Airbus affair
Airbus affair
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Airbus affair

The Airbus affair refers to allegations of secret commissions paid to Prime Minister Brian Mulroney and other members of his ministry in exchange for then-crown corporation Air Canada's purchase of a large number of Airbus jets. The Chairman of Airbus (a European consortium) at the time of the contract competition was Franz Josef Strauss (1915–1988), a high-profile German politician in Bavaria.

The order in question had long been pending, and both Boeing and Airbus had been competing heavily for the contract. Both offered shared production in Canada, and Boeing went so far as to buy de Havilland Canada to further strengthen their bargaining position, as well as gain access to the feederliner market where they, at that time, had no presence. The contract was eventually won by Airbus in 1988, with an order for 34 Airbus A320s, as well as the sale of some of Air Canada's existing Boeing 747 fleet. Boeing immediately put de Havilland up for sale, thereby putting that company in jeopardy, but the blame for this was generally placed on the government.

In 1995, the Royal Canadian Mounted Police (RCMP) accused Mulroney and Frank Moores of accepting kickbacks from Karlheinz Schreiber on the sale of Airbus airplanes to the government-owned airline during Mulroney's time as Prime Minister of Canada. The allegations were made in a letter sent by the RCMP to the government of Switzerland seeking access to banking records. Schreiber had earlier raised money for Mulroney's successful 1983 bid to win the leadership of the Progressive Conservative Party.

Mulroney denied the allegations, and launched a $50 million defamation suit against the Canadian government, alleging that the newly elected Liberal government of Jean Chrétien was engaging in a smear campaign against its predecessor. The government settled out of court in early 1997, and agreed to publicly apologize to Mulroney, as well as paying the former prime minister's $2.1 million legal fees.

Although there is no evidence that Mulroney accepted kickbacks while prime minister, he acknowledged in 2003 that shortly after stepping down in 1993 that he accepted $225,000 over 18 months from Schreiber, in three cash payments of $75,000 each. Mulroney was still a member of the House of Commons of Canada when one of the payments was made. Mulroney claims that this money was paid to him for consulting services he rendered to help promote a fresh pasta business, and to develop international contacts for Schreiber. Mulroney had previously not admitted accepting any commissions from Schreiber during his lawsuit against the Canadian government, and later under oath specifically denied any business dealings with him. Mulroney did not provide evidence of any work he performed for that money, and declared it as income to Revenue Canada only years later, when Schreiber had come under criminal investigation in Germany. Schreiber ridiculed their dealings in pasta-macaroni as nothing more than being sent a single flyer, and has stated that the three separate payments were actually $100,000 each in $1000 bills, a total of $300,000.

Journalist Stevie Cameron wrote about the scandal, and Schreiber's links to the Mulroney government, in her 1994 best-selling book On the Take: Crime, Corruption and Greed in the Mulroney Years. The CBC's The Fifth Estate produced a documentary in March 1995 which revealed a secret side agreement between Airbus and a Liechtenstein shell company, International Aircraft Leasing (IAL), which received millions of dollars in secret commissions after the sale of Airbus aircraft to Air Canada. William Kaplan responded to Cameron and the CBC in his 1998 book Presumed Guilty, criticizing journalists for lacking evidence.

In October 1999, The Fifth Estate obtained Swiss Bank Corporation records which revealed that Schreiber had set up a secret bank account in Zürich with the code-name "BRITAN", from which three cash withdrawals totaling $300,000 were made in 1993 and 1994. Two years later, Cameron and Fifth Estate producer Harvey Cashore wrote a book about Schreiber called The Last Amigo. In 2004, Kaplan clarified his position in a further book, A Secret Trial, by criticizing Cameron for her role as a confidential RCMP informant on the Airbus matter, and Mulroney for not disclosing the fact that he had received the $300,000 from Schreiber.

On February 8, 2006, Schreiber stated in a Fifth Estate interview that the money from the "BRITAN" account came at the request of a Mulroney aide, who told him the former prime minister was short of funds. Schreiber mocked Mulroney's claim that the money was a consulting fee for help given in a pasta business Schreiber had invested in. The programme also reported there was no evidence that Mulroney knew of the source of the funds. The following year, The Globe and Mail and The Fifth Estate revealed that Brian Mulroney filed a voluntary disclosure with Revenue Canada several years after accepting the cash envelopes from Schreiber.

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