POLITICS

Mike Duffy's Former Lawyer Recommended Calling Repayment Deal A 'Contract'

08/24/2015 12:16 EDT | Updated 08/24/2016 05:59 EDT

OTTAWA — A former lawyer for Mike Duffy advised him to defend the secret repayment of his contested expenses as a "contract" — a characterization that could bolster the Crown's arguments about the senator's alleged role in the deal.

New emails submitted as evidence Monday in Duffy's fraud, breach of trust and bribery trial reveal some of the scrambling that occurred in May 2014 when details of the $90,000 payment broke in the media.

Harper's former chief of staff Nigel Wright had repaid Duffy's expenses two months earlier, while Duffy and others inside the Prime Minister's Office held to the line that Duffy had repaid the bills.

Duffy quickly consulted with the law firm Nelligan O'Brien Payne to find out how to handle any ensuing scrutiny by the Senate ethics officer.

Lawyer Christopher Rootham told him that because firm colleague Janice Payne had helped to strike a repayment deal with Wright, the repayment should be described as a "contract."

If it had been a gift, that would have been more problematic, Rootham said in an email.

"In my opinion, a good argument could be made that this was not a 'gift' at all, but instead income received from a contract (negotiated by Janice)," he wrote. "The payment therefore falls under the annual 'confidential disclosure statement' that you must make under... 1/8the Senate ethics and conflict of interest 3/8 code."

Duffy sent a letter to Senate ethics officer Lyse Ricard a few hours later, repeating the notion of a contract with Wright and asking her to review the matter.

This characterization of the payment as a contract is potentially problematic for Duffy now, as the Crown tries to paint him as the instigator or equal partner in a scheme to have the $90,000 in dubious expense claims paid back from someone else's pocket.

Rootham goes on to tell Duffy that the "more serious risk" is if someone alleges he breached the Parliament of Canada Act — something that some experts did bring up at the time, but which never transpired.

The Act prohibits any member of the Senate from receiving money in relation to any "controversy," or any person from offering the money to a senator.

"If this allegation is made, IF YOU SPEAK AT ALL you will deny that you received compensation in respect of a controversy before the Senate that any arrangement that was made was bona fide and legal," the lawyer writes.

Duffy's defence in this trial has been that he was strong-armed into accepting a deal in which he would admit error in filing his Senate expenses, even though he felt strongly that he had done nothing wrong.

Chris Woodcock, the former director of issues management inside the PMO, testified Monday about discussions he had with Duffy around public statements the senator make about the repayment.

Woodcock was a sort of firefighter inside the PMO, trying to extinguish potentially damaging stories as they emerged in the media.

The Crown took him through email discussions in which Duffy himself appeared to actively collaborate on media strategy.

"It was collegial, co-operative," Woodcock said of one conversation with Duffy in February 2013 about a media statement.

"Did you pressure him on the call to accept a certain statement?" asked Crown prosecutor Jason Neubauer.

"None whatsoever," Woodcock responded.

Woodcock also testified that he was unaware that Wright had repaid Duffy's expenses, despite being copied on a direct email in which Wright tells him of his intention.

"FYI only. No such discussions with Wallin. There was discussion re Duffy, but decided no CPC funds to be used," Wright wrote.

"For you only: I am personally covering Duffy's $90K."

Wright also listed Woodcock as one of the people he told about the payment, in testimony earlier this month.

Woodcock said he didn't read that part of the email, and found out after the story broke on CTV News.

That position bears some similarity to that of Harper's current chief of staff, Ray Novak, who said through a spokesman that he had not read an email from Wright in which Wright tells him he is sending his cheque.

Harper has placed the blame for the Duffy scandal squarely on the shoulders of Wright and the senator, saying subordinates shouldn't be the ones held accountable.

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