Nigel Wright's Resignation 'A Big Blow' For Scrambling PMO

OTTAWA — When Nigel Wright accepted sole responsibility for ensuring that Senator Mike Duffy’s inappropriate housing expenses had been repaid, his resignation sent a shockwave through the federal government and Tories across the country. It also left a gaping hole in the Prime Minister’s Office, which is scrambling to shuffle the decks.

To many who didn’t know Wright, his resignation was an admission of guilt. Conservative MPs grumbled about being bombarded with calls from angry constituents.

“It’s all I hear about,” one Manitoba MP said after returning to Ottawa from a week in the riding. The Tory base wasn’t happy.

For the Conservative party, which was elected on a message of accountability and seven years later appeared in the eyes of many in the public to be acting no better or different than the Liberal party they had replaced, the damage to the brand was potentially great.

Four senators, including three Harper appointees, had been caught abusing their privileges. Two of them had double-dipped in their expense accounts. And, so far, no one more so than Duffy.

Now, the Prime Minister’s Office (PMO) was admitting that Harper’s chief of staff, Wright, had arranged for a $90,000 cheque to be given to Duffy. According to CTV News, Duffy was to use the money to pay back his expense claims, in return for which the committee’s report based on a third-party audit would treat him lightly. He was also expected to keep quiet about the financial assistance, according to an email the CTV report cited.

Duffy, the rotund former television personality and quintessential Ottawa insider who enjoyed a drink or two with a side of gossip, was popular on the party’s fundraising circuit. He was emotional and carefully managed by the political centre. He had little in common with Wright, a physically fit, wealthy workaholic who was widely admired for his smarts and discretion.

The whole thing didn’t make sense. Those who knew Wright or had worked with him couldn’t explain his conduct.

“I think that Nigel Wright’s actions were always honourable. I think that they are misunderstood,” said Ken Zeise, a past president of the Ontario Progressive Conservatives who has known Wright since they were teenagers in the late 1970s.

“It is certainly out of character for Nigel to do something like this, that is for sure. It’s an uncharacteristic lack of judgment on his part,” said L. Ian MacDonald, a political commentator who worked with Wright in the 1980s in former prime minister Brian Mulroney’s office.

Wright was then a 22-year-old law student on a leave of absence from the University of Toronto.

“He looked like he was about 14 years old, and we used to ask him if he was old enough to vote,” MacDonald said. “Someone in the office said, ‘Be nice to Nigel. We’ll all be working for him some day.’ And it kinda turned out that way.

“Wherever he has gone, he has been part of the solution. He is that type of guy,” MacDonald added.

This time, of course, Wright was not. Caught during an early morning run, he told CTV Wednesday that he would give all his submissions to the Ethics Commissioner.

“She’s going to look into this, and I think I can stand behind everything I did,” he said. “I made some mistakes, I'm living with the consequences of those mistakes, but I believe I can account for my actions.”

Several political observers had hoped Wright would recognize that others were also paying the cost for his mistake.

Ethics Watchdog Mary Dawson confirmed that her office is investigating whether Wright breached the Conflict of Interest Act but last week seemed to play down any expectations that she will come down hard on him, saying she can only rule on whether the law has been breached, not on whether someone’s behaviour was questionable.

Duff Conacher, the founding director of Democracy Watch, was so alarmed by Dawson’s comments that he issued his own news release outlining the specific rules Wright breached.

Either Wright intervened to help a friend, or he improperly helped someone, Conacher said.

“We don’t know whether Duffy is actually a friend, but if he is not a friend then, it was improper for him to intervene in a situation to further Duffy’s interest,” he said.

If Wright was not acting as Harper’s chief of staff when he wrote a cheque but was instead acting as a private citizen, it was up to him to arrange his affairs to avoid a conflict of interest, Conacher added. “Of course, paying off a senator doesn’t avoid a conflict of interest, it creates it. So either way he is caught.”

