11/22/2013 04:56 EST | Updated 01/25/2014 04:01 EST

Harper Dodges Questions On Alleged Meddling Into Duffy Audit


OTTAWA - Prime Minister Stephen Harper dodged questions Friday about alleged attempts by his people — including the party's top bagman — to meddle in and even quash an independent audit of Sen. Mike Duffy's contested expenses.

But Harper's own Conservative senators appear to want to lend the issue more scrutiny. RCMP files made public this week included emails from Harper's staff and interviews from key players describing how they sought to cut short the work of auditing firm Deloitte in order to avoid any damning statements on Duffy.

Members of Harper's staff appeared to receive inside information about the audit even before senators who sit on the committee that was studying Duffy's expenses.

Duffy and Nigel Wright, Harper's former chief of staff, face police allegations of bribery, fraud and breach of trust. No charges have been laid.

At an in-camera meeting Thursday, sources say Liberal Sen. George Furey put forward a motion to summon Deloitte's auditors before a meeting next week of the internal economy committee. All Conservatives present — including Harper's former Senate leader, Marjory LeBreton — voted in favour of the motion.

Other Conservative senators have said publicly they're disturbed to learn of the extent to which the Prime Minister's Office was meddling in Senate affairs.

When asked Friday what the apparent efforts to influence an independent audit say about the culture in the PMO, Harper avoided the issue.

"There are two individuals who are responsible and who are under investigation," Harper told a news conference in Winnipeg.

"As we said from the outset, they are Mr. Duffy and Mr. Wright, and we will do everything to make sure the investigation proceeds and those who acted improperly are held accountable."

The RCMP documents detail an agreement between Duffy and the PMO to have him repay the disallowed expenses and acknowledge the repayment publicly. In exchange, he would be reimbursed, and an audit into those expenses would not pass judgment on whether his primary residence was in P.E.I. or in Ottawa.

Senate officials told police that Conservative senators David Tkachuk and Carolyn Stewart Olsen — two of the three members of a sub-committee studying Duffy's expenses — tried to stop the audit at different junctures. Tkachuk was also the chairman of the larger internal economy committee, traditionally treated as one of the most non-partisan bodies in the Senate.

"The non-partisan nature of the committee is a problem as is the Clerk who seems to have his own agenda," Stewart Olsen lamented to Wright in a March 1 email contained in the RCMP files.

When Conservatives on the committee were unable to get assurances through committee members that Deloitte would wrap up their audit of Duffy if he paid back his expenses, Wright asked Sen. Irving Gerstein — chairman of the Conservative Fund Canada — to reach out to "personal contacts" at Deloitte, which also happened to be the fund's auditor.

Gerstein did just that.

"Senator Gerstein has just called. He agrees with our understanding of the situation and his Deloitte contact agrees," PMO staffer Patrick Rogers tells Wright in another email. The agreement in question appeared to be that repayment by Duffy would render any further study on residency moot.

"The stage we're at now is waiting for the senator's contact to get the actual Deloitte auditor on the file to agree. The senator will call back once we have Deloitte locked in."

That call came two weeks later, on March 21. Gerstein, his Deloitte contact Michael Runia, and emails from the PMO all point to Deloitte having communicated that the audit would continue.

But much more information about the audit seemed to have leaked out to the Prime Minister's Office.

"They can't reach a conclusion on residency because Duffy's lawyer has not provided them anything. This is despite their attempts to use "public information" about Duffy's residence," Rogers told Wright on the same day he heard back from Gerstein.

"Their report will state that Duffy's lawyer did not provide information when requested. They were asked to complete the work by the end of March and plan to."

Deloitte auditors did not give a verbal update to committee members until a month after Harper's office was writing about what the report "will state." Tkachuk told police only Senate administrators spoke to Deloitte on substantive issues, and he was only apprised of the budgets and timing of their work.

In the meantime, Harper's office said it would be best if Duffy did not to co-operate further with Deloitte. When he began making noise in April about meeting with them and providing them with more documents, Senate administrators told Deloitte that was a good idea.

But it was not to be. Three days after that exchange, the Conservative-dominated Senate subcommittee wrote to Duffy telling him the audit had concluded.

Deloitte told The Canadian Press earlier this week that its Senate report was not influenced in any way by Gerstein or his purported contact at the firm.

"The forensic review of the Senate was being conducted by a team of highly professional and objective forensic accountants," spokesman Vital Adam said in an email Wednesday.

The firm has policies in place to spot potential conflicts of interest, he added.

"The Senate audit team established an ethical wall to prevent leakage of information," Adam said.

"In relation to your question, at no time was the ethical wall breached. No information related to the audit was provided to anyone who was not entitled to receive the information."

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