Karlheinz Schreiber - Role in Canada

Role in Canada

Schreiber set up trust accounts in Alberta for wealthy Germans in the early 1980s; among the people he served was Franz Josef Strauss, who had been premier of Bavaria. Strauss became chairman of Airbus Industries, a European consortium, in the 1980s, and saw Air Canada award a large contract of C$1.8 billion (CDN), for new planes, to Airbus, winning over the bid from Boeing (theretofore the supplier for Air Canada), shortly before his death in 1988.

The National Post reported on December 11, 2007, that in 1979 Alberta premier Peter Lougheed had rejected any business contact with Schreiber, according to Lee Richardson, who was then an aide to Lougheed, and is now a federal Member of Parliament.

Schreiber obtained his Canadian citizenship in 1982, and also retained his (West) German citizenship, so he is a citizen of both countries. He was based in Calgary during his early years in Canada, but moved his main liaison activities to Montreal in the early 1980s.

Schreiber was a key figure in Canada's Airbus affair, in which he was alleged to have arranged secret commissions to be paid to Brian Mulroney and lobbyist Frank Moores in exchange for then Crown corporation Air Canada's purchase of Airbus jets. There has never been any evidence produced to substantiate this allegation. Both Schreiber and Mulroney deny such is the case.

Mulroney sued the government of Canada for libel, and in early 1997 received a $2.1 million (CDN) settlement and an apology. During an examination under oath, Mulroney claimed that he hardly knew Schreiber, and had had no business dealings with him.

Schreiber allegedly made payments of $300,000 in cash, in three instalments, to Brian Mulroney beginning one month after Mulroney had stepped down as Prime Minister, but was still a sitting member of Parliament. Schreiber had previously been a fund raiser in Mulroney's successful campaign to win the 1983 Progressive Conservative leadership convention. Mulroney has since admitted to receiving $225,000 from Schreiber, in cash, and not reporting this in his income tax returns until eight years later. This was subsequent to Schreiber's indictment in Germany for bribery, tax evasion and fraud and extradition order from Canada.

Since 1999, the Canadian citizen and resident has fought extradition to his native Germany, where he is wanted on allegations of fraud, bribery and failure to pay taxes to the German government on $20 million in commissions related to sales in the 1980s of Airbus jets.

In October 2004, then Canadian Justice Minister Irwin Cotler ordered Schreiber to surrender himself to German authorities. Schreiber, however, remained in Canada exhausting his appeals, until he was finally extradited to Germany on August 2, 2009.