Karlheinz Schreiber to get retrial, German court rules

Germany's top criminal court has thrown out the conviction of former arms-industry lobbyist Karlheinz Schreiber, ordering a retrial after saying errors were made in the 2010 process.

The 77-year-old German-Canadian was found guilty last year of tax evasion for failing to report some 14.6 million Deutsche marks, or about $10 million, in income.

Among other things, the Federal Criminal Court in Karlsruhe said in its ruling today that the Augsburg state court incorrectly rejected Schreiber's request to consider evidence of Canadian residency for tax purposes.

It was not clear when the retrial would take place.

The prosecution won its own request fortrial ona bribery charge,saidHarvey Cashore, a senior producer in CBC'sinvestigative content unitwho's followedhis story for years.

The charge had been withdrawn due to a statute of limitations, but the court ruled Schreiber can be tried on it.

Schreiber is going to apply for bail next week, Cashore said, but he's not likely to get it. He's two years into an eight-year sentence.

Schreiber was arrested in Canada in 1999 under a German warrant and sent to Germany last year after a 10-year battle against extradition.

Business dealings with Mulroney

Schreiber was the key witness in a public inquiry into his business dealings with former prime minister Brian Mulroney. Justice Jeffrey Oliphant ruled they were"inappropriate."

Mulroney admitted taking $225,000 in cash from Schreiber but said he broke no laws or ethical guidelines.

He argued that he had been hired by Schreiber merely to try to line up support from political leaders in Russia, China and France for a proposed United Nations purchase of armoured vehicles made by the Thyssen firm of Germany. Schreiber was a lobbyist for Thyssen.

Mulroney testified he made an error in judgment in accepting the money.

Schreiber said the payments totalled $300,000, not the $225,000 Mulroney later declared for tax purposes. He also maintained the former prime minister was supposed to lobby Canadian officials, not foreign leaders.

Schrieber was extradited after an Ontario court denied his bid to stay in Canada and after thepublic hearings into hiscontroversial financial dealings withMulroney had ended.

German charges

The charges he faced in Germany stemmed from money he allegedly received from the sale of German armoured vehicles to Saudi Arabia in 1991. Schreiber has denied the charges.

Schreiber was also alleged to have given a cash donation in 1991 to the former treasurer of chancellor Helmut Kohl'sChristian Democratic Union, Walther Leisler Kiep. The scandal deepened with Kohl's admission in 1999 that he had accepted illegal donations from supporters.

Prosecutors, however, closed their case against Kohl without charging him after he agreed to pay a substantial fine.