Party of One (48 page)

That Mike Duffy was a key Conservative fundraiser was beyond question. Citing a series of emails, journalist Leslie MacKinnon posted a CBC piece on May 31, 2013, that showed Duffy had
been discussing an expanded role in the party within months of being appointed to the Senate. He was the star speaker at fundraisers and Conservative riding associations across the country. People loved his folksy, funny style, described as “Hilarious, engaging and delightfully risqué.” “Did you hear the one about Michael Ignatieff doing the work of three people—Curly, Larry and Moe,” offered a gleeful Duffy.

Partisan crowds in towns such as Lacombe, Alberta, loved him, and small-town newspapers that relied on government ads eagerly quoted his speeches. Everyone wanted to put his star power to work, and that included Stephen Harper. In June 2009, Duffy had hosted a $100,000 campaign-style town-hall event featuring the prime minister and his Economic Action Plan in Cambridge, Ontario. The CBC obtained a July 2009 email exchange between Duffy and an unnamed party insider. Just six months after his appointment, Duffy was looking for ways for the party to pay his expenses and fees for what he called his “expanded role in the party.”

According to a July 27, 2009, email from Duffy, the newly minted senator planned to speak with Irving Gerstein at the Senate golf tournament banquet that evening. Apparently Duffy had already suggested to the party bagman that he be named a minister without portfolio so he could get staff, a car, and more resources to assist in his travelling fundraising show. In the email, Duffy reported, “He [Gerstein] laughed and said he didn’t think THAT was within the realm of the Cons fund. So my question is: what do I demand?” Duffy answers his own question “(That the Cons fund hire my private company, and I use that cash to hire additional staff to assist with these gigs?).” He asks should he have a meeting with Marjory, or “Should I request a one-on-one with Stephen?” A few hours later, Duffy’s obviously well-connected correspondent replies,

I would keep the discussion with Irving. Expanding it at this time would attract too much attention. Any money, staff, resources paid for by the fund should be done by the fund. Keep it out of your company and office budget or it will hurt you down the road. If he can set up a travel budget for you at the fund and support a staffer, fantastic. What you really need now is travel paid by them so you don’t get in trouble or run out of points. Have a billing acct, [name deletion] knows to book certain trips to them and not you etc. Don’t take a credit card, just expense them.

Asked to comment on the story, party spokesperson Fred DeLorey replied, “Any events Mr. Duffy participated in on behalf of the party would have been paid for by the party. The party does not pay Mr. Duffy compensation.” After hearing the story, MP Michelle Rempel told Evan Solomon, the host of CBC TV’s
Power & Politics
, “The prime minister himself has expressed deep regret for appointing Mike Duffy.”

After the Wright/Duffy affair blew up, Harper may have regretted the Duffy appointment, but he was certainly happy with it when the former television personality was on hand to help win coveted Toronto seats. On November 16, 2010, Duffy hosted a successful town hall for the Vaughan by-election that sent Julian Fantino to Ottawa. The call went out to 40,000 homes and 15,000 people stayed on the line. The event, organized by Andrew Harris of Picea Partners, was closed to the media. Harris had been the manager of direct voter contact for the Conservative Party of Canada from May 2006 to November 2008.

But there was mystery attached to the event. Although a media release said Duffy was on hand in Mr. Fantino’s office to facilitate the meeting, Duffy denied it: “I wasn’t in Vaughan, I can’t remember where I was but I was at the end of a phone, as was
Mr. Fantino. I wasn’t paid, nor did I incur expenses. I know nothing about the Elections Canada Act and reporting.”

If he wasn’t paid for the Vaughan town hall and if he incurred no expenses, he certainly did so in other ridings. In September 2009, Duffy emailed the executive director of the Conservative Party, Dan Hilton, and asked about billing procedures: “Dan: Shud [
sic
] I send you a one-page note re fees and expenses?” Duffy requested a staffer be assigned to him to help answer emails from supporters sent in response to a party email appeal, “before people get pissed off that we haven’t responded.” The emails were from Conservative VIPs and others who expected to hear from the party directly. “The Old Duff” sent out personalized video messages from the Conservative Party. He called the recipients by their first names and invited them to fill out a survey.

