Canadian Prime Minister Stephen Harper has announced a review into dealings between former prime minister Brian Mulroney and a businessman who is wanted in Germany on tax and fraud charges.
The move followed opposition Liberals' demands for a full investigation into allegations that businessman Karlheinz Schreiber of Germany paid C$300,000 (US$318,000) to Mulroney in 1993 and 1994 to enlist his help in building an arms factory in Quebec as well as a pasta business in Ontario.
But Harper said he was appointing an independent adviser to look into the matter and recommend what the government should do, saying such a probe could be an option later.
Mulroney, who served as Canada's Conservative prime minister from 1984 to 1993, has denied the charges and released a statement saying he will cooperate fully with the review.
Schreiber has filed suit against Mulroney in an effort to recover the money, arguing that Mulroney did not follow through on his commitments.
Harper's announcement followed an affidavit filed by Schreiber on Thursday in Ontario Superior Court with new claims against Mulroney -- and for the first time a mention of Harper.
Schreiber alleged that a Mulroney adviser once asked him to transfer funds, in connection with Air Canada's 1988 purchase of Airbus planes, to a Mulroney aide.
As for Harper, the affidavit claims that Mulroney told Schreiber about an upcoming visit to the current prime minister's country estate in July last year. It alleges that Mulroney promised to discuss Airbus there.
Schreiber is facing extradition to Germany as early as next week. Germany alleges that Schreiber, who has dual Canadian-German citizenship, avoided paying income tax on C$45.6 million in commissions. The fraud charges against him arise from a deal for the sale of German army tanks to Saudi Arabia.