Bruce Carson, 66, has a history of fraud convictions and had been facing accusations of influence peddling and illegal lobbying after it was alleged that he told Ottawa-based water purification company H20 Pros that he could use his connections to arrange deals with First Nations communities.
In a news release issued Friday, the RCMP's A Division said Carson is "alleged to have accepted a commission for a third party in connection with a business matter relating to the government."
The investigation began in March last year after RCMP received a referral from the Prime Minister's Office (PMO).
When asked about the charge against Carson, cabinet ministerJohn Baird said "we brought in the Federal Accountability Act to set the bar high, and we hope it's enforced with the full force of the law."
"We are the ones that raised the bar for accountability and we strongly support people being held accountable," said Baird speaking from Carleton University in Ottawa on Friday.
NDP ethics critic Charlie Angus said he welcomed the RCMP's "diligent work" in investigating Carson's activities, but he also said the Official Opposition still had questions for the PMO.
"The prime minister still hasn’t explained, or taken any responsibility, for how his inner circle included someone with previous criminal convictions for fraud — who then went on to allegedly use his political connections to take advantage of impoverished First Nations communities for a quick buck," said Angus in a written statement.
In a statement to CBC News, Andrew MacDougall, director of communications for the PMO said that "immediately after being informed of these allegations last year, our government referred the matter to the RCMP commissioner, the ethics commissioner and the lobbying commissioner.
Carson has had a history of financial problems and was convicted of five counts of fraud going back to the 1980s and 1990s before he was hired as an adviser to Harper.
In April 2011, Harper said he didn't know the extent of Carson's criminal record or that Carson had received court-ordered psychiatric treatment before working for him.
Liberal access to information, privacy and ethics critic Scott Andrews said that "despite being aware of his fraud conviction, Mr. Harper hired Mr. Carson twice to work in the PMO and gave tens of millions of dollars in grants to two of his projects."
"If we are the company we keep, I would strongly suggest Mr. Harper re-evaluate who he chooses for his inner circle," said Andrews in a written statement.
RCMP, ethics and lobbying commissioners launch separate probes
Carson was the prime minister's chief policy analyst and troubleshooter from 2006 until 2008, when he left the PMO for Calgary.
There, he headed up the Canada School of Energy and Environment, a co-ordinating agency for clean energy research set up by three Alberta universities and funded by a federal grant.
He returned to the PMO briefly in January 2009 before going back to the institute in February of that year.
Two letters from that time released by the Conservative Party in April 2011 indicate that while at the PMO in 2009, Carson may have been lobbying on behalf of the Canada School of Energy and Environment for a $25-million grant that was later awarded to another research institute Carson was affiliated with named Carbon Management Canada.
The PMO asked for the investigation following allegations that Carson had lobbied ministerial staff at the Department of Aboriginal and Northern Affairs on behalf of his then fiancée, Michele McPherson, who acted as an intermediary for H20 Pros.
McPherson stood to earn commissions from any sales to First Nations reserves. It was also alleged that McPherson has worked as an escort.
Carson never registered as a lobbyist and claimed he was not trying to influence ministerial staffers at Aboriginal Affairs, and was not being paid for his activities on behalf of his girlfriend.
Legislation passed by the Harper government in 2006 bans ministerial staffers from engaging in lobbying activities on behalf of private companies for five years after leaving public office.
In November 2011, Mary Dawson, the conflict of interest and ethics commissioner, suspended her examination of Carson's post-employment obligations under the Conflict of Interest Act, pending the outcome of an RCMP investigation.
CBC's Greg Weston reported in December 2011 that Karen Shepherd, the federal lobbying commissioner, had completed a report of her eight-month investigation into Carson's activities but Shepherd's report has never been made public.
Carson is scheduled to make his first court appearance on Sept. 10 in Ottawa.