10/26/2016 05:31 EDT | Updated 10/26/2016 05:36 EDT

Mike Duffy Should Be Repaid Money Seized By Upper Chamber: Sen. John Wallace

3 senators accused of overstepping authority.

OTTAWA — An independent senator says three fellow senators acted inappropriately and “without proper authority” when they decided among themselves to direct the upper chamber to claw back close to $17,000 from Sen. Mike Duffy’s paycheques.

The Senate’s internal economy committee should now do the right thing and return the money seized so far from the PEI senator, New Brunswick non-partisan Sen. John Wallace writes in a letter addressed to the Senate’s leadership and obtained by The Huffington Post Canada on Wednesday.

Sen. Mike Duffy leaves an Ottawa courthouse on April 21, 2016. (Photo: Adrian Wyld/CP)

The right thing, according to Wallace, is for the committee to:

  1. immediately revoke and rescind a decision that Duffy received an overpayment of $16,955 for ineligible expenses;
  2. immediately revoke and rescind any further seizure from Duffy’s paycheques;
  3. and immediately reimburse and return to Duffy all the amounts that have been seized so far.

Earlier this month, Wallace, a new member of the committee, asked its chair, Conservative Sen. Leo Housakos, how the decision to seize funds from Duffy had been made. Was it taken by the full committee, Wallace asked. Or by the three-person subcommittee, on “which, of course, the majority, two of three members, are of the same political caucus.”

Wallace noted that he had not been called to a meeting with the other members to decide what to do about Duffy’s expenses, and he suggested Housakos had not followed the proper procedure.

The subcommittee “seems to exercise a lot of authority,” he said during a section of the Oct. 6 meeting that was open to the public.

Housakos was defensive, saying the subcommittee is administrative. “It’s not a body that takes decisions,” the chair of the subcommittee said.

Sen. Leo Housakos is shown at a 2015 press conference in Ottawa (Photo: CP)

“Just to clarify in your comments that it is a committee that has considerable powers, I can assure you that Senator [Jane] Cordy, and myself, and Senator [David] Wells, don’t feel by any means [that we] have any considerable power other than the power that this committee gives us.”

Housakos said he wanted to assure Wallace that “we take no decisions, nor in terms of fiscal spending, or policy decisions without consulting this committee — without getting guidance from this committee.”

A number of Duffy’s expense claims flagged by the Senate’s finance branch were not presented in the courtroom as they had been initially presented and approved by the upper chamber, Housakos said.

“It was brought to this [internal economy] committee’s attention that there were a number of those expenses. This committee determined what those next steps were and they gave us guidance in taking those next steps,” Housakos said.

Former prime minister Stephen Harper is given a tour of the Saint John harbour by John Wallace in 2006. (Photo: CP)

Wallace’s letter states, however, that Housakos’ subcommittee received no such guidance.

In July, the three-person subcommittee — Housakos; Cordy, the Liberal deputy chair; and Wells, another Conservative, informed the other 12 members that Duffy had received an overpayment of $16,955 for ineligible expenses and instructed the Senate to reduce Duffy’s allowance by 20 per cent until the funds were recovered.

The subcommittee explained its decision by saying Duffy had refused to reimburse the money and had communicated that he did not plan to use the arbitration process set out to resolve such disputes.

The $16,955 represents seven claims Duffy made to the Senate, from a makeup service to an exercise trainer who, Duffy said in court, also served as a policy consultant. The Senate said $3,142 was for ineligible travel expenses and $13,813 was for other inadmissible expenses.

In this artist's sketch, Sen. Mike Duffy responds to defence lawyer Donald Bayne at his trial in Ottawa, Monday, Dec. 14, 2015. (Photo: Greg Banning/CP)

Duffy’s lawyer, Donald Bayne, wrote to the Senate in June saying all those expenses had been reviewed in court and found to be in compliance with the Senate’s administrative rules, policies and guidelines. Justice Charles Vaillancourt had “fully exonerated” Duffy, Bayne said.

