Canada Settles Suit, Apologizes to Ex-Premier

The Canadian government on Monday settled an extraordinary libel suit brought by former Prime Minister Brian Mulroney by apologizing for implicating him in a bribery investigation.

The settlement, announced on the day the suit was set to go to trial in Montreal, also requires the government to pay Mulroney’s legal costs, as determined by an arbitrator. Those expenses reportedly near $750,000.

“Based on the evidence received to date, the RCMP [Royal Canadian Mounted Police] acknowledges that any conclusions of wrongdoing by the former prime minister were--and are--unjustified,” the out-of-court settlement stated. “The government of Canada and the RCMP regret any damage suffered by Mr. Mulroney and his family and fully apologize to them.”

But officials also said the bribery investigation will continue, leaving open the possibility that subsequent evidence against Mulroney could turn up. The Mounties are looking into the 1988 sale for 1.8 billion Canadian dollars (about 1.3 billion U.S. dollars at current rates) of 34 aircraft by the European Airbus consortium to Air Canada, which at the time was government-owned.

In September 1995, a Canadian Justice Department attorney wrote a confidential letter to Swiss authorities, asking them to freeze three numbered bank accounts, saying they might have been used for kickbacks paid to Mulroney and a former Newfoundland premier and lobbyist, Frank Moores.

When the letter was leaked to the media last November, Mulroney immediately and vehemently denied all allegations, then sued the government for libel, seeking about $36.5 million (U.S.) in damages. Moores also denied any wrongdoing.

Mulroney was prime minister from 1984 until June 1993, when he resigned with the lowest popularity rating of any leader in Canadian history and was succeeded by Kim Campbell, now Canadian consul general in Los Angeles.

Mulroney and Campbell’s Progressive Conservative Party was crushed in the October 1993 national election by the Liberal Party led by current Prime Minister Jean Chretien. Mulroney remains reviled in Canada, where he is blamed for a period of economic stagnation, unpopular taxes, corruption and a perceived failure to assert Canadian independence from the United States.

Mulroney’s suit accused Chretien’s government--Justice Minister Allan Rock, in particular--of pursuing the bribery investigation for political reasons.

It was the first time in Canadian history that a former prime minister had sued the government. That was only one unusual aspect of the lawsuit: A bizarre side issue, for example, was the allegation that Mulroney or one of his supporters leaked the government letter to the media in an effort to sidetrack the bribery probe.

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The settlement also deprives the public of what promised to be a remarkable months-long trial. In a preliminary court appearance last year, Mulroney previewed his testimony, accusing the government of behavior he likened to fascism. There also were unconfirmed reports that Mulroney was prepared to call former U.S. President George Bush and former British Prime Minister Margaret Thatcher as character witnesses.

Mulroney’s lawyers called the settlement “total vindication,” but RCMP Commissioner Phil Murray said the criminal investigation “is not yet complete and we have reached no conclusions.”

Rock defended the settlement as “in the best interest of the Canadian government, the Canadian justice system and Canadian taxpayers” and noted that Mulroney’s side agreed that “the RCMP, on its own,” initiated the probe with Rock’s participation.

Michael Bliss, a University of Toronto historian who wrote a recent book on Canada’s prime ministers, said the dispute will have little impact on Mulroney’s place in history--unless subsequent investigation develops incriminating evidence against him.

Times staff writer Turner reported from New York and Van Velzen of The Times’ Toronto Bureau reported from Toronto.