Canada Apologizes, Averts Libel Trial

The Canadian government averted an unprecedented libel trial Monday by apologizing to former Prime Minister Brian Mulroney for suggesting he was guilty of taking kickbacks for a huge airplane deal.

However, federal officials said the police inquiry into the affair will continue, and they refused to state categorically that Mulroney no longer is a suspect.

The investigation concerns allegations that secret commissions were paid in connection with the sale of 34 Airbus jetliners to Air Canada in 1988.

Mulroney’s lawyers, claiming “total vindication” for their client, dropped their demand for $36.5 million in damages. They settled instead for the apology and government payment of Mulroney’s legal bills.

The apology focused on phrases in a Justice Department letter that suggested - in seeking a freeze on three Swiss bank accounts - that Canadian investigators were convinced of Mulroney’s guilt.

The libel suit was filed in November 1995.