. Mulroney.
"I know now that he didn't, but it was supposed to.''
Pelossi was emphatic the Swiss account was for Moores and Mulroney, despite later claims by Moores -- since deceased -- that the B.M. initial on a bank document represented his wife, Beth Moores.
Pelossi flatly denied this assertion, saying he personally wrote the BM initials and didn't know Beth Moores at the time.
Asked directly whether he knew of any Schreiber payments to Mulroney, Pelossi said he did not.
"Initially I thought he was going to be putting them into these accounts, but he put very little money into those accounts,'' said the Swiss accountant. "He was used to paying things in cash.
"I was never involved when he was distributing the money. He did that secretly, he did that by himself.''
Under questioning from committee members, Pelossi acknowledged that most of what he was telling them was based on what Schreiber told him and Schreiber, he said, "lied all the time.''
"He's still lying,'' Pelossi added.
Conservative MPs on the committee leapt on this characterization to suggest nothing Schreiber told Pelossi could be believed.
Tory MP Russ Heibert emerged from the hearing to announce that Pelossi had said nothing new.
"We've had no new evidence from any of the witnesses in the last number of weeks that would substantiate any of the concerns this committee has,'' said Heibert.
But asked whether he was aware the RCMP was told in 1996 about an alleged 25 per cent Airbus commission for Mulroney, Heibert responded: "I had not heard that before.''
Pelossi's allegations actually came to light through a German investigation and were reported in 2001 in "The Last Amigo,'' the investigative book on the Airbus saga by journalists Stevie Cameron and Harvey Cashore.
Cameron appeared later Thursday at the committee, where she readily acknowledged she had no additional evidence beyond what was in her books.
When Heibert told her he hadn't read them, Cameron shot back: "You have a treat ahead of you.''
Despite furious condemnations of her work by Mulroney, Cameron noted that the facts in her books have never faced legal action by the litigious former prime minister or anyone else.
Cameron also noted she relied heavily on international experts in forensic accounting to detail the Airbus money trail, and suggested the Mounties simply don't have the know-how to pursue such a complex case.
"I don't think the RCMP could get to the bottom of this,'' she said.
Cameron said she was surprised to learn after the fact that the RCMP had designated her an informant on the Airbus affair. She told the committee she only provided information to the police that was already in the public domain.