Duffy had asked people to write to him about suggestions for the party, and he was concerned that he was the mere front man for an enterprise controlled by others. In an email to Dan Hilton on September 28, 2009, he laid out his fears: “If my name is out front, then I want to be part of the decision making process. If it goes bad, I’m the one our members will blame.” Hilton replied, “I have arranged to set funds aside where it makes sense and I have discussed this with Jenni Byrne. She should be the primary person on our end to square up the appropriateness of visits etc and she can review the schedule from your assistant to see if their ridings are of influence in the area.”

Duffy was addressing university clubs, riding associations, and fundraisers since, as a minority government, the party was in permanent campaign mode. The question was whether this was Senate business or party business or funny business. Duffy’s friends would later be quoted telling the
National Post
that “political appearances on the Senate tab were not only tolerated, they were expected by the Prime Minister.”

While the PMO, Duffy’s lawyers, and the Senate leadership had been cobbling together a deal to repay Duffy’s “improper” housing allowance and expenses, the RCMP had been quietly looking into the Deloitte audit since March 2013. One of the things that caught their eye was a series of payments made by Senator Duffy to a company called Maple Ridge Media Inc. Maple Ridge was paid out of Senator Duffy’s office budget at the rate of $200 per hour. The payments began in March 2009, and by 2013 amounted to a total of $64,916.50.

The billing seemed straightforward enough from the paperwork. For example, Duffy submitted an invoice to the Senate for $10,500 for “Consulting/editorial Services—research, writing & revisions for Heritage Project.” In November 2010, Duffy submitted a contract for Maple Ridge that he requested be backdated to April. After being informed that backdating was not permitted by the Senate human resources officer, Senator Duffy resubmitted the $12,000 contract, plus tax, in December. There was only one problem: the man behind Maple Ridge, Gerald Donohue, had no experience as a media consultant. Donohue had spent most of his working life as a television technician, and ended his career in human resources. He had first met the TV star in 1989 while Duffy was hosting a public affairs show,
Sunday Edition
, broadcast out of CJOH in Ottawa. The RCMP decided to interview the man on the senator’s payroll to find out exactly what Maple Ridge had done to earn its money.

They were in for a surprise. Although Donohue refused to give a sworn statement, he told the RCMP that he did not personally receive any money from the senator and that “he never funneled any of the money back to Duffy.” Donohue’s wife and son were officers of Maple Ridge, but he told police that they “had nothing to do with the work done for Senator Duffy.” (Both declined to be interviewed by the RCMP.) It was a conundrum. If Donohue’s
family was not involved in working for the senator, and Donohue never received any money or remitted any to Duffy, where did the nearly $65,000 go? The Donohues decided to consult a lawyer, and the RCMP went away from the interview believing that little or no work had been done by Maple Ridge, a conclusion they noted in their report. Their next stop was to scoop the bank records to follow the money trail.

Unaware of this element in the Duffy case, the Senate had been reduced to desperate measures. The expenses scandal was not only not going away, it was getting worse. The NDP were calling for the abolition of the unelected Upper Chamber, and from the prime minister’s point of view, it seemed like a good time to start that debate—anything to change the channel from corruption in his own office. Attacking the Senate had never been better politics.

In full panic that the institution itself was in danger, the Senate acted. On June 6, 2013, the leadership agreed to have federal auditor general Michael Ferguson do a “comprehensive audit” of Senate spending—including that of individual senators. It was one way to restore public faith in the probity of the Senate. Although Sheila Fraser had prised open the books of the Senate in 2011, shortly before she retired, her audit had not included senators’ expense accounts. The Senate had decided to conduct its own random audits instead, and inadvertently got the expense scandal rolling, to the chagrin of the PMO.

Michael Ferguson’s audit was the real deal, right down to powers of subpoena. The audit could include physical inspections of primary and secondary residences, and even interviews with neighbours to see if senators really lived in their designated residences. Numbered letters were sent to each senator. Consent letters had to be mailed back to the AG’s office. Secrecy would be maintained by forbidding reproduction and distribution of the documents.

