And now, a trip down former Liberal ministerial memory lane

Liveblogging the Oliphant Commission (Day One, Part Two)

And now, a trip down former Liberal ministerial memory laneGather ’round, children, as former Trudeau cabinet minister Marc Lalonde takes the stand to discuss his post-political professional relationship with  Karlheinz Schreiber. More background on Lalonde’s peripheral, but still intriguing role in the Airbus Affair is available here, courtesy of the fifth estate.

Check back at 1:30 p.m. for all the action as the afternoon session of the Oliphant Commission gets underway. In the meantime, if you missed this morning’s appearance by Bill McKnight, catch up via ITQ liveblog here.

1:13:37 PM
Let the journalistic revolution begin!

Well, the journalistic seating revolution, that is — don’t want to bite off more than we can chew for our first heroic expert, after all. I’ve abandoned the aforementioned media table at the back of the room for a corner seat in the spectator gallery, since I realized too late this morning that you can barely see the witness from that angle — not only is it a fair distance away, but the CPAC riser is in the way. But from the public gallery, which is in the middle of the room and on the right side, I have the perfect vantage point. The only thing lacking is a hard surface on which to pile my rapidly accumulating collection of documents, but really, I’m much better off than the laptop-bound because the BlackBerry requires nothing but a pair of thumbs.

Anyway, I’m sure the hearing will get underway soon – Marc Lalonde has already rolled in, I believe, although to be honest, I’m not one hundred percent sure I’d recognize him.

1:28:29 PM
Oh, there’s something about dollies stacked with binder-stuffed bankers boxes being wheeled in by harried looking lawyers that makes any courtroom afternoon seem more exciting.
1:30:36 PM
And – we’re back! Not only are we back, but the boxes are suddenly at the centre of attention: according to Vickery, they were just this moment handed to him by Team Mulroney, for use during Lalonde’s testimony this afternoon – wow, and here I thought we might get out of here early. Vickery, however, is slightly aggrieved: he was under the impression that all documents to be entered into evidence would be provided in advance. The judge wonders what his proposed remedy might be, and Vickery suggests that he could use a half hour to review the material.

Wolson pipes up to remind Oliphant that Lalonde won’t be available after today, and the judge shows a flash of — not quite temper, but definitely a certain firm opinion on how things should unfold.

The judge points out that had Lalonde been available this morning, we would have been able to get started already, and while he understands that the witness has a schedule to meet, “so does this commission” — and he -is, after all, under subpoena. He gives Vickery the requested half hour, and adjourns the inquiry until just after 2pm.

You heard the man, ITQ readers: I’ll see you back here at 2pm.

1:44:14 PM
Okay, this was probably the case with Gomery as well, which, sadly, I wasn’t able to liveblog what with not even having a blog at the time – yes, it was a joyless epoch in Ottawa, I can tell you that. Anyway, the building we’re in – Old City Hall, which always makes me start humming Old King Coal, but that’s neither here nor there – is also a sort of storage facility – temporary and long term – for civil servants. You know, French classes, seminars, that sort of thing – but also an orientation to the public service, which, when you think about it, is either wildly inappropriate, or perfectly apt. Really, this is a cautionary tale for *anyone* who may one day involved in government procurement, no matter how tangentially.

1:50:04 PM
It also means that we get random drop-ins from people on breaks from their respective courtrooms, which is also interesting.

You know, I’ve done a cursory scan of the media tables, and I believe I’m the only person here taking notes on her BlackBerry — everyone else is on a laptop, or seriously old school with a pen and notepad. Sometimes I worry that I really am a freak.

2:00:11 PM
Guy Pratte is pacing back and forth in front of his panel of lawyers. Somehow, he manages to do it without looking nervous or distracted, but more like he’s engaged in a very short, controlled strut.

2:04:25 PM
Big lawyer huddle in the middle of the room — everyone seems to be involved, which makes it unlikely that they’re plotting strategy.

2:06:42 PM
One disadvantage to this seat, it turns out, is that it just sufficiently within earshot of the trio of women who have staked out the front row, who clearly know each other well, and are driving me quietly frantic with curiosity with deliciously cryptic offhand references to various key players. Not that I’d liveblog *them*, of course – that’s well beyond the border of acceptable journalistic behaviour – but my ears can’t help hearing, and then my brain gets all distracted trying to work out just who they are.

Vickery is back, by the way, which mean that the hearing should restart soon.

