OTTAWA - Karlheinz Schreiber orchestrated a campaign of misinformation, threats and even "blackmail" in an effort to stave off extradition to Germany on criminal charges, a public inquiry heard Friday.
The accusations came from Guy Pratte, lawyer for former prime minister Brian Mulroney, who contended that Schreiber's over-riding goal for the last two years has been to delay his "check-out time from Canada."
The testy words came as Pratte grilled the German-Canadian businessman on his motives for filing a civil suit against Mulroney in late 2007 -- a legal action that sparked a political storm and ultimately led to creation of the inquiry headed by Justice Jeffrey Oliphant.
"I'm suggesting to you that the only reason you were seeking a public inquiry ... was to try to justify an extension of your stay in Canada," said Pratte. "That was the real purpose, it had nothing to do with the public interest."
Schreiber agreed he has long sought an inquiry, and conceded at one point that he was willing to "do everything" to get one.
But he rejected the suggestion that his only motive was to put off a trial in Germany, where he faces charges of fraud, bribery and evasion of an estimated $45 million in taxes.
"No," Schreiber calmly told Pratte, noting that many others, including both opposition and Conservative politicians, have also called for an inquiry.
At the heart of the current probe is Schreiber's claim that he paid Mulroney $300,000 after he stepped down as prime minister to lobby for a project to build German-designed armoured vehicles in Canada.
Mulroney has admitted taking money from Schreiber but says it was $225,000. He also claims his lobbying was aimed at foreign political leaders, not Canadian officials, and thus did not violate federal ethics rules.
The issue crystallized in November 2007 when Schreiber filed suit seeking reimbursement of his money, on grounds that Mulroney didn nothing to earn it.
Over the last two days, Pratte has elicited a series of admissions from Schreiber that various parts of the affidavit he swore in support of the suit were inaccurate.
The latest example came Friday when Schreiber conceded he had attributed comments to Mulroney that were actually conveyed to him by an intermediary -- mutual friend and former Tory cabinet minister Elmer MacKay.
Pratte also pointed to a May 2007 letter in which Schreiber gave Mulroney a "last warning" that it was time to settle their differences in a "peaceful and satisfactory" manner.
Failing that, Schreiber said, he would be prepared to disclose potentially embarrassing details of their past business relations.
"That letter is a blackmail letter, is it not," said Pratte. "It's a threat."
Replied Schreiber: "You can call it whatever you want."
Schreiber, who testified for four straight days this week, is expected to be recalled next month. Mulroney is also due to appear in May, but in the meantime the inquiry will move on to other witnesses.
The session Friday was marked by a brief show of irritation from Oliphant when Pratte and Schreiber got caught up in the legal complications arising from earlier hearings before the House of Commons ethics committee.
Schreiber referred repeatedly to the committee evidence until the judge finally interrupted to ask him to stop.
Oliphant noted that Parliament had refused to relinquish its privilege over the testimony, and thus it couldn't be used at the inquiry.
"I didn't want to challenge that because it would have got us into the Federal Court and we'd be here forever and a day waiting to get it resolved," said Oliphant.
"I am at least as frustrated as you are with this," Schreiber replied.
The inquiry is expected to cost more than $14 million, and Oliphant's final report isn't due until Dec. 31, some 25 months after Prime Minister Stephen Harper first promised an investigation.
Justice Minister Rob Nicholson agreed last year to postpone extradition and let Schreiber stay in Canada to participate in the probe.
