Onions and influence: The salesmanship of Karlheinz
OTTAWA -- The first time Karlheinz Schreiber struck a deal with a North American he was 11 years old.
As a youngster, in the aftermath of the Second World War, he saw an opportunity in the American soldiers who were occupying his hometown in Germany's Harz Mountains. He would charm his way into their M-38 jeeps and offer onions or eggs in exchange for goods that were scarce among his countrymen: cigarettes and chewing gum.
Since then, his products and his customers have changed dramatically.
He upgraded from onions to airplanes, tanks and helicopters. Instead of young soldiers, he targeted elected officials who had the influence to make billion-dollar deals happen. And in the 1980s and early 1990s, he infiltrated Canadian corridors of power about as easily as he charmed his way into those jeeps.
The trick to dealing with politicians, Mr. Schreiber recently explained in an interview, isn't getting to know the powerful - it's identifying those who will become the powerful and getting to know them.
"That is the secret more or less of my personality. That I made all these friends before and we helped them. And when you come with money and when you help them and when you are friendly, it's easy to make friends," he said. "And it's easy to have relations and then it's easy to do business because you can go on the phone and say, 'Hey, how are we going to do this?' "
This week, images of Mr. Schreiber shuffling up to Parliament Hill in handcuffs were broadcast around the world as he was summoned to appear before the House of Commons ethics committee to answer questions about his $300,000 cash payments to former prime minister Brian Mulroney.
But 20 years ago, he would casually stroll up to the Centre Block, and it was usually in the company of cabinet ministers, not police officers. The story of how he finessed his way into the Prime Minister's Office is almost as intriguing as the cash payments that have become so hotly discussed. Not every public figure has welcomed his overtures - former privy council clerk Paul Tellier and former Alberta premier Peter Lougheed are two notable examples - but many have found his offers irresistible.
His approach to deal making, Mr. Schreiber explained in an interview with The Globe and Mail and CBC's the fifth estate, began with his first politically powerful ally - Franz Josef Strauss.
Mr. Strauss was a right-wing politician with rising stock in Bavaria, the southern region of Germany. Mr. Schreiber was a retailer who started out selling furniture and later Persian carpets. He finally landed his big break with a road-marking business that replaced simple painted stripes with more visible, reflective beads.
Both Mr. Strauss and Mr. Schreiber were staunch conservatives, and became close friends. Eventually, Mr. Strauss became premier of Bavaria and Mr. Schreiber's road-marking business was booming.
The way Mr. Schreiber tells it, he helped Mr. Strauss solve a major problem that every political party faces - fundraising. Mr. Strauss felt burdened by unceasing elections and the expensive campaigns that came with them. The premier complained that he spent less time governing and more time turning, cap in hand, to potential donors.
"You are constantly begging. And Strauss was sick and tired of that," Mr. Schreiber said.
According to Mr. Schreiber, the two men came up with a system that would permanently pump money back into Mr. Strauss's party, the Christian Social Union.
Mr. Schreiber remembers telling the Bavarian leader: "We'll have to use our access to companies where the government is involved and try to make money out of that. And this is what finally happened. By doing jobs, by supporting their marketing activities, get new contracts and of course from that get commissions."
The system worked so well that Mr. Schreiber hoped to take it international.
In 1973, a Canadian trade mission arrived in Germany and it included an up-and-coming Progressive Conservative politician, Horst Schmid. Mr. Schreiber had his destination - Alberta.
Upon his arrival in Calgary, Mr. Schreiber quickly ingratiated himself with members of the Alberta Conservative government and tried to push his road-marking business.
Not everyone was enamoured of Mr. Schreiber, his long list of Bavarian jokes, or his modus operandi.
Lee Richardson, Mr. Lougheed's executive assistant at the time and now a Calgary MP, said in an interview for the book The Last Amigo written by journalists Harvey Cashore and Stevie Cameron, that Mr. Lougheed reluctantly took Mr. Schreiber up on a dinner invitation. "We said no eight times," Mr. Richardson said. "We were chased around until we finally gave up.
"Schreiber was name-dropping like crazy ... Peter was particularly uncomfortable.
"I think Schreiber was talking about ministers in a way that they were palsy-walsy. Well, that just wasn't the style of Lougheed's government in the least."
Mr. Lougheed ended the dinner and later issued a written directive to senior members of his government - stay away from that smooth-talking Bavarian.
Mr. Lougheed later told The Edmonton Journal the memorandum was a decision based on "instinct."
Luckily for Mr. Schreiber, a group of Progressive Conservatives in Montreal had far different instincts and by the early 1980s the wheeler-dealer, along with his new Eastern Canadian clique, was on his way to infiltrating federal political circles.
Mr. Schreiber became a member of a group of disenchanted Tories - former Newfoundland premier Frank Moores, eventual senator Michel Cogger and Austrian businessman Walter Wolf - who held regular meetings at Montreal's Ritz-Carlton hotel where they plotted the unseating of the Tory leader at the time, Joe Clark.
"And then I learned what's going on. Now they needed money," Mr. Schreiber said in an interview.
"None of them had any money because they were digging in my pockets like crazy."
Meanwhile back in Germany, authorities allege that Mr. Schreiber made millions of dollars in commissions in 1991 on the sale of Thyssen-manufactured tanks to Saudi Arabia and that some of the money was quietly funnelled back to a conservative German political party. Walther Leisler Kiep, the former treasurer of the Christian Democratic Union - the equivalent of a federal party in Canada - has admitted to meeting with Mr. Schreiber on Aug. 6, 1991, at a Swiss pizza parlour. German authorities allege that, in the parking lot, Mr. Schreiber handed Mr. Kiep a suitcase holding one million deutschmarks.
The money, Mr. Kiep acknowledged publicly, was never noted in the books of the Christian Democratic Union, sparking a scandal in Germany, as well as criminal and parliamentary probes.
Mr. Schreiber has never had to answer to accusations that he sparked the scandal because he has remained in Canada, fighting his extradition on charges of tax evasion, fraud and bribery for the past eight years.
It remains to be seen whether the public inquiry ordered by Prime Minister Stephen Harper into Mr. Schreiber's dealings with Mr. Mulroney, or the probe by the ethics committee, will delay his extradition even longer.
If he stays, the words he once uttered to a German reporter might ring true for a number of his old associates in Canada:
"I feel like a cat sitting on a cage full of mice and I don't know which one to eat next."
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