2:14:15 PM
And here we go! According to “Mr. Batista” – commission counsel, I assume – Vickery has gone through the documents, and after one was removed by consent of the parties, the proceedings get back underway. Lalonde – who is wearing a lovely lavender tie – is sworn in, and Batista’s questioning gets underway. Well, after thanking Lalonde for agreeing to appear earlier in the schedule, although as the judge pointed out this morning, he *is* under subpoena.

Hot-off-the-presses diggity! The crack communications unit has planned ahead, and is now handing out the packet of documents for this afternoon’s testimony, which means we’ll be able to follow along.

2:17:40 PM
Brief biographical sketch of the minister, who apologizes for his somewhat crackly voice, and describes his voyage through various ministries before reentering the private sector.

Lalonde recalls that Schreiber became a client “two or three years” after he left politics, while he was at Stikeman Elliott, and noted that he represented him “on a number of occasions” over the year, providing advice and assistance on commercial matters.

When asked if the relationship was purely professional, Lalonde notes that it may have begun that way, but over the years, the two men became friends, as lawyers and clients often do – although he notes that unlike many attorneys, he doesn’t play golf with his clients, since he doesn’t like golf. He’d rather have a good lunch, which makes him a man after ITQ’s own heart.

2:21:35 PM
Back to Schreiber’s business dealings, which Lalonde seems comfortable discussing, from Thyssen to Bear Head to the Great Pasta Machine Inexplicability (not actually its name). Batista wonders who the client was for the Bear Head file, and Lalonde said the bills were sent to Bear Head, and then forwarded onto Thyssen — he doesn’t know which company controlled which, really.

2:25:03 PM
Batista wants to know more about those bills – who prepared them? Mostly his secretary, or someone in the office, Lalonde explains — the only time he heard about it was when a client *didn’t* pay. His fee was based on per hour – $325, for the record – and the billing was paid by cheque or bank order. Oh, bank orders. Now we’re back in familiar territory. Anyway, Lalonde notes that however it arrived, the money went to the company, not individual lawyers, except for matters related to “business administration”.

Was there one method of billing for his lobbying service, and another for his lawyering? No, it was the same system. “The principle was that we based on an hourly rate, and if we had some amazing result, we would negotiate with the client for a bonus.”

2:30:47 PM
A jump forward in time to a subsequent discussion between Schreiber and Lalonde about potential litigation against the Canadian government for breach of contract; Lalonde recalls that he recommended Ian Scott as an “excellent attorney”, which is who Schreiber eventually settled upon.

Back to Thyssen, which was still trying to get that contract with the now Liberal government. Lalonde told him – Schreiber, that is – was to forget about getting a sole source contract for the jeeps, but to attempt to persuade the government to begin a public call for tenders – an “open and transparent competition”.

2:36:16 PM
Back to the evidence — Tab 3, not that this means much to anyone outside this room – and a sheaf of handwritten notes from the Schreiberfiles of a meeting he had with Lalonde on Thyssen. Lalonde tells the court that these were likely prepared at the beginning of his mandate after his first briefing on the file. Lalonde muses over some of his advice to the company – the difficulties surrounding the choice of locale — Cape Breton — which would require a “major investment” in infrastrcture. His proposal to Thyssen: move the proposed plant to Quebec.
Other problems, according to the notes: the jeeps were “outdated”and there was no capacity for peacekeeping. Lalonde tells Batista that he wasn’t at the meeting in question, but this would have been based on Schreiber’s account of his discussion with generals and other military types.

2:46:05 PM
Oh good, tables. Not kitchen tables – sorry, Jack – but tables of potential NATO markets for the jeeps, which Lalonde seems to recall surprisingly well, considering they were originally presented to him a decade or so ago

2:50:47 PM
Okay, this has gone so far down the recovered lobbying memory rabbit hole that I’m having trouble following the thread, but the upshot of this line of questioning seems to be to detail the unshakeable confidence on the part of Thyssen that there was a worldwide market just waiting to be tapped. Even so, the newly elected Liberal government was facing a “very difficult” fiscal situation – oh, right, that whole *deficit* thing; such a drag it was – and the defence department had a wishlist a mile long, and – wait, why is this all sounding so familiar?

Anyway, the government was dealing with a series of requests with full knowledge that it wouldn’t be able to meet all of them, which is what led to the development of the white paper.

Okay, that was very educational, but can we get back to lobbyists lurking behind the lobby curtains now?

2:59:59 PM
No, apparently we can’t – although at least we’ve made it back to lobbying of the minister, which was Lalonde’s task, although Schreiber was obviously involved, as he knew “far more” about the product and knew a lot of people in the military, and even in the Liberal government, from his previous attempts at persuasion.

