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Winnipeg Free Press - PRINT EDITION

Inquiry ready to hear evidence

Mulroney's link to dealer probed

By: Jim Brown

Posted: 03/27/2009 1:00 AM | Comments: 0 (including replies)

Justice Oliphant

OTTAWA -- A public inquiry is finally ready -- nine months after it was created -- to start hearing evidence on the business relations between former Conservative prime minister Brian Mulroney and German-Canadian arms dealer Karlheinz Schreiber.

The first witness to testify Monday will be Bill McKnight, who was defence minister in Mulroney's cabinet when German-based Thyssen AG proposed to build a plant in Cape Breton to manufacture light-armoured vehicles, a deal that never came to fruition but which lies at the heart of the inquiry.

McKnight will be followed by Marc Lalonde, a Liberal minister in the days of Pierre Trudeau, who later became a friend and business associate of Schreiber.

The inquiry will hear Tuesday from Derek Burney, a one-time Mulroney chief of staff and Beth Moores, the widow of former Newfoundland premier and Mulroney confidant Frank Moores.

All are expected to provide preliminary information to set the scene for subsequent work by Justice Jeffrey Oliphant. The crucial part of the judge's investigation won't begin until April 14, when Schreiber is to testify.

Oliphant cleared the way Thursday for the hearings by issuing the last of a series of procedural rulings laying out legal ground rules for the probe.

In response to concerns raised repeatedly by Mulroney's lawyers, Oliphant once again offered assurances that he has no intention of holding anybody criminally or civilly liable.

Moreover, he said, if he suspects any ethical shortcomings by Mulroney he will give the former prime minister a "full opportunity to respond before any report is issued."

Throughout the brief ruling, Oliphant took pains to emphasize he has yet to judge the issues before him. "My conclusions will be based on the facts that are established in the evidence yet to come."

Guy Pratte, the lead counsel for Mulroney, said he had no plans to challenge it in Federal Court.

In earlier skirmishing, Oliphant rejected a claim that the only proper yardstick for measuring Mulroney's conduct was the cabinet ethics code he himself established in 1985.

In a ruling last month, the judge said he must also be free to take account of the ethics provisions in federal statutes such as the Parliament of Canada Act, the Financial Administration Act and the Income Tax Act. He initially included the Criminal Code in the list as well, but had second thoughts about that Thursday. "Upon reflection I must state that the Criminal Code is of little if any value in this endeavour," Oliphant said.

Mulroney says he accepted $225,000 from Schreiber after stepping down as prime minister in 1993 to promote the Thyssen project.

Schreiber says the deal was struck before Mulroney left office. He also claims the payments totalled $300,000.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition March 27, 2009 A17

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