Karlheinz Schreiber returned to the Commons Ethics committee for the third time on Thursday, December 6. As with the two previous meetings (Nov 29 and Dec 4), the following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate. You can return to the beginning of this 'series,' by clicking here: Part I.
The Sweet Smell of Success Fees
11:16 AM
Thibault (LPC): Welcome. Like to explore the source of the 300K that you paid to BM. I'd also like have your thoughts on the public inquiry and why you'd like to have one--and why you think that others don't want one. In order to get to that, I have a few other questions. Yes or no. Mr. Schreiber, you said that the 300K paid to BM came out of the BRITAIN acct. Can you confirm that the BRITAIN acct came out of the FRANKFURT acct? Yes or no?
Schreiber: yes.
Thibault (LPC): Can you confirm that the FRANKFURT had funds that originated from International Aircraft Leasing (IAL) for which you were the trustee?
Schreiber: yes.
Thibault (LPC): Can you confirm that the funds ultimately ended up in the FRANKFURT acct came from "success fees" from projects involving MBB, Airbus and Thyssen?
Schreiber: yes.
Thibault (LPC): In 1985, IAL reached an agreement w/Thyssen that, and I quote, "in the event that the contract is signed regarding a plant in Bear Head island, a one time fee of $4 Million would be paid" and on Sept 27, 1988 you, along w/three ministers of the BM government signed an understanding in princ. to support the building of Thyssen's LAV facility in Cape Breton. And $4 million was paid to IAL as a result of the agreement?
Schreiber: yes.
Thibault (LPC): To be clear, this payment was made, even though the plant was never set up, is that correct?
Schreiber: yes.
Thibault (LPC): You said that you entered into an agreement w/BM at Harrington Lake to have him work for you. Did you expect the work to be done free of charge?
Schreiber: yes.
Thibault (LPC): You're telling us that the work that BM would be doing would be ultimately paid out of the money coming from Thyssen; your understanding at Harrington Lake was that BM would be working 'pro bono'--working for nothing?
Schreiber: No...
Thibault (LPC): He would be receiving some money?
Schreiber: sure.
Thibault (LPC): That was the understanding. While you didn't discuss the amount, the understanding was that BM would receive funds from you.
Schreiber: yes. I had to check first (to see) what was available. And I learned from the documents on the 'Fifth Estate' that I think, shortly after meeting at Harrington Lake--must have been 10 days--I opened an acct, transferred money reserved in FRANKFURT acct to the BRITAIN acct, which was for BM, related to Cape Breton for the (Bear Head) Project.
Thibault (LPC): You also stated last Thurs that the amount available for the project was 500K.
Schreiber: yes.
Thibault (LPC): Bank records show that you transferred 500K from FRANKFURT--> BRITAIN on July 26, 1993.
Schreiber: when you say so, but I investigated this before and the account was setup 10 or 15 days after.
Thibault (LPC): after having transferred the funds (to BRITAIN), the next day you withdrew 100K from BRITAIN and gave BM the money in Aug 1993. How did you know to transfer 500K to BRITAIN? More importantly, how did you know to bring 100K in cash to BM? Did somebody suggest that you bring the money in cash? (Ooooh! Good question.)
Schreiber: it was not specifically discussed, but when you see that the money was in the acct, I don't know if we would even be able to write a cheque, so I took it in cash--other days as well (the other two meetings w/BM).
Thibault (LPC): but you could have done a bank-->bank transfer to BM, if you wanted a record of the transaction...
Schreiber: yes, but at this time it was not even clear what was going to happen. BM said he was going to join a law firm or go into business or whatever. I expected, after he received the money, that he would send me a receipt and "I received this, and I wanted you to know I put it in a trust acct for such & such a company and I will bill for my services whenever the service is rendered..." (*pfffffttt* pardon me, while I clean the spit-water off of my monitor!)
Thibault (LPC): the two subsequent payments of 100K--I understand why, at that time BM would have been well established in business, but they were again, cash payments in hotels.
Schreiber: yes.
Thibault (LPC): what was that reason?
Schreiber: just the way I took the money out from over there...
Thibault (LPC): and it left no record of the transaction?
Schreiber: no.
Thibault (LPC): Is it fair to say from what you've said that the 500K was from "success fees" from Thyssen?
Schreiber: yes.
Thibault (LPC): in the total amount of $4 million?
Schreiber: yes.
Thibault (LPC): if you hadn't reached an agreement w/BM government, you'd have never received that $4 million?