The Prime Minister insists that he knew nothing about the Wright-Duffy deal and only learned that his top aide had used personal money to assist Duffy on May 15, after a media report had surfaced the night before.

“Had I known about it before it happened, I would have said not to do it,” Harper told reporters on Thursday.

(A new CTV News Ipsos Reid poll suggests most Canadians don’t believe Harper on this and a large majority, 66 per cent, consider the PMO involvement in the Duffy affair a “serious ethical breach.”)

Those close to Wright insist that if he gave $90,172 of his personal funds to a sitting Conservative senator, it was under the best of intentions.

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"I don’t know of anyone with higher integrity than Nigel or with more honourable motivation to serve his country,” said Heather Reisman, a close friend and the wife of Gerry Schwartz, Wright’s former boss at the private equity firm Onex.

“He’s got terrific values, he’s tremendously generous, he’s an extremely loyal friend,” said longtime friend Tom Long, who chose Wright to be his son’s godfather.

“We found him a very ethical person, a straight shooter in terms of black and white and right and wrong, which is why this is so tragic. … I really think he is an extremely ethical person,” said Preston Manning, the former Reform Party leader, who, after meeting him socially, recruited Wright to sit on the board of the Manning Centre.

Wright was a natural for the position, Manning said, because of his long-time involvement in Conservative politics and his free-market thinking. It didn’t hurt, of course, that he was based in Toronto and could help expand the centre from its Calgary base.

Just as he was prized at the Manning Centre, Wright was admired at the PMO.

‘A BIG BLOW FOR THEM’

Wright’s departure leaves a big void.

“This is a big blow for them, and this is not something that is easy to come back from,” said David McLaughlin, former prime minister Brian Mulroney’s chief of staff. “Every chief of staff is important, but some chiefs are more important because of who they are and what they bring.”

While Harper’s new chief – Ray Novak – is universally liked and respected, Wright’s Bay Street background lent the PMO credibility with the business community. His expertise and shepherding of several high profile free-trade deals will be missed, several high-placed sources in government said.

“Nigel’s skill sets were unique, in that he had both significant political experience and – even more significant – real world business experience at a time when the economy is the central issue in the country,” said Goldy Hyder, a lobbyist with Hill + Knowlton Strategies, the firm that represented the China National Offshore Oil Corporation (CNOOC) in its successful $15-billion takeover bid of Canadian oil and gas company Nexen.

A file of that nature involved the chief of staff intimately, Hyder said. “His insight – whether one agreed with the final policy decisions or not – meant that one could comfortably say Nigel would have thought of all the angles and weighed the policy implications with the political ones."

Wright’s networks would have been extraordinarily valuable, especially in giving the government real insight into business in Canada and internationally, Long told HuffPost.

“He just knows a lot of people,” he said. “This is a big loss for any government, regardless of his political stripes.”

Although he was initially praised on Twitter, few MPs are now willing to speak about Wright publicly.

“Nigel Wright is a patriot. A man with honour. If he made a mistake, it was a gentleman's mistake. One made with the truest of intentions,” Conservative MP Ted Opitz wrote on May 19. Opitz refused an interview request.

Immigration Minister Jason Kenney tweeted: “Very sorry about Nigel Wright's resignation. Brilliant, decent man who made huge sacrifices to go into public service. We need more like him.”

Heritage Minister James Moore, who has been defending the government on the Senate scandal file, tweeted on May 19: “Nigel Wright is a great Canadian. Canada is stronger because of his service as Chief of Staff to our Prime Minister.”

Several Conservative MPs, PMO and ministerial staffers contacted for this story refused to be interviewed on the record but offered their insights on condition of anonymity.

Some felt Wright operated in a bureaucratic style and was not political enough. (Former chief Guy Giorno was much more of a political tactician who, along with Jenni Byrne, the Conservatives’ campaign manager in 2011, helped deliver Harper his majority.)

