OTTAWA -- Senator Mike Duffy resigned from the Conservative caucus Thursday night to sit as an independent amid a controversy over his housing claims, leaving a host of questions about the nature of his expenses and why the prime minister backed him for so long.
The employment status of Stephen Harper's chief of staff, Nigel Wright, remains unchanged -- despite his secret gift to Duffy to help repay the improper expenses.
Only a week ago, the Conservative government was hailing Duffy's leadership for repaying the funds the Senate said he owed. Senate Leader Marjory LeBreton declared the matter closed.
But then it came to light Wright had cut Duffy a personal cheque to cover the repayment in March. Harper's office characterized it as a personal gift, but this week Duffy called it a loan.
The Canadian Press reported Thursday Duffy campaigned for the Conservatives during the April 2011 election while claiming to be on Senate business.
Those two developments appeared to finally shift the Harper government's attitude towards Duffy. Conservatives behind the scenes began to grumble about Duffy's impact on the party's reputation.
"There are a growing number of questions about Mr. Duffy's conduct that don't have answers. Mr. Duffy will have to answer as an independent senator," a government official said on condition of anonymity.
"Mr. Duffy's claim that he had secured a bank loan came as a complete surprise. All of the revelations relating to the expenses during the campaign are new."
Still, the Conservative leadership in the Senate and the prime minister's office were aware Duffy had not fully participated in an independent audit of his living and housing expenses. At issue are claims made by Duffy and two other senators their primary residences were outside the national capital region.
As soon as he had made the $90,000 repayment, facilitated by Wright, his lawyer told the firm, Deloitte, they were no longer co-operating. He failed to produce financial and credit-card statements, as well as a calendar of his activities.
The auditors were forced to concede in their report they could not ascertain what expenses Duffy was claiming on certain occasions.
That included several days in April 2011 when he was campaigning for the Conservatives.
Sen. Mac Harb -- formerly a Liberal who is now independent -- is contesting a Senate demand he repay $51,482 in housing-related expenses.
Sen. Patrick Brazeau is also fighting the Senate's demand he repay $48,744 in housing expenses and is asking for a public meeting with the secretive committee that's making the demand.
The Deloitte auditors have said the rules around housing expenses are not clear and Brazeau met four criteria for declaring his home in Maniwaki, Que., his primary residence. But the audit also said Brazeau's activities while in Ottawa were undocumented, despite the senator's claims he was on Senate business.
"I think that I've always said that Senate internal economy is one of the most powerful committees in Parliament because they conduct their committees behind closed doors, and it's time that they are open," Brazeau told reporters Thursday.
"They can't just pick and choose who owes money and who does not, and in my case, the fact that I did meet the four criteria, the fact that I did not break any rules, well I'm going to stand up for myself and I'm going to demand answers."
The NDP said Thursday it has asked the Senate ethics officer to investigate Wright's gift. Under the Senate ethics code, senators are prohibited from receiving gifts. Ethics Commissioner Mary Dawson has said she is reviewing the matter.
-- The Canadian Press