Department of Justice

SETTLEMENT AGREEMENT

(Settlement Agreement Regarding the Case Brian Mulroney v. The Attorney General of Canada et al)

1.The parties wish to announce that the Right Honourable Brian Mulroney, the Government of Canada and the RCMP agree to settle out of court the litigation presently pending among them.

2.The basis for the litigation was the Request for Assistance, initiated and drafted by the RCMP and signed and sent by the Department of Justice to the Swiss authorities in the Airbus investigation by the RCMP.

3.Some of the language contained in the Request for Assistance indicates, wrongly, that the RCMP had reached conclusions that Mr. Mulroney had engaged in criminal activity.

4.Based on the evidence received to date, the RCMP acknowledges that any conclusions of wrongdoing by the former Prime Minister were - and are - unjustified.

5.The Government of Canada and the RCMP regret any damage suffered by Mr. Mulroney and his family and fully apologize to them.

6.The parties have always acknowledged that the RCMP must continue investigating any allegations of illegality or wrongdoing brought to its attention.

7.The Government of Canada and the RCMP emphasize that the Request for Assistance was a highly confidential state-to-state communication intended to be received by Swiss authorities who knew that it contained only allegations which were to be verified and that the persons named were presumed innocent of any wrongdoing.

8.The parties acknowledge that the procedure used in sending the Request for Assistance to Switzerland in this case was the same as that followed in numerous previous requests for mutual assistance under both the current and previous administrations where such requests have always remained confidential. Because of this the Government of Canada did not foresee that the Request for Assistance would become public. Since it did, the Government of Canada has reviewed its procedure to ensure that the risk of this happening again is minimized.

9.The parties accept that the RCMP, on its own, initiated the Airbus investigation: that the Minister of Justice was not involved in the decision to initiate the investigation; and that before November 4, 1995, the Minister of Justice was not aware of the Request for Assistance and the RCMP investigation.

10.The parties accept that the RCMP and the Department of Justice in sending the Request for Assistance to Switzerland acted within their legitimate responsibilities in this matter.

11.The RCMP will pay to Mr. Mulroney all legal fees and disbursements and all fees and disbursements paid to experts whose reports were intended to be tendered to the Court, and which were reasonably incurred in the prosecution of this action. The final amount is to be determined by final binding arbitration, to the exclusion of any court, by former Chief Justice Alan B. Gold, or, if unavailable to act, by such other arbitrator chosen by the parties or in conformity with the Code of Civil Procedure of the Province of Quebec.

12.Mr. Mulroney waives his claim to damages because any award would be payable out of public funds.

13.Contemporaneous with the signing of this Settlement Agreement Mr. Mulroney will sign a release in the form attached as Schedule «A» and the Declaration of Settlement Out of Court attached as Schedule «B».

January 5, 1997

                           ________________________________________
                           For:  B. Mulroney


                           ________________________________________
                           For:  Feigenwald, Murray & The RCMP





                           ________________________________________
                           For:  AG & Prost