05/17/2013 12:01 EDT | Updated 07/17/2013 05:12 EDT

Mike Duffy Expense Claims: Senate Committee Wants Second Look

OTTAWA - The Senate was scrambling to salvage its reputation Friday as it declared it would take a sober second look at Sen. Mike Duffy's expense paperwork — and as another embattled senator stepped down from the Conservative caucus.

Sen. Pamela Wallin, like Duffy a former CTV broadcaster, said she would recuse herself from Conservative ranks pending the outcome of a comprehensive audit of her travel expenses — more than $321,000 since September 2010.

Wallin's departure was just the latest development Friday in an expense scandal that's been roiling the upper chamber, culminating earlier this week in the revelation that Duffy's $90,000 worth of dubious housing expenses was paid back by the prime minister's right-hand man.

Duffy is also under scrutiny amid allegations that he was double-dipping on expense claims during the last federal election, claiming expenses for being on Senate business when evidence indicates he was campaigning for the Conservatives.

Duffy quit the Conservative caucus late Thursday, but the Prime Minister's Office remained staunchly behind Nigel Wright, Stephen Harper's chief of staff, who covered the senator's offside expenses out of his own pocket.

The PMO was nonetheless forced to acknowledge the breadth of potential problems posed by Duffy's financial dealings, including the possibility Wright's generosity was in violation of ethics rules.

"Our office is in contact with the office of the ethics commissioner, for one," Andrew MacDougall, the prime minister's spokesman, said Friday.

"And Sen. Duffy has some questions to answer but he'll answer those as an independent senator now."

The Senate's internal economy committee had declared the matter of Duffy's expenses closed, despite the fact independent auditors weren't able to see his financial and credit-card statements, or a calendar of his activities.

Duffy stopped co-operating with the audit in March after paying back $90,172 in disallowed expenses, the bulk of which was the result of claiming his cottage in P.E.I. as his primary residence despite spending most of his time in Ottawa.

As a result, auditors were unable to say for certain what expenses Duffy was claiming at certain times, including several days in April 2011, when Parliament was dissolved and Canada was in the grips of a federal election campaign.

The Canadian Press and others reported Thursday that Duffy was on the campaign trail on those days, and appeared to be billing both his party and taxpayers for his costs.

"In light of yesterday's media reports regarding Sen. Duffy's expense claims, senators will be asking that the report concerning Sen. Duffy be referred back to committee for further examination taking into account this new information," a spokesperson in government Senate leader Marjory LeBreton's office said Friday.

The about-face was partially the result of a looming mutiny within the Conservative caucus as senators grew frustrated with the controversy and the damage it has done to the Senate's reputation.

Conservative Sen. Vern White, formerly Ottawa's chief of police, likened the turmoil to his experiences in policing when the actions of one bad officer could taint the reputation of the force.

Duffy had no choice but to go, White said.

"The challenge a number of people have in the Senate — a number of my friends in the Senate, in fact — is that the public isn't looking at the other good things we do," White said in an interview.

"The public can't get to the good things you're doing when they think some of you are ripping them off. They just can't focus on it."

In her statement, Wallin insisted she's been co-operating with auditors.

"I have been involved in the external audit process since December 2012 and I have been co-operating fully and willingly with the auditors," she said.

"I have met with the auditors, answered all the questions and provided all requested documentation."

Her statement came less than 24 hours after Duffy acknowledged that his presence had become a distraction.

"Throughout this entire situation I have sought only to do the right thing," Duffy said. "I look forward to all relevant facts being made clear in due course, at which point I am hopeful I will be able to rejoin the Conservative caucus."

Duffy's office did not return a call for comment Friday about how he intends to make those facts clear.

Whether the report's return to committee means the audit itself will be reopened is unclear, though the committee could compel Duffy to produce more information.

Meanwhile, the ethics commissioner is also involved, looking into precisely how Duffy came up with the money to pay the Senate back.

The Prime Minister's Office dropped the bombshell Wednesday that the money had come from Wright, prompting critics to complain that the payment violated Senate ethics rules that prohibit senators from accepting gifts.

"From our perspective, the money had to be returned — had to be returned right away," MacDougall said Friday.

None of that squares with Duffy's own claims that he took out a loan to cover the bill.

MacDougall has said Harper knew nothing of the transaction with Wright.

Duffy's not the only one in hot water, either: two other senators also caught up in the housing controversy are both fighting the Senate's order that they repay their own expenses.

Sen. Mac Harb was deemed to owe $51,482 in housing-related expenses, a finding that prompted him to quit the Liberal caucus and sit as an independent. Sen. Patrick Brazeau — kicked out of the Conservative caucus after he was charged in February with assault and sexual assault — was assessed $48,744.

Brazeau surfaced Thursday to demand a public meeting with the secretive committee that's ordered him to repay the money.

Neither senator was offered the same financial assistance as Duffy, MacDougall said.

The New Democrats, meanwhile, want the investigation expanded, and have asked Elections Canada to determine whether Duffy — and possibly other senators — have broken election laws.

In particular, NDP MP Craig Scott wants to know if Duffy charged the Conservative campaign for his travel during the writ period in 2011 or whether those costs were borne by taxpayers as part of his Senate expenses.

That would be an unclaimed campaign expense, said Scott, the party's critic for parliamentary and democratic reform.

Scott's letter to Elections Canada also names at least four other senators who were cited as being on the campaign trail, but who haven't fully disclosed their expenses.

"I trust that you will launch an investigation into these troubling allegations to determine whether the Canada Elections Act has been violated, and ensure that anyone who broke the rules faces the full consequences of the law," Scott wrote.

Also on HuffPost

Wright Helps Duffy