Schreiber: no, but in fairness, this can be proven easily by Revenue Canada that for all the work GCI did for 8 years for our business as a lobbyist, they never sent a bill to Germany w/the exception of disbursements. In other words, it was always a success. This agreement, which was finally reached and signed with the government of Nova Scotia and Ottawa (DND) and others like ACOA, this agreement was part of an inquiry from the German dept. of Revenue and they audited the books from Thyssen and in files, somewhere, documents from meeting--it clearly says "Mr. Schreiber had an agreement w/Thyssen to establish this company in Canada and with the help of others." It's the understanding that one of the shareholders who is Mr. Frank Moores, who is going to disburse the money in Canada. So it is publicly known--nothing to hide on my side.
Thibault (LPC): the question here is--you transferred some money from IAL to FRANKFURT, the acct from which Moore & Associates would have ultimately been paid.
Schreiber: To be correct, I think I never transferred any money from IAL to that acct b/c--and this is another lie in the whole thing, "Schreiber owns IAL"--which is not true. The money was transferred from Mr. Pelossi to my acct, which I control, b/c nobody should know who finally gets the money.
Thibault (LPC): But ultimately the money was transferred to the FRANKFURT acct?
Schreiber: yes
Thibault (LPC): and from the FRANKFURT, 500K was transferred to the BRITAIN...
Schreiber: absolutely
Thibault (LPC): which was the money you had available for BM
Schreiber: yes, which has been left for Bear Head Project (BHP)
Thibault (LPC): so that's not money that was part of the payment to Frank Moores and his associates?
Schreiber: normally, if the whole program had not been cancelled or crashed, that money would have been paid to GCI
Thibault (LPC): but the money went to BM
Schreiber: I kept it b/c there wasn't anything delivered (services) from GCI. That is why Frank Moores and others were mad at BM.
Thibault (LPC): just to reiterate, the existence of the $4 million was due to an agreement signed by the governments of Nova Scotia and Canada?
Schreiber: yes
Thibault (LPC): why did you want this public inquiry and why do you think others would be concerned about an inquiry?
Schreiber: I thought that everything was simple and proper and then later I became suspicious. When I started lawsuits in Alberta (to find out the truth), I got blocked all the time until today. There are two ways (to get to the truth)--the courtroom or a public inquiry. When people have to testify under oath, others can identify when you commit perjury. This case is not a case w/documents and agreements; here you have to believe quite a few witnesses (i.e. take them at their word?). And that's the main thing in this business, in this world.
Szabo (chair, LPC): that's your time, thank you.
Continue to Part III ("What happens in Switzerland, stays in Switzerland"), or return to Part I ("Who's Afraid of a Big, Bad Inquiry?").
The Sweet Smell of Success Fees
11:16 AM
Thibault (LPC): Welcome. Like to explore the source of the 300K that you paid to BM. I'd also like have your thoughts on the public inquiry and why you'd like to have one--and why you think that others don't want one. In order to get to that, I have a few other questions. Yes or no. Mr. Schreiber, you said that the 300K paid to BM came out of the BRITAIN acct. Can you confirm that the BRITAIN acct came out of the FRANKFURT acct? Yes or no?
Schreiber: yes.
Thibault (LPC): Can you confirm that the FRANKFURT had funds that originated from International Aircraft Leasing (IAL) for which you were the trustee?
Schreiber: yes.
Thibault (LPC): Can you confirm that the funds ultimately ended up in the FRANKFURT acct came from "success fees" from projects involving MBB, Airbus and Thyssen?
Schreiber: yes.
Thibault (LPC): In 1985, IAL reached an agreement w/Thyssen that, and I quote, "in the event that the contract is signed regarding a plant in Bear Head island, a one time fee of $4 Million would be paid" and on Sept 27, 1988 you, along w/three ministers of the BM government signed an understanding in princ. to support the building of Thyssen's LAV facility in Cape Breton. And $4 million was paid to IAL as a result of the agreement?
Schreiber: yes.
Thibault (LPC): To be clear, this payment was made, even though the plant was never set up, is that correct?
Schreiber: yes.
Thibault (LPC): You said that you entered into an agreement w/BM at Harrington Lake to have him work for you. Did you expect the work to be done free of charge?
Schreiber: yes.
Thibault (LPC): You're telling us that the work that BM would be doing would be ultimately paid out of the money coming from Thyssen; your understanding at Harrington Lake was that BM would be working 'pro bono'--working for nothing?
Schreiber: No...
Thibault (LPC): He would be receiving some money?
Schreiber: sure.
Thibault (LPC): That was the understanding. While you didn't discuss the amount, the understanding was that BM would receive funds from you.
Schreiber: yes. I had to check first (to see) what was available. And I learned from the documents on the 'Fifth Estate' that I think, shortly after meeting at Harrington Lake--must have been 10 days--I opened an acct, transferred money reserved in FRANKFURT acct to the BRITAIN acct, which was for BM, related to Cape Breton for the (Bear Head) Project.
