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A rocky $90,000 relationship

RCMP delve into why PMO chief repaid Duffy's dubious expense claims

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OTTAWA -- It's the $90,000 question in the Senate expenses scandal: Why would the prime minister's chief of staff go to such extreme lengths to protect Sen. Mike Duffy?

The question became all the more perplexing this week after documents filed in court by the RCMP revealed Nigel Wright and other senior staff in the Prime Minister's Office thought Duffy was a liar, a loose cannon and a troublemaker.

Yet Wright gave $90,000 out of his own pocket so Duffy could reimburse his dubious expense claims at no cost to himself.

If Duffy was so much trouble, why would Wright not simply have insisted Duffy repay his expenses or have his Senate salary garnisheed, as was done with fellow alleged miscreant Patrick Brazeau?

When news first leaked about the transaction last May, the first explanation offered by unnamed insiders -- but later denied -- was that Wright and Duffy were friends.

The RCMP documents suggest nothing could be further from the truth. Indeed, as the negotiations over Duffy's repayment dragged on and the true extent of his expense claims became clear, they show Wright and other top PMO aides became increasingly exasperated with the senator.

After initially believing Duffy had followed the rules, Wright eventually concluded Duffy "morally should not be claiming" a housing allowance for his longtime Ottawa residence, even if there might be a "technical argument" that could be made for it, according to documents filed by RCMP Cpl. Greg Horton.

At several junctures, Wright thought he'd successfully persuaded the senator to repay his dubious claims, which were initially believed to be about $32,000. But Duffy continued to resist, at one point asking to see a legal analysis of why he was not entitled to the claims.

"Mr. Wright told Sen. Duffy there is no legal analysis and that he (Wright) wasn't looking at this from a legal perspective but rather from a moral perspective of what he should properly claim," writes Horton, who interviewed Wright and reviewed hundreds of emails.

"By this point, Mr. Wright was not happy with Sen. Duffy and no longer wishing to debate the matter. He told Sen. Duffy that from that point on, they will deal lawyer to lawyer on the matter."

Duffy has steadfastly refused to comment on the RCMP documents since they were released earlier this week, and declined again Friday.

In a Feb. 20 email to Wright and another PMO staffer, Duffy cites Wright telling him he is "in violation of the housing allowance policy" and says his lawyer wants to see the legal analysis.

"I did not say that," Wright angrily responds, "and if you continue to misquote me, then we will be speaking only through lawyers going forward."

At another point, Horton writes that Duffy again "argued that he was entitled to his entitlements" and told Wright he wanted an apology from the Senate internal economy committee, which had referred his expense claims to an external auditor.

"Mr. Wright now was angry and told Sen. Duffy the government would not stand behind him," Horton writes.

Eventually, Duffy agreed to repay the expense claims, but only on five conditions spelled out by his lawyer, including that the arrangement would "keep him whole" and his legal fees would be reimbursed -- which Horton took to mean Duffy "would not be financially out of pocket."

Wright arranged to have the Conservative party reimburse Duffy, but the party balked when it became clear the tab was actually more than $90,000.

"Mr. Wright was angered by the amount of money owed, initially believing that the allowance related just to accommodations," writes Horton.

"He did not realize that Sen. Duffy had been claiming for meals and incidentals as well. He was incensed that Sen. Duffy was getting paid for meals he ate in his own house in Ottawa."

"I am beyond furious. This will all be repaid," Wright says in a Feb. 26 email to his executive assistant after learning the real tab.

In a March 1 email, Wright tells PMO lawyer Benjamin Perrin: "Sen. Duffy would make this easier if he did not have outbursts in Senate caucus that make senators oppose anything that helps him save face for expense claims that they see as inappropriate and as putting their own reputations in harm's way."

Wright was not the only one to lose patience with Duffy. The documents reveal other PMO staff and fellow senators were fed up, particularly with what they saw as his lack of discretion, as they worked to hush up the entire matter.

"Even though he claims he is careful in what he says and does, the evidence is the opposite!" Marjory LeBreton, then government leader in the Senate, wrote in one email. "We have to be very careful what we say to him."

The day before news broke in May about Wright's payment to the senator, Duffy was quoted by a media outlet saying that he had reimbursed the Senate for his expenses by taking out a bank loan and that Wright had "played no role."

When asked by a PMO aide if he'd been taken out of context, Duffy responded by email that he had not known Wright was behind the $90,000 credit that had appeared in his bank account and that he hadn't asked who was responsible "because I did not want to be (beholden) to anyone."

"We need to discuss this. His lying really is tiresome," Ray Novak, the prime minister's principal secretary at the time and now his chief of staff, wrote in an email to another PMO aide.

In a bombshell speech to the Senate last month, shortly before the chamber voted to suspend him without pay, Duffy recounted a different version of events.

After telling Wright he couldn't afford to repay his expense claims, Duffy recalled: " 'Don't worry,' Nigel said, 'I'll write the cheque.' "

Given the evident animosity toward Duffy, why did Wright personally bail him out? The RCMP documents suggest he viewed it as a matter of noblesse oblige -- his responsibility as a wealthy individual to relieve the burden on taxpayers.

"Mr. Wright explained that he is financially comfortable, having been successful in the private sector prior to agreeing to work within the PMO," Horton writes.

"Since taking on the position within the PMO, he has not filed expense claims for anything, including meals, flights, hotels or legal fees. He estimates he is out of pocket tens of thousands of dollars, but it is his global view and contribution to public policy that taxpayers not bear the cost of his position if he can legitimately afford to fund it himself.

"Because of this personal beliefs (sic) and financial ability, he took the personal decision at that time to pay back the $90,000. He did not view it as something out of the norm for him to do and was part of being a good person."

For his part, Duffy told the Senate the whole thing was a "monstrous fraud" perpetrated "to make a political situation embarrassing to (Prime Minister Stephen Harper's) base go away."

-- The Canadian Press

Republished from the Winnipeg Free Press print edition November 23, 2013 A21

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