3:02:34 PM
In response to a direct question, Lalonde tells the court that he doesn’t know Fred Doucet, and has no knowledge that he had any ties to the Bear Head project. He knew that there was “some involvement” with the previous government, but never heard him mentioned while he was involved. His role as a lobbyist was limited to representing the company on a national level — he met with the minister, and public officials, but no foreign officials or politicians. He met with then-PM Jean Chretien, Foreign Affairs staff – really, his job was to convince any and all concerned to go ahead with the call for tenders.

3:06:33 PM
I wonder if we’ll have a health break before Pratte begins his questions. I could really use something chocolate-chipped.

Sorry, where was I? Oh, a fascinating discussion on the difference between decisions made by public servants, and those taken by the cabinet – Lalonde notes that the former should *never* be taken as unanimous.

There was some sort of dispute over the claim made by the deputy minister that there was only one producer for the vehicles, to which Lalonde’s then-response, apparently, was to challenge the premise by demonstrating that the Bear Head jeep was entirely capable of — wait, how did Jean Pelletier get into this discussion? Other than his longtime role as “a man who did a lot of listening”, according to Lalonde, who was aware there was considerable division within cabinet on the issue, that is. “I never got any guarantees in one sense or the other from him,” Lalonde recalls.

Man. When Past Witnesses and Guy Pratte Clients Collide.

3:14:29 PM
Speaking of Pratte and the other lawyers, I hope they weren’t planning on asking too many questions, because Batista has already taken up half the time allotted to this witness.
Who just denied any knowledge of any involvement by Mulroney in the Bear Head file, incidentally. I’ve lost track of how, precisely, that contention plays into the various competing versions of history. Lalonde notes that there were, of course, non-NATO countries such as the Soviet Union to which Canada would never be able to export military equipment.

His mandate, as far as Thyssen went, ended in the fall of 1995, right around the time that the government announced the purchase of the GM-made jeeps.

3:20:17 PM
And suddenly, we’re in another fifteen minutes break. I’m going to investigate the cafeteria – back in a few.

3:30:15 PM
Hey, everybody — great news! We might be here for another hour and a half! Which means much more liveblogging for you, and a thrillingly shortened packing session for ITQ when she gets home. In other news, it turns out that the court ruled against Team Galloway — not really a shocker; consider my gob unsmacked — although it sounds like the reasoning behind the decision is worth delving into by someone who isn’t currently an inmate of Camp Oliphant.

We’re still not back, but it shouldn’t be long. In theory. Keep your fingers crossed.

3:37:18 PM
And — we’re back. Batista notes that there are still a few things left to discuss – the international activities, precisely – but also apologises for not introducing Lalonde’s legal counsel Maitre Decary to the judge. Decary — where do I know that name from? He wasn’t one of the backup lawyers for the Conservative Party at the in and out appeal, was he?

Anyway, back to Thyssen, Bear Head and that robust international market; Lalonde notes that he’s only familiar with the Malaysian market, which had been identified as a *real* potential market for the future — a prototype was tested for the Malaysian forces, he says. How did he know that? Why, Schreiber told him, of course. Wouldn’t the matter of international lobbying have come up during those discussions? Anyway, Lalonde was trying to understand who was “dreaming”, which is how he found out from government officials that some markets had been “underestimated”.

3:44:36 PM
And now, the crux: Who, Batista wondered, would have been lobbying the European NATO countries on this file? Well, Thyssen, Lalonde notes — through the German government, which was well aware of the product. The German Ambassador here worked for Thyssen here – and Lalonde’s mandate was “strictly national”. Was anyone else involved in lobbying for the Bear Head product? Lalonde says that there was a M. Depen or Depiene, as well a – hey, I know that name: Jamie Deacey. He – Lalonde – knew that a firm had been hired, but didn’t have any contact with them.

Would he have expected to have been informed of international lobbying efforts? Not necessarily, says Lalonde. He was happy to hear about Malaysia, but he had no involvement with the international market, and he wasn’t “harassing” Thyssen to find out whether they had been discussing the file with other countries or ambassadors.

3:48:38 PM
That’s it for Batista, and without even a pause, Pratte takes the floor. He presents Lalonde with yet another binder of documents – all of which, Pratte says, were provided by Lalonde to the commission – and Lalonde nods as he flips through; he doesn’t recognize a particular document, but the figures seem familiar.

