The Airbus Affair Case Study

The Airbus Affair is one of Canada’s most controversial and longest-running scandals in the country’s history, extending over a period of more than 15 years. The scandal occurred when Karlheinz Schreiber allegedly paid percentages of commissions to members of the Canadian government, particularly Brian Mulroney. Karlheinz received massive commissions from the sale of aircrafts to the Canadian government through the agreements he had on his own with companies such as Messerschmitt Bolkow-Blohm and Airbus Industries, sharing a proportion of the profits with Mulroney.
According to the timeline compiled by Geoff Stevens, the relationship between Schreiber and Mulroney first began in February of 1976 when Schreiber generously donated to Brian Mulroney’s Conservative campaign for party leadership. Mulroney and Schreiber remained in contact over the years and when Mulroney was elected Prime Minister of Canada, Schreiber endorsed an agreement where his company would sell Airbus aircrafts to Canada and would acquire commissions of up to three percent for each aircraft. Although this state of affairs was legal, what made it illegal was that Schreiber intended to distribute the commission with Mulroney in order to guarantee that Canada would go through with the

Mulroney stated that the payments were made for legitimate work reasons even though none of his claims could be corroborated. In Schreiber’s first appearance before the ethics committee, he mentioned that Mulroney was paid less than the full potential amount of $500,000 because he did not do anything for the money. Mulroney said that the money derived from a pasta business and business contacts, however Schreiber stated that this was untrue. As a result of a lack of a concrete viable reason for the payments, the most likely explanation is that the money was received because of the Airbus