12/10/2013 03:38 EST | Updated 02/09/2014 05:59 EST

Duffy Expense Audit: Senate Speaker Nixes Liberal Bid To Probe Alleged PMO Interference


OTTAWA - The Speaker of the Senate has shot down a Liberal bid to investigate allegations that the Prime Minister's Office interfered in an independent audit of Mike Duffy's expenses.

Noel Kinsella rejected Liberal Senate leader James Cowan's argument that the alleged interference constituted a breach of senators' privileges.

Tuesday's ruling was based on Cowan's timing, rather than the merits of his arguments.

Kinsella said questions of privilege must be raised at the earliest opportunity but, in this case, Cowan waited two weeks to raise the matter after first learning about the alleged interference from RCMP documents filed in court on Nov. 20.

A favourable ruling from Kinsella would have sent the allegations to a Senate committee for further study.

That would have given the Liberals another chance to try to call two key witnesses alleged to have been involved in trying to tamper with the audit: Conservative Sen. Irving Gerstein and Deloitte managing partner Michael Runia.

The Conservatives have used their majority in the Senate to defeat previous Liberal efforts to have Gerstein and Runia testify. The Liberals have now run out of procedural options to try to get to the bottom of the matter, Cowan said.

"Somebody isn't telling the whole truth, somebody is hiding something, and at some point somebody's going to get to the bottom of it," Cowan said shortly after Kinsella's ruling.

"Maybe it will be the RCMP, maybe it will be the conflict of interest commissioner."

New Democrats were also claiming "coverup" Tuesday on another aspect of the Senate expenses scandal: Conservative MPs signalled their opposition to an NDP motion to study the PMO's policy of deleting the emails of staffers once they leave the government's employ.

The NDP wants the Commons access to information, privacy and ethics committee to examine the policy, which the Opposition believes is illegal. No decision was taken Tuesday but Prime Minister Stephen Harper's parliamentary secretary, Paul Calandra, said he'd vote against it.

The email issue arose last week with the revelation that potentially crucial emails from former PMO legal counsel Benjamin Perrin had not been deleted, as initially claimed by Harper's office.

RCMP documents suggest Perrin was intimately involved in negotiating a deal with Duffy to repay questionable living expense claims, on condition that he be fully reimbursed, that a Senate report on his conduct would not be critical of him and that there would be no question about his eligibility to sit as a senator from Prince Edward Island, although he lived primarily in Ottawa.

In the end, Nigel Wright, Harper's chief of staff at the time, personally paid Duffy $90,000 so that he could reimburse the Senate.

According to witness statements and emails obtained by the RCMP, Wright enlisted Gerstein's help in concocting the deal with Duffy.

Gerstein, who heads the Conservative party's fundraising arm, initially agreed the party would reimburse Duffy but ultimately balked when the tab rose to more than $90,000.

At Wright's behest, Gerstein also talked to Runia, who audits the Conservative party's books, in a bid to ensure the Deloitte audit of Duffy's expenses would make no finding as to the senator's primary residence — which it did not.

Gary Timm, lead auditor on the Duffy file, has confirmed Runia called him to inquire about how much money Duffy would owe if his expenses were deemed invalid. But Timm and his audit team insist no information was given to Runia and the integrity of the confidential audit was in no way compromised.

However, the RCMP documents suggest Wright and other top PMO aides already knew that Duffy owed just over $90,000.

The documents also suggest PMO aides knew Deloitte would make no finding about Duffy's primary residence — one month before the auditors reported their conclusions to the Senate.


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