But Wright was seen as a “great problem solver,” who was well liked by caucus and a good manager of people in the PMO, said those close to the office.

“Nigel was deeply, deeply respected, more so than any other prime minister chief of staff I have seen in nine years,” one source said. “It was this sense of reverence that I think only comes from the private sector experience he brought.”

“He was a pleasure to work with – intelligent, courteous, listened respectfully to my views, responded with a good dialogue,” one MP said. “I have a tremendous amount of respect for Nigel. He was fantastic to me, but I don't see how he could have stayed.”

“Nigel did make a significant error, and he’s paying the price,” another Conservative source said. “People feel terrible for Nigel, but they think the Prime Minister made the right call in accepting his decision.”

COULD WRIGHT HAVE STAYED?

“I don’t think most people in the party expect the Prime Minister to step down, I don’t think that anybody accepts that that would be a logical result of this issue,” the source added. “The PM kept, although it is a difficult issue, accountable who was actually responsible for the issue. I see a lot of unease in the party, but I don't see a lot of unease with this particular issue because of who took the fall for it.”

It’s clear the Prime Minister’s Office had initially hoped Wright would weather the storm created by the May 14 CTV report that detailed the secret pact between him and Duffy whereby the senator would repay taxpayers for his inappropriate living expenses in exchange for financial help and a promise to “go easy” on him in an upcoming audit report.

For four days, Harper’s press team insisted that: “Nigel will not resign. He has the confidence of the Prime Minister.” But as the story progressed and media reports suggested Wright had not only arranged a payment to Duffy but may have interfered to ensure critical parts of a committee report on Duffy were deleted, Harper’s senior staff realized that Wright couldn’t hang on without the Prime Minister’s confirming that he approved of his chief of staff’s actions.

That Saturday, May 18, the weekend edition of the Ottawa Citizen ran a column by Scott Reid, former primer minister Paul Martin’s director of communications, who argued that Wright was just doing his job when he cut a cheque to avoid the government further embarrassment.

“...his job is, like that of all senior political aides, to fix things. To smother tiny flames before they become raging fires. To protect his prime minister and his prime minister’s government from political threat,” Reid wrote.

Ultimately, however, Reid concluded that Wright had “to go” for worsening the scandal considerably and bringing it right to the prime minister’s doorstep.

Three senior staffers privately told HuffPost they thought Reid was right. It was a conclusion Wright also came to. He resigned officially the next morning, May 19.

NO TRANSITION

Unlike the other two-to-three month transition periods that Harper’s previous chiefs of staff had enjoyed, this one came suddenly and without warning.

Novak, who had been at Harper’s side since 2001 and knew him and the government better than anyone else on staff, was asked to take over. Sources said it was a job Novak had not sought, but which he accepted when called upon. One source said there was no other choice but Novak – he was the “turnkey” chief.

Still, McLaughlin believes the transition has to be very hard on people on the inside, those around the party apparatus and also within the government, including the senior levels of the bureaucracy.

“You had an absolutely unplanned, abrupt rupture of the very centre, the heart of government,” he said. “That always leaves people very confused. It leaves them unsure, uncertain about who do we talk to on the file. What about those things that Nigel was working on? Where do they go now?

“The cascade effect of that across government has got to be profound and will take some time to sort out. It’s the iceberg under the surface.”

Wright’s files, for example, included CETA, the Comprehensive Economic Trade Agreement with the European Union, which is still not complete after officials missed several deadlines.

“If Harper was relying as much on Wright as the public was led to believe, then he has to be a bit at sea,” McLaughlin said.

Wright’s resignation came two days after another senior PMO staffer, Harper’s director of strategic communications Michael White, left his job – an unrelated departure that was planned several months earlier.

One top ministerial aide suggested that Wright’s departure may not be as monumental a blow to the government as the media seems to think. “Ray will be great; he is more than qualified,” one source said, echoing several others in government.