Wallace wrote in his letter Wednesday that it should have been the full committee — 15 senators, representing nine Conservatives, four Liberals and two independents — that decided Duffy’s case. The subcommittee, Wallace stated, should have submitted a written report to the full committee with its recommendations for thorough and thoughtful consideration.

“I have been a member of the Internal Economy Standing Committee since June 8, 2016, and at no time have I received a copy of any such written report from the [subcommittee], nor was one provided to me by the Clerk following the October 6th Internal Economy meeting,” he wrote.

The three-person subcommittee, Wallace noted, is authorized to act only in specific and limited ways. The Parliament of Canada Act allows the subcommittee to exercise the powers of the Internal Economy Standing Committee only when the chairs deems there to be “an emergency.”

Mike Duffy arrives for his trial in 2015. (Photo: The Canadian Press)

“In Senator Duffy’s case, and quite rightfully so, no such emergency ever existed, nor was one ever declared by the chair,” Wallace wrote.

This subcommittee, Wallace added, is empowered to make decisions on behalf of the full committee members only with respect to agenda and meeting schedules, or to resolve immediate administrative matters if the full committee is unable to meet.

“The issues at stake in Senator Duffy’s situation most certainly are not those that concern the administrative organization of agendas and meeting schedules.”

Wallace also noted that there was no request or attempt to convene a meeting of the full committee over the summer to discuss the matter.

"The issues that are raised by the seize and set-off of Senator Duffy’s sessional allowance, the issues behind that are of extreme importance to myself, and, I think, should be to all senators."

“Consequently, the steering committee/sub-committee had no authority to order the repayment by Senator Duffy of the disputed expense claims totalling $16,955 and the seizure or set-off of that amount from his sessional allowance,” Wallace concludes.

Wallace told HuffPost Wednesday that his letter raises concerns that are much broader than Duffy. Notably, that a three-person subcommittee could impose financial penalties on a colleague without broader approval of the Senate or a large committee of their peers.

“The issues that are raised by the seize and set-off of Senator Duffy’s sessional allowance, the issues behind that are of extreme importance to myself, and, I think, should be to all senators,” he said in an interview. “At this point, it is Senator Duffy who finds himself in this very unfortunate and difficult situation, but it is a situation that highlights broader issues that can impact any senator.

‘What does all of this add up to?’

“What does all of this add up to? How does it affect rights of senators? How should it affect rights of senators in particular as we move forward to create a new modernized Senate in the years ahead? … The issues are raised in a broader context,” he said.

Questions posed to the Senate on Oct. 6 were responded by Housakos’ spokesperson, Jacqui Delaney, who wrote in an email on Oct. 7 that “the offsetting of Senator Duffy's salary is in strict accordance with ‎the independent dispute resolution process adopted by the committee on internal economy, budgets and administration in 2015 to ensure senators were no longer sitting in judgment of other senators when it comes to senators' expenses.”

Delaney said the subcommittee had followed the proper procedures.

While she did not provide a copy of any written report presented to the full committee with the subcommittee's recommendations regarding the Duffy case, she did forward a copy of an email, dated July 28, that communicated the subcommittee’s decision to all members.

‘Immediate administrative problem’

In an email, on Wednesday, Delaney said the subcommittee was fully within its rights to act over the summer, because this was an “immediate administrative problem.”

The rules state that “if the full committee is unable to meet, the subcommittee on agenda and procedure (steering committee) [is] authorized to deal with and resolve immediate administrative problems,” but that it must report its decisions at the next full meeting, she noted.

In his letter, Wallace also noted two perhaps equally troubling matters that were also raised by Independent Sen. Anne Cools in conversation with HuffPost this month.

The dispute resolution process was never presented to the Senate to be debated and approved to become part of the upper chamber’s rules, Wallace observed.

Senate can do what it wants

The internal economy committee also has no express right or authority under the Parliament of Canada Act to seize or set off the amount of any disputed expense claims against a sessional allowance, he said.

The law currently allows the Senate only to deduct $120 a day beyond 21 days that a senator does not attend a sitting of the Senate.

The Senate, as a whole, of course, can decide to do what it wants.

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