Winnipeg Free Press - PRINT EDITION

Duffy audit lacks key testimony: Grits

Interference by PMO alleged in independent investigation

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OTTAWA -- Liberal senators tried a new tactic Thursday to get to the bottom of allegations the Prime Minister's Office interfered in an independent audit of Mike Duffy's expenses.

James Cowan, Liberal leader in the Senate, asked Senate Speaker Noel Kinsella to rule the interference constitutes a breach of senators' privileges.

Kinsella reserved judgment. If Kinsella determines there was a breach of privilege, the matter would be referred to a Senate committee for study.

That could give Liberals another opportunity to try to call two key witnesses alleged to have been involved in the audit interference: Conservative Sen. Irving Gerstein and Deloitte managing partner Michael Runia.

Two previous Liberal attempts to get Runia to testify at the Senate's internal economy committee were defeated by the majority Conservatives.

Gerstein ruled out of order Wednesday a Liberal attempt to have him step aside as chairman of the Senate banking committee until he's cleared by the RCMP or agrees to testify at internal economy about his role in the matter.

According to witness statements and emails obtained by the RCMP, Prime Minister Stephen Harper's former chief of staff, Nigel Wright, enlisted Gerstein's help in concocting a deal in which Duffy would repay $90,000 in questionable living expense claims.

Duffy agreed to the deal on condition that he would be reimbursed the full amount, that a Senate report on his conduct would not be critical of him and that there would be no question about his eligibility to sit as a senator from Prince Edward Island, although he lived primarily in Ottawa.

Gerstein initially agreed the party would reimburse Duffy -- when the tab was thought to be $32,000 -- but balked when it became clear it was more than $90,000. Wright eventually reimbursed Duffy out of his own pocket.

At Wright's behest, Gerstein talked to Runia, who audits the Conservative party's books, to ensure the audit would make no finding as to whether Duffy's primary residence was in Ottawa or P.E.I. -- which it did not.

"Why should the chief of staff to the prime minister be sending emails discussing the desired outcome of an independent audit ordered by the Senate? If this is not evidence of interference, I don't know what would be," Cowan told the Senate.

Gary Timm, lead auditor on the Duffy file, last week told a Senate committee Runia called him to find out how much Duffy owed in questionable expenses. But he and two other members of his audit team said they imparted no information about the audit and that findings were not influenced by anyone.

Cowan noted the RCMP documents show Wright and other top PMO aides knew it would make no finding about Duffy's primary residence because the senator refused to speak to auditors.

Indeed, Cowan argued PMO interference "began virtually from inception," even before the internal economy committee announced its decision to order an external audit of expenses claimed by Duffy and two other senators -- Patrick Brazeau and Mac Harb.

RCMP documents say Wright called committee chairman David Tkachuk, asking the audit's wording "differentiate" Duffy's case from that of Brazeau and Harb, a request accommodated by adding an extra line that the committee was seeking legal advice about Duffy's residency.

The alleged audit interference was also fodder in the House of Commons on Thursday, with New Democrats and Liberals demanding to know why the government is refusing to call Runia and Gerstein as witnesses.

"Why, if the Conservatives have nothing to hide, do they have an interest in blocking Runia's testimony?" NDP Leader Tom Mulcair demanded.

Harper responded that "the auditors who performed the audit have already testified before the Senate and they testified to the integrity of their audit."

"All of them, except for one," Mulcair shot back.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition December 6, 2013 A19

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