Thibault (LPC): You also stated last Thurs that the amount available for the project was 500K.
Schreiber: yes.
Thibault (LPC): Bank records show that you transferred 500K from FRANKFURT--> BRITAIN on July 26, 1993.
Schreiber: when you say so, but I investigated this before and the account was setup 10 or 15 days after.
Thibault (LPC): after having transferred the funds (to BRITAIN), the next day you withdrew 100K from BRITAIN and gave BM the money in Aug 1993. How did you know to transfer 500K to BRITAIN? More importantly, how did you know to bring 100K in cash to BM? Did somebody suggest that you bring the money in cash? (Ooooh! Good question.)
Schreiber: it was not specifically discussed, but when you see that the money was in the acct, I don't know if we would even be able to write a cheque, so I took it in cash--other days as well (the other two meetings w/BM).
Thibault (LPC): but you could have done a bank-->bank transfer to BM, if you wanted a record of the transaction...
Schreiber: yes, but at this time it was not even clear what was going to happen. BM said he was going to join a law firm or go into business or whatever. I expected, after he received the money, that he would send me a receipt and "I received this, and I wanted you to know I put it in a trust acct for such & such a company and I will bill for my services whenever the service is rendered..." (*pfffffttt* pardon me, while I clean the spit-water off of my monitor!)
Thibault (LPC): the two subsequent payments of 100K--I understand why, at that time BM would have been well established in business, but they were again, cash payments in hotels.
Schreiber: yes.
Thibault (LPC): what was that reason?
Schreiber: just the way I took the money out from over there...
Thibault (LPC): and it left no record of the transaction?
Schreiber: no.
Thibault (LPC): Is it fair to say from what you've said that the 500K was from "success fees" from Thyssen?
Schreiber: yes.
Thibault (LPC): in the total amount of $4 million?
Schreiber: yes.
Thibault (LPC): if you hadn't reached an agreement w/BM government, you'd have never received that $4 million?
Schreiber: no, but in fairness, this can be proven easily by Revenue Canada that for all the work GCI did for 8 years for our business as a lobbyist, they never sent a bill to Germany w/the exception of disbursements. In other words, it was always a success. This agreement, which was finally reached and signed with the government of Nova Scotia and Ottawa (DND) and others like ACOA, this agreement was part of an inquiry from the German dept. of Revenue and they audited the books from Thyssen and in files, somewhere, documents from meeting--it clearly says "Mr. Schreiber had an agreement w/Thyssen to establish this company in Canada and with the help of others." It's the understanding that one of the shareholders who is Mr. Frank Moores, who is going to disburse the money in Canada. So it is publicly known--nothing to hide on my side.
Thibault (LPC): the question here is--you transferred some money from IAL to FRANKFURT, the acct from which Moore & Associates would have ultimately been paid.
Schreiber: To be correct, I think I never transferred any money from IAL to that acct b/c--and this is another lie in the whole thing, "Schreiber owns IAL"--which is not true. The money was transferred from Mr. Pelossi to my acct, which I control, b/c nobody should know who finally gets the money.
Thibault (LPC): But ultimately the money was transferred to the FRANKFURT acct?
Schreiber: yes
Thibault (LPC): and from the FRANKFURT, 500K was transferred to the BRITAIN...
Schreiber: absolutely
Thibault (LPC): which was the money you had available for BM
Schreiber: yes, which has been left for Bear Head Project (BHP)
Thibault (LPC): so that's not money that was part of the payment to Frank Moores and his associates?
Schreiber: normally, if the whole program had not been cancelled or crashed, that money would have been paid to GCI
Thibault (LPC): but the money went to BM
Schreiber: I kept it b/c there wasn't anything delivered (services) from GCI. That is why Frank Moores and others were mad at BM.
Thibault (LPC): just to reiterate, the existence of the $4 million was due to an agreement signed by the governments of Nova Scotia and Canada?
Schreiber: yes
Thibault (LPC): why did you want this public inquiry and why do you think others would be concerned about an inquiry?
Schreiber: I thought that everything was simple and proper and then later I became suspicious. When I started lawsuits in Alberta (to find out the truth), I got blocked all the time until today. There are two ways (to get to the truth)--the courtroom or a public inquiry. When people have to testify under oath, others can identify when you commit perjury. This case is not a case w/documents and agreements; here you have to believe quite a few witnesses (i.e. take them at their word?). And that's the main thing in this business, in this world.
Szabo (chair, LPC): that's your time, thank you.
Continue to Part III ("What happens in Switzerland, stays in Switzerland"), or return to Part I ("Who's Afraid of a Big, Bad Inquiry?").
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