Party of One (50 page)

The Conservative Party phone bank tracks it all, and the prime minister receives regular reports from Jenni Byrne, the former director of political operations for the party, now in the PMO. It goes to the heart of the Conservative formula for winning: holding the base at 30 percent and adding 7 to 8 percent more at election time equals a majority government—or at least for as long as the progressive vote is divided.

Money and politics is sometimes a shady combination. Gerstein and three other senior Conservatives—Michael Donison, Susan Kehoe, and the late Doug Finley—were all charged by Elections Canada with devising an illegal scheme that allowed them to spend a million dollars above the limit on advertising during the 2006 federal election.
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It also allowed local candidates to claim rebates for expenses they never incurred. The so-called in-and-out scandal was settled when the party pleaded guilty to a lesser charge in return for the charges against the individuals being dropped. In the end, the party paid a $52,000 fine and returned $230,000 to the government.

Just as Nigel Wright had already told investigators, Gerstein confirmed that he had spoken on a conference call with Wright in
February 2013. The Mounties discovered that Conservative Party lawyer Arthur Hamilton was also on the line. Wright had told police that Gerstein had initially offered to help with the Duffy matter. Gerstein told investigators a slightly different story—that Wright had asked him to pay Duffy’s expenses and legal bill, and Gerstein had said “it was something he would consider.”

One of the concerns the party bagman had was that Duffy might not keep the arrangement confidential. If Conservative Party donors were to find out that their money had been used to bail out an expenses cheater, there would be outrage. And there were also tax implications, since donors get a generous tax rebate for political donations. Taxpayers as well as Conservative Party contributors would not be happy if they learned they were picking up the tab for Mike Duffy or any other senator, beyond what the rules allowed.

Gerstein explained that Wright had initially told him that the senator owed $32,000 but afterwards confirmed that the amount was $90,000. The chair of the Conservative Party Fund emphatically refused to write the cheque. Nigel Wright was apparently left holding the bag. When next Gerstein spoke to the PM’s chief of staff, on March 1, 2013, Wright surprised the senator by telling him that he had decided to personally repay Duffy’s expenses. According to what Gerstein told the RCMP, word was certainly getting around. The president of the Conservative Party of Canada, Dan Hilton, also knew about the secret payment.

Two weeks later, the Senate scandal widened to include someone very close to Stephen Harper. Carolyn Stewart Olsen had been the prime minister’s long-time press secretary and strategic communications advisor before Harper appointed her to the Senate in 2009. He can’t have been happy to see
The Huffington Post
reporting that Stewart Olsen had claimed per diems and other expenses when the Senate was not in session for a three-month period
ending February 28, 2011. Stewart Olsen vigorously denied the allegation, but the new chair of the Internal Economy Committee, Senator Gerald Commeau, asked Senate finance officials to review Stewart Olsen’s expenses. Stewart Olsen chose this moment to step down from her spot on the committee, joining Marjory LeBreton and David Tkachuk as high-ranking Conservative casualties of what was now being described as the bloodbath in the Senate.

The narrative was about to turn pure Hollywood. Police and paramedics were called to Senator Patrick Brazeau’s house twice during the night of October 2, 2013. The calamitous senator who had been arrested eight months earlier and charged with violent assault and sexual assault was taken to hospital, possibly suffering from depression or other health issues. No further details emerged.

Just two weeks later, Senator Mike Duffy issued a press release about his health. With a long history of heart problems behind him, including open-heart surgery, he said that his doctor wanted him to take immediate medical leave because of his deteriorating condition.
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The press release came one week after court documents revealed that the RCMP was now investigating the senator for potentially new breach-of-trust and fraud charges related to contracts paid out of his Senate office budget to an old friend from his CTV days with no known experience as a consultant.

Duffy’s press release came just hours before the Harper government’s new leader in the Senate dropped a bomb of his own. Claude Carignan announced that he would be tabling a motion to suspend Senators Duffy, Brazeau, and Wallin without pay on the grounds of “gross negligence.” The warfare was now open and brutal, and no one was taking any prisoners.

On October 21, Senator Duffy’s criminal lawyer, Donald Bayne, held a packed press conference at which all the skills that made him a crack criminal lawyer were on display. As though he were playing to a skeptical jury, Bayne stated his client’s case energetically
and eloquently. He read from the now-famous February 20, 2013, email giving details about the Wright/Duffy deal and emphasized that all roads in the scandal led back to the PMO. It was the PMO, he declared, that worked out the “lines” and “scenarios” to meet Duffy’s concerns, “including cash for payment.” The virtuoso performance also featured a tease. Protesting that he wasn’t about to try Senator Duffy’s case in the media, Bayne said that his client had information about what the prime minister knew about the deal that the press would find most interesting.

