05/22/2013 02:12 EDT | Updated 07/22/2013 05:12 EDT

Harper: 'I Did Not Know' About Payment To Mike Duffy

LIMA, Peru - Prime Minister Stephen Harper's government deploys a vast early-warning communications system to warn of potential problems on the horizon.

But Harper insisted Wednesday that he learned about his right-hand man bailing out an embattled Conservative senator in much the same way as other Canadians did: by seeing it on the news.

Not only was the prime minister not in the loop about Nigel Wright's decision to give $90,000 to Sen. Mike Duffy, Harper said, he never would have signed off on the deal had he been consulted about it.

He also described himself as "sorry," "frustrated" and "extremely angry" about the whole mess, which has forced his government onto a defensive footing and threatens its carefully cultivated image as a pillar of accountability and sound financial management.

"I learned of this after stories appeared in the media last week speculating on the source of Mr. Duffy's repayments," Harper said at a news conference in Peru, the first time he's taken questions publicly on the scandal since it broke last week.

He said he first assumed Duffy had paid back the money — which went towards housing expenses and per diems he shouldn't have claimed — out of his own pocket.

"Immediately upon learning that the source was indeed my chief of staff, Nigel Wright, I immediately asked that that information be released publicly. That is what I knew."

Harper continued: "I was not consulted, I was not asked to sign off on any such thing," he said.

"Had I obviously been consulted, more importantly I would not have agreed, and it is obviously for those reasons that I accepted Mr. Wright's resignation."

In the days immediately following the revelation that Wright had given Duffy the money, Harper had staunchly stood by his chief of staff and his spokespeople insisted that Wright's job was safe.

But Wright resigned Sunday, and Duffy quit the Conservative caucus last Thursday, after the details of their transaction began to emerge.

The arrangement between the two is under investigation by the federal ethics commissioner; Duffy's expenses in particular are being reviewed again by an internal Senate committee.

"Obviously, I am very sorry that this has occurred. I am not only sorry, I've been through the range of emotions. I'm sorry, I'm frustrated, I'm extremely angry about it," Harper said.

"But that is the reality and I think we've dealt with it promptly."

But Harper's answers Wednesday were just another twist in a story that's had too many inexplicable turns already, the NDP charged.

Once Harper learned about the deal, he must have been briefed about it, said NDP ethics critic Charlie Angus.

"Surely he must have asked for the document or whatever, a memo or whatever, an email," Angus said. "If he has that, will he present it to Canadians and if not, why didn't he try and find this out?"

The Conservatives have denied the existence of any kind of documentation of an arrangement between Wright and Duffy concerning the money.

When the prime minister's office revealed the deal last week, they said Duffy received the money through his lawyer and the only condition was that an equal amount be repaid to the government on the same day.

The payment allowed Duffy to stop co-operating with the external audit of his expenses, which eventually was forced to conclude it couldn't account for all his spending.

And on Wednesday, it emerged that the report written by the Tory-dominated, closed-door Senate committee studying those expenses actually deleted a specific reference to his failure to co-operate before releasing its report to the public.

Another section of the report, describing the language that defines a primary or secondary residence as "unambiguous," was also deleted — but it remained in the expense reports tabled on two other senators.

The government leader in the Senate, Marjory LeBreton, said that was because Duffy had repaid the money.

Meanwhile, Liberal Senate leader James Cowan — who unsuccessfully tried to send Duffy's expense file straight to the RCMP on Tuesday — said Wednesday night that he sent a letter to the chair and vice-chair of the closed-door senate committee re-examining Duffy's claims.

In it, he urged them to make future meetings on Duffy's expenses open to the public and the media.

"In order to regain the public's trust, Canadians need to be reassured that this crisis will be dealt with fairly, impartially and comprehensively, and that can only be achieved by ensuring that all future meetings on this matter are held in public," Cowan wrote in the letter.

Cowan said he hoped LeBreton would sign the letter as well but, he said, she declined.

Duffy said he welcomes a second look at his file.

"Canadians deserve to know all of the facts," he said in his first statement since his resignation from caucus last week.

"I am confident that when they do they will conclude, as Deloitte has already concluded, that my actions regarding expenses do not merit criticism."

Liberal Leader Justin Trudeau said even seeing the cheque itself would be illustrative.

"If we had the cheque we would know if the PM's right hand man did indeed write it, who it was made out to, was it held in trust until Sen. Duffy lived up to his side of the bargain. In fact, we would know whether there was a cheque at all," he said during question period.

"Perhaps the good senator was handed a $90,000 bag of cash in small bills. We don't know. So will the government produce the cheque?"

Trudeau also alluded to an email from February that laid out the terms of the deal, suggesting it was in the possession of the Prime Minister's Office and ought to be released.

Foreign Affairs Minister John Baird, who was standing in for Harper in the Commons Wednesday, said the government would co-operate with the ethics' commissioner's study.

— With files from Jennifer Ditchburn, Stephanie Levitz and Bruce Cheadle in Ottawa

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