“He knows everything, the ins and the outs. He knows how to get things through, he knows the party, the caucus. He’s respected by everybody,” another former colleague of Novak’s said.

“He’s the only person where you go into his office and he says no to what you want, but you still come out of there happy,” the source added.

“Where it becomes challenging is when you compound Nigel with Mike. ... It's a critical mass thing,” a current staffer told HuffPost. “Mike was forward communications, nobody else. It's a huge loss” to the office.

Conservative strategist Jason Lietaer told HuffPost that Novak will have to focus on beefing up the office over the summer.

As the new chief, Novak is without a principal secretary – his previous job, in which he oversaw tours and operations as well as foreign affairs and defence files – and a strategic communications planner.

“I think that you lose a couple of key bodies and you need to add some bench strength and you’ve got to add some experience and some people that have been around and have some good ideas,” Lietaer said.

After Wright’s departure, staff in the Prime Minister’s Office were badly shaken. Novak relied heavily on deputy chief of staff Joanne McNamara and former issues management director Jenni Byrne – now the Conservative Party’s director of political operations. It is widely expected that Byrne will be back, in some fashion, in the PMO fold.

“Any difficulties like these are tough for morale and are tough to get through but I do believe that people value accountability and that matters from a staff morale point of view as well,” Lietaer said.

The problem with strongly disciplined governments is that, when the centre comes unglued, a lot of other things happen and uncertainty sets in, McLaughlin said.

“The challenge now for the Harper Government is to stabilize the ship, rebuild morale and find a new sense of purpose,” he said.

Many observers felt before the Duffy-Wright incident that Harper’s majority mandate had already run out of steam and was badly in need of a more focused agenda and a more positive message of where the party wanted to bring the country.

The Prime Minister’s office is carrying on with plans for a cabinet shuffle. There is also the party’s national convention in Calgary later in June and likely a Speech from the Throne this fall.

IMPACT OF WRIGHT’S DEPARTURE

Those who have benefited from Wright’s generosity in the past hope his experience will not discourage him from other party activities.

Mike Yen, a former PC candidate in Trinity-Spadina during the Ontario election, said he has attended three events at Wright’s home in the Annex neighbourhood of Toronto – including a $250-a-head fundraiser that Wright hosted in his honour.

That August 2011 fundraiser, which made national headlines after Wright had discouraged staffers from injecting themselves in the provincial election but hosted his own event for Tim Hudak’s PC candidates, raised $16,000 for Yen, nearly half of his total campaign expenses.

“(Wright’s) a super nice guy and seems to really care,” Yen said. “I’m sure he doesn’t have much time working in the Prime Minister’s office, yet he was able to take the time to come down here and help us. It means so much for a candidate in this riding that has trouble raising money because everyone knows you’ve got no hope,” Yen said. (Trinity-Spadina has been an NDP seat since 1999).

Tom Long believes the main impact of his friend’s attempt to “solve a problem” will make it harder to attract people like him into public life.

“It will act as a deterrent for other strong people to spend time in public life, and that is not a good outcome for any of us. We need to get people more involved in not-for-profit and in big public institutions and in public life, and we need more and not less of them,” he said.

Outspoken Conservative backbencher Brent Rathgeber suggested Thursday, however, that the main effect of the scandal will be that he, and other Conservative MPs, will face a much tougher race at the next federal election in 2015.

“I think my electors are satisfied with the job that I’m doing, but I’m sure my margin would be significantly less than it was in 2011,” he told reporters.

Rathgeber said he is disturbed that the PMO seems to operate without any accountability and that the office is interfering in the affairs of the legislatures. For a party that fought against the who-you-know-in-the-PMO attitude, the Conservatives haven’t changed much of the culture, he acknowledged.

“(T)hat’s why there’s a lot of disappointment amongst our base and why we’re all eagerly awaiting answers and a resolution to ensure that these types of incidents don’t happen again,” he said. “I mean, we’re all very, very disappointed in this.”