OTTAWA - Senator Mike Duffy resigned from the Conservative caucus to sit as an independent Thursday night amid a controversy over his housing claims, leaving a trail of unanswered questions about the 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.
Duffy resigned before what would have been a humiliating showdown for him next week. Conservative sources said the vast majority of his Senate colleagues had signed a petition calling for his ouster from caucus and they were prepared to confront Duffy with that petition at a meeting next Tuesday evening.
It's a stunning change of attitude for the Conservatives, who for the past four years have used Duffy at myriad party events to raise money, promote candidates and slag the opposition.
"It is clear the public controversy surrounding me and the repayment of my Senate expenses has become a significant distraction to my caucus colleagues, and to the government," Duffy said in a statement late Thursday evening.
"Given that my presence within the Conservative caucus only contributes to that distraction, I have decided to step outside of the caucus and sit as an independent Senator pending resolution of these questions."
Only a week ago, the Conservative government hailed Duffy's leadership for repaying the funds the Senate said he owed. Senate Leader Majory LeBreton declared the matter closed.
But then it came to light that 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 that Duffy campaigned for the Conservatives during the April 2011 election while claiming to be on Senate business. That report was said to be the last straw, according to one senior Conservative.
"There are a growing number of questions about Mr. Duffy’s conduct that don't have answers," said one government official who was not authorized to speak publicly on the matter. "Mr. Duffy will have to answer as an independent Senator."
"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 that Duffy had not fully participated in an independent audit of his living and housing expenses.
At issue is whether Duffy and two other colleagues, former Liberal Senator Mac Harb and former Tory Senator Patrick Brazeau, actually had a primary residence outside of the national capital region when they submitted housing and living expenses.
As soon as Duffy had made the $90,000 repayment, facilitated by Wright, his lawyer told the firm Deloitte that 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 that 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.
Harb — now sitting as an independent —is contesting a Senate demand that he repay $51,482 in housing-related expenses.
Brazeau is also fighting the Senate's demand that 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 that 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.