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Conservatives block key witness on alleged interference in Duffy audit

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Sen. Mike Duffy arrives to the Senate on Parliament Hill in Ottawa, Monday, October 28, 2013. THE CANADIAN PRESS/Adrian Wyld

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Sen. Mike Duffy arrives to the Senate on Parliament Hill in Ottawa, Monday, October 28, 2013. THE CANADIAN PRESS/Adrian Wyld

OTTAWA - Conservative senators blocked a bid Thursday to have a key figure from the audit firm Deloitte testify about alleged interference into the review of Sen. Mike Duffy's expenses.

The move came as the Senate's internal economy committee heard from three other Deloitte partners about the audit they had done into Duffy's living claims between February and May.

Deloitte's Gary Timm confirmed what had been revealed in a police report last week — that Michael Runia, one of the firm's managing partners, called him to inquire about the Duffy audit. Runia was not a member of the audit team.

An RCMP court filing last week revealed that Runia made the call at the request of Conservative Sen. Irving Gerstein, who in turn had been prompted by the Prime Minister's Office.

"As I indicated before, he wanted to know if Senator Duffy were to repay (his expenses), how much would that amount be," Timm said of Runia.

"And I said I couldn't tell him; I couldn't disclose any confidential information to him. That was the gist of the conversation."

Timm said that he notified others at the firm about the call, but no report was made back to the Senate committee — Deloitte's client — about the matter.

When Liberal Sen. George Furey later moved to have Runia appear to answer questions, Sen. Gerald Comeau, the Conservative chairman of the committee, ruled against him, saying it's not the committee's job to conduct police-style investigations.

A subsequent vote, which included Comeau's Conservative colleagues, upheld the ruling, much to Furey's disappointment.

"Mr Runia is a very intricate part of that, now that we know from Mr. Timm (that) the person we hired to do our forensic investigation was contacted by somebody else who had no business contacting him," Furey said afterward.

"Now we're told by our Conservative friends that we cannot ask that person to come before the committee and explain his involvement."

Conservative Sen. Hugh Segal, who attended the committee but did not have a vote, said he too would have liked to hear from Runia.

"I think the notion of having a formal conversation with him before a committee would have been useful," Segal said.

Deputy Liberal Senate Leader Joan Fraser later served notice that she would bring a motion on Tuesday that Runia be called to the committee — forcing the entire upper chamber to vote on the issue.

The topic of the Deloitte audit continued to resonate down the hall in the Commons.

"Why does the Prime Minister have his Conservative senators blocking the testimony of Michael Runia if he has nothing to hide?" asked NDP Leader Tom Mulcair.

"What we saw today was that Deloitte appeared before the Senate internal economy committee, took questions and reaffirmed that the forensic audit was conducted with the highest standards and the utmost confidentiality," said Harper's parliamentary secretary Paul Calandra.

The RCMP files raised many questions about potential interference by the Prime Minister's Office into the audit.

Gerstein, who did not sit on the internal economy committee studying the expense issue, was asked by Nigel Wright, Harper's chief of staff at the time, to approach a contact at Deloitte about the audit, according to the documents.

Deloitte also happened to be the firm that managed the books for the Conservative Fund Canada; Gerstein was the party's fundraising chief.

The objective was to ensure that Duffy's repayment of $90,000 in contested expenses stopped the audit short of concluding which of the senator's homes — Ottawa or P.E.I., the region he represents — was his primary residence.

That was part of an alleged agreement between Duffy and the Prime Minister's Office to see Duffy's expenses repaid by a third party — initially the Conservative Fund, but in the end, Wright himself.

Gerstein told police he did speak to Runia, his Deloitte contact. Harper's manager of parliamentary affairs Patrick Rogers described that first contact in an email on March 8.

"The stage we're at now is waiting for the senator's contact to get the actual Deloitte auditor on the file to agree," Rogers wrote. "The senator will call back once we have Deloitte locked in."

Two weeks later, Gerstein went back to the PMO with the news that "any repayments will not change Deloitte's conclusions because they were asked to opine on residency," according to another Rogers email.

Peter Dent, the national leader of Deloitte's forensic advisory practice, defended the integrity of the audit during Thursday's hearing.

"The independence of our forensic examinations is of paramount importance, and we go to great lengths to ensure that such independence is always upheld," said Dent.

"We take this responsibility very seriously. In the case of the work that we undertook for the Senate of Canada, this was absolutely the case. Our reports for each of the four senators in question reflect our objective view of the facts identified in each case."

Liberal Sen. Jim Munson disagreed.

"Because it seems the simple call to you was breaking that ethical wall," Munson said. "The simple call from the conversation with Senator Gerstein and Mr. Runia, then the call to you, that was breaking that ethical wall with Deloitte."

The Deloitte partners said they did not meet with any senators outside of meetings with the sub-committees overseeing the forensic investigations.

Timm, however, was reminded that Sen. David Tkachuk has acknowledged that he did meet with them on one occasion on his own.

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