The formal motion to bring in Michael Ferguson was moved by Senator Marjory LeBreton: “That the Senate invite the auditor general of Canada to conduct a comprehensive audit of Senate expenses, including senators’ expenses.” It was an ironic turn of events. The Senate had initially wanted to deal with “a few bad apples” in its midst to avoid the very thing they were now proposing: a universal audit of all members. Under LeBreton’s doomed leadership, the Senate was no longer master in its own house.

The Senate, the PMO, and the Conservative Party of Canada were now firmly tangled in the net of Duffygate. On June 7, 2013, the Conservative Party responded to a story by the CBC’s Greg Weston. Weston’s report said that there was a secret Conservative fund in the PMO controlled by one person, Nigel Wright. Weston quoted unnamed sources who told him that at times the fund had contained up to a million dollars. The political air in Ottawa was electric with the possibility that the secret fund—beyond the reach of Elections Canada and the auditor general—was in some way connected to Wright’s $90,000 gift to Senator Duffy. “No Conservative Party funds were used to repay Mike Duffy’s inappropriate expenses,” party spokesperson Fred DeLorey claimed. “No taxpayer funds were used. Nigel Wright was not reimbursed by anyone.”

After PMO spokesperson Andrew MacDougall, Fred DeLorey, and a variety of anonymous sources had all but confirmed the existence of the PMO fund, the Conservative Party tried to backtrack. It now called Weston’s story about a “secret fund” false. But its contradictory attempts to deny the existence of the fund, in effect, confirmed the story. Finally, Chris Alexander, the parliamentary secretary to the minister of national defence, told CBC Radio’s
The House
on June 8, 2013, that “No one [was] denying” the existence of the fund. Although parties must reveal all donations to Elections Canada, political parties are under no obligation to account for how they spend their party funds between elections.

The pressure was beginning to take its toll. On June 11, 2013, Senator David Tkachuk stepped down as chair of the powerful Internal Economy Committee. He announced that he was being treated for bladder cancer: “It’s really important I have no stress and I give it all the opportunity to succeed, because if I don’t succeed, the consequences aren’t that good.” In passing, the outgoing chair acknowledged that he found it personally difficult to read the emails he was receiving from ordinary Canadians angered by the Senate scandal.

Tkachuk’s empty seat on the committee was still warm when Canadians learned that it was not merely a scandal they were watching unfold in some of the highest offices in the land, but quite possibly a crime.

sixteen

MOUNTIES AT THE DOOR

O
n June 13, 2013, the R CMP announced that it had launched a criminal investigation into Nigel Wright’s secret $90,000 gift to Senator Mike Duffy. According to their press release, the police were trying to “determine whether a criminal act has taken place. It [the investigation] must be meticulous and carefully examine all information.” Stephen Harper’s director of communications of the day, Andrew MacDougall, made clear that the PMO wasn’t volunteering anything but “would provide any possible assistance if asked.” It was a novel reaction from a law-and-order government: passive cooperation.

Since the RCMP was now involved, Ethics Commissioner Mary Dawson suspended her investigation into the propriety of Wright’s payment to Duffy. News of the criminal investigation broke just before Question Period in the House of Commons. The prime minister was in Europe attending the G8 and high-level trade talks, leaving heritage minister James Moore to take the heat from the opposition, and, if possible, change the channel.

The incoming from the enemy lines started early. NDP MP Megan Leslie launched the first rocket, telling the government to “stop hiding,” to produce Wright’s cheque, and to tell the House who else in the PMO was involved in the secret deal. The affable Moore parried with sarcasm, asking rhetorically why NDP leader Thomas Mulcair wasn’t in the House. “We know he is on the Hill,” Moore quipped, drawing laughter from the government benches. It had made the news earlier that day that Mulcair had driven his car through a security checkpoint on the Hill without stopping, a small act of petulance creating a minor dust devil that disappeared in the act of forming.

The big story just kept getting bigger. Given the new development, Nigel Wright may have wished he had gone into the priesthood after all. The announcement of a criminal investigation changed everything for both men at the centre of the affair. They were no longer dealing with a political scandal but with a serious and personal legal problem. One Canadian senator, Raymond Lavigne, was already collecting his pension in jail after being convicted of fraud and breach of trust. Senator Duffy hired respected Ottawa criminal lawyer Donald Bayne, whose advice to the senator was to keep his powder dry. Wright’s legal team took a very different approach.