Mulroney sues police over bribery allegations

HUGH WINSOR

Ottawa

Brian Mulroney, the former Canadian prime minister, has announced he is launching a C$50m (pounds 24m) libel suit against the Canadian government and the Royal Canadian Mounted Police because they have named him in an investigation into possible bribery involving the purchase by Air Canada of 34 passenger jets from Airbus Industrie.

At the time of the purchase in late 1980s, Air Canada was a state-owned airline and its equipment procurement plans had to be approved by the Cabinet. Mr Mulroney was Prime Minister from 1984 to 1993, after which his Conservative Party evaporated at the polls.

In a statement issued at the weekend, Mr Mulroney confirmed he had been named in a request from the Canadian Justice Department to Swiss authorities for help in the investigation of an alleged criminal conspiracy. The request also asked the Swiss to freeze several bank accounts in Zurich and to permit the RCMP access to them.

But Mr Mulroney denied he had ever attempted to influence Air Canada's purchasing decision and said he had never received any money from anyone in connection with the Airbus deal. He also said he holds no bank account in Switzerland or anywhere else outside Canada.

The former prime minister is claiming C$25m in personal damages and C$25m punitive damages which he has said he would give to charity if the suit was successful. There are no precedents, however, for anyone successfully suing the RCMP for including him in a criminal investigation.

There have been rumours about commissions paid on the Air Canada purchase of the Airbus 320s ever since the Airbus consortium beat Boeing for the contract when Canada's largest airline decided to re-equip its short-haul fleet. The rumours have always circulated about the role of Frank Moores, a close Mulroney associate, formerly the Newfoundland premier and once a Conservative MP in Ottawa.

Mr Moores was one of the main financial backers of Mr Mulroney's successful bid for the Conservative Party leadership in 1983. After Mr Mulroney led his party to victory, Mr Moores established a consultancy firm in Ottawa to lobby the government. He maintained his access to the prime minister.

Mr Mulroney had appointed Mr Moores to the board of directors of Air Canada but he was forced to resign when it became known he was lobbying for Wardair, one of Air Canada's competitors, at the same time.

As well as the Airbus deal, there was a pattern of close links between the Mulroney government and business supporters of the Conservative Party. In one case Mr Mulroney pushed through a deal which would have turned over the operation of Toronto airport to a company headed by a former president of the Conservative Party.

In the case of the Airbus purchase, investigators for a CBC television programme traced C$17m in commissions on the C$1.8bn purchase to a Lichtenstein- based company whose principal, Karl Heinz Schreiber, is an associate of Mr Moores.

The CBC also said Mr Schreiber accompanied Mr Moores to Zurich, where two accounts were opened, one for Mr Moores and one in the name of Devon, the name of the Montreal street where Mr Mulroney used to live before becoming prime minister.

In his libel suit, Mr Mulroney claims that "the false and reckless allegations" in the Justice Department request damaged his personal reputation and have "besmirched and distorted the good name of Canada."