On the Farm

On the Farm

Thursday, November 08, 2007

Stepping down to private life

In January, 1993 Brian and Mila Mulroney were the talk of Palm Beach, Florida.

Mulroney, folks were saying, had offered $40,000 to one local resident to rent his house for the month; he and Mila ended up renting the home of a local millionaire and started to house-hunt themselves, looking at houses on Island Drive in the $2.5-million range.

No one was surprised when he announced in February that he was stepping down as prime minister and leaving politics. The date was set for June when a leadership convention would elect his successor.

But before they could buy a Palm Beach getaway, the Mulroneys needed to find a home in Montreal and in March, 1993 they paid $1.67 million for a two-storey, four bedroom stone house on Forden Crescent in Westmount, the city's most expensive neighbourhood. The house needed work and soon Mila Mulroney was busy with decorators and contractors on plans to fix it up. It was going to be expensive; the building permit noted the work had been estimated at $600,000.

How were they paying for it? Not to mention paying for all the other expenses that had been covered for them for nine years by the party and the federal government. Mulroney decided to join the law firm of Ogilvy Renault where he had worked before becoming president of Iron Ore of Canada. But he wasn't starting until August, 1993 and money was needed now.

Mulroney had just resigned and was now living at Harrington Lake, the prime minister's official summer residence. His last visitor at 24 Sussex Drive, at a private lunch for two, had been Peter Munk; Mulroney was soon to go on Munk's board at Barrick with a generous batch of stock options and directors' fees.

And one of his last visitors at Harrington Lake was Karlheinz Schreiber, in a meeting set up by Fred Doucet.

When Harvey Cashore and I were working on The Last Amigo between 1999 1nd 2001, we searched through Schreiber's diaries and saw notes of the calls he had with Fred Doucet setting up the meetings in 1993 and 1994. This one at Harrington Lake on June 23 - when Schreiber now says Mulroney asked him for money - was just one of them.

Mulroney formally resigned as prime minister two days later.

We also saw in the banking records that on July 27, little more than a month later, Schreiber withdrew $100,000 out of the "Britan" account he has set up in a numbered Swiss account in Zurich, money from the secret Airbus commissions. And a month after that, on August 27, Mulroney and Schreiber met at the Montreal airport and Schreiber gave him the money.

But the Mulroneys had other plans for raising money. Earlier that same summer, someone came up with the bright idea of selling the furniture and fittings at 24 Sussex Drive that they weren't taking with them to Montreal. Such things as curtains, a few tables and chairs and so on. The buyer? The government itself, through the good offices of the National Capital Commission's boss, a man called Marcel Beaudry. (The NCC was responsible for maintaining the official residences.) He made a deal with Mila Mulroney to buy her leftovers for about $160,000.

The NCC called in three furniture experts to evaluate the goods being offered and the evaluations were, to be kind, uneven. Especially when they were given only a day or two to look at the stuff. By mid-June, 1993, the deal was struck and the NCC agreed to pay Mila Mulroney $150,000. What was interesting was the thought that some of the goods being sold had been paid for by the Conservative party many years earlier.

Only when one of the dealers, asked to evaluate the furniture and outraged at the scheme, called me, did the story come out. I wrote it for The Globe and Mail in early July, 1993. Public reaction was swift and furious. In mid-July, Mila wrote Marcel Beaudry from a friend's house in France where she and Mulroney were holidaying to to say she was returning the cheque.

Clearly, by the time Schreiber gave Mulroney the $100,000 in August, the money was very welcome.

Annabelle King, then the Montreal Gazette's design editor, told me that the work on the Mulroney house was the talk of the town. One fact stood out, she said: the Mulroneys were paying most of the bills in cash.


Anonymous said...

Isn't it amazing that as soon as Chretien found out he'd have to testify re; the Mulroney suit, the CND government dropped the investigation and settled?

Now, can you please tell us how Chretien became filthy rich while in office? Please include the same information as you did with Mulroney, you can start with Chretien's dealings in New York. Now that would be interesting.

Anonymous said...

Paying cash, thereby avoiding the GST...priceless

Anonymous said...

Would it have been through the $ Billions in US funds that was arranged to be borrowed by Nova Scotia from Saudi Arabia.
1983, 1984 & in 1987.