3:51:22 PM
Pratte points Lalonde at a 1993 document that he – Lalonde – provided; it doesn’t have a date, Lalonde notes, so he can’t say when he received it, but estimates that he “probably” saw it in the spring of 1995. Wait, that’s not 1993. Confusing. Anyway, the letter in question discusses the cancellation of the program based on deficit-related spending cuts; it was signed by Ian Scott. “Thyssen, Bear Head – it was the same thing,” Lalonde muses.

Pratte notes that the Scott letter states that the light armoured vehicle procurement program was cancelled in 1989, but there were “continuing discussions” until the second program was cancelled in 1992. Is he right, then, that it was the cancellation of those programs that prompted Bear Head to consider suing the government?

Lalonde doesn’t disagree, but sighs rather painstakingly when Pratte asks him to confirm that Schreiber asked him for a legal opinion on his claim in 1993. As far as Lalonde is willing to allow, his discussions with Schreiber were related to recommending a “good lawyer” – Ian Scott, as we’ve already heard .
At the end of the day, Thyssen decided not to pursue the matter, Lalonde recalls, since the company had other interests in Canada, which made suing the government a bad idea at the time. Or at least that’s what Schreiber told him,

4:01:19 PM
Lalonde confesses that he never paid much attention to the internal relationships between Thyssen and Bear Head. Believe me, I think I speak for all of us in this room when I say we sympathize, although we weren’t billing one or the other at $325 an hour.

4:03:58 PM
More about the jeep – or rather the vehicle – produced by Thyssen, and its ability to operate in both warmaking and peacekeeping conditions. I don’t quite get why we have to keep going back to whether or not the BearHeadMobile would or wouldn’t have been a good buy for Defence, it really does seem spectacularly under the bridge, but then, I’m sure there are those who would say that about this entire inquiry.

4:08:18 PM
And now, a brief history of NATO. Hey, speaking of NATO, how is Peter MacKay’s quixotic rise-and-fall-and-oh-wait-there-he-is-rising-again to the top of the list of potential NATO chairmen candidates going? Last I checked, he was back in the race, but it sounds less plausible every time he bounces back.

4:10:43 PM
Lalonde is somewhat bemused to be asked to name the five members of the UN Security Council – which he does without hesitation -and Pratte compliments him. “You have high grades,” he says, before stepping down, no further questions to put.

4:12:05 PM
Next up: Richard Auger, who gets Lalonde to confirm that he never was never paid for his services in cash – which he does – nor did Schreiber ask him if he could do so, or say anything like, “I’m an international businessman and I deal in cash.” Certainly not, Lalonde sniffs – he would have been in breach of his partnership unless he turned it over to the firm, but he never heard of that happening during his 25 year career. If it did, though, it would have elicited a receipt, Augur notes, and Lalonde concurs. “You have to be able to trace it.”

4:16:23 PM
As far as Lalonde is concerned, Schreiber has always been “above board” in his dealings, professional and personal – he’s never had any question about his ethics or conduct, and he even signed on as his surety when Schreiber was attempting to stay in the country.

Did Mr. Mausman – Thyssen, I think – ever mention Mulroney’s involvement with the company? No, he didn’t. See, that’s weird, isn’t it? I mean, if you hire a former prime minister as an international lobbyist, isn’t that something you would *boast* about? I mean, when former high powered political staffers get hired as lobbyists – well, as senior advisors now that the FAA mandates a five-year ban on the former – the firm puts out a celebratory press release. Maybe things were different back then, but really. It *is* odd.

4:19:42 PM
No questions from Vickery – that’s a surprise, but not an unwelcome one, and we might get out of here before dusk after all. Anyway, it looked like we were *this* close to adjourning when someone’s lawyer – is that Batista? I can’t tell these guys apart from the back – asks if the context of the surety and the bail for Mr. Schreiber should be explained. Wolson seems a little unsure, but takes a “oh, what could it hurt” approach. Lalonde delivers a brief explanation of the whole extradiction subplot, and notes that the Schreibers asked five friends to sign the surety, including Elmer MacKay, at least according to Schreiber, but since Lalonde was a Liberal minister, he wanted his signature as well.

And that’s it for Marc Lalonde. Well, that went quickly, didn’t it?

A little end of meeting housekeeping — instead of starting the hearing at 9:30, Wolson proposes that they start at 1pm instead. Which means that even if ITQ wanted to sneak over, she wouldn’t be able to do so, since she’ll be heading to the airport right about then.

Anyway, that’s all for day one – which was surprisingly substantive, given the low expectations. Of course, the next time we will be in our soon-to-be-usual seat, it’ll be for the first episode of the Schreiber show, so probably not so bad to get off to a slightly less rollercoastery start.

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