Bayne’s press conference was mere prologue. Over the next two days, the three senators showed up in the Red Chamber to personally challenge the motions to suspend them without pay. Though he was just weeks away from more open-heart surgery, Duffy made a remarkable speech. Forty years of communicating for a living—on radio, television, and countless stages across the country—were on display. Duffy was critical and contrite, painting a picture of ruthless schemers in the PMO who had forced him to do something that was against his will: “I allowed myself to be intimidated into doing what I knew in my heart was wrong out of fear of losing my job and out of a misguided sense of loyalty.” With his fellow senators, journalists, and a large part of the country listening to the famous voice, Mike Duffy lowered the boom: “I wish I’d had the courage to say no back in February when this monstrous political scheme was first ordered.”

The next day it was Pamela Wallin—another star Harper Senate appointee who had had her expenses forwarded to the RCMP—who took the stand. As falls from grace go, it was almost Shakespearean. A celebrated television personality and former diplomat, she had received the Order of Canada, once chaired the powerful defence committee, and served on the Foreign Affairs Committee. Then there were the corporate connections. As a senator, Wallin had been on the boards of several companies,
including Bell Globemedia, Oilsands Quest Inc., Porter Airlines, and wealth management firm Gluskin Sheff & Associates. Since becoming a senator, Wallin had earned $1 million in fees and stock options from these connections, beyond her Senate salary of $132,300. Oilsands Quest was the most lucrative, earning Wallin almost $648,000 in cash and offered options between June 2007 and December 2011.

Although all this extra income was allowed under Senate rules, the connection with Oilsands Quest was not without controversy. The company filed for bankruptcy in an Alberta court in November 2011, and under Chapter 15 protection in the United States. Its assets in northern Saskatchewan were sold to energy giant Cenovus. In August 2013, a US court approved a multi-million-dollar settlement in a securities fraud case against Oilsands Quest and its directors. In a lawsuit filed in New York in 2011, investors alleged that the company overstated its assets by $136 million and fraudulently pumped up the stock price. The judge who signed off on the $10.2 million settlement had also presided over the case involving infamous ponzi schemer Bernie Madoff. Luckily for Wallin and the other directors, the insurer of the bankrupt energy exploration company paid the fine.

Wallin’s speech to the Senate was a passionate defence. She accused fellow Conservative senators Marjory LeBreton and Carolyn Stewart Olsen of having a personal vendetta against her. As for the audit that found her guilty of running up improper expenses, the former CTV television personality called it a “fundamentally flawed and unfair process.” Five days later, the RCMP laid out fraud and breach-of-trust allegations against Wallin in court documents. Investigators were seeking more documents from the Senate related to changes the senator had made in her daily calendars. They cited “inconsistencies and discrepancies” in the calendars that warranted further investigation. The RCMP
also believed that Toronto, rather than Wadena, Saskatchewan, was Wallin’s primary residence.

With the Conservative leadership in the Senate flexing its muscles, the prime minister decided to personally join the effort to sink Duffy, Wallin, and Brazeau. On October 26, Harper took to the airwaves in Toronto on John Tory’s CFRB drive-home show in a carefully controlled event with a government-friendly host. The PM claimed that he had ordered Senator Duffy to repay his expenses because it was “beyond a shadow of a doubt” that Senate rules were broken over a long period of time. Harper also repeated a story that fewer and fewer Canadians believed—that he knew nothing about the $90,000 gift from Nigel Wright to Mike Duffy: “Look, John, obviously I didn’t know, and obviously had I known about this, I would have told Mr. Wright not to undertake these actions.” A new element was creeping into the PM’s account—a faint note of feeling aggrieved that would fully declare itself two days later, with serious implications for his former chief of staff. “I should have been told, I think I should have been consulted. I was not.”

The fact that the PM was doing radio interviews was a telltale sign that, far from losing momentum, the scandal was gaining traction by the day. The damage to both the party and the prime minister was showing up in the polls. Since it had taken four days for the prime minister to accept Nigel Wright’s resignation, it looked as though he was condoning what had happened. His false claims that no one else in the PMO knew about Wright’s secret payment were now almost laughable. The real issue seemed to be that Stephen Harper was the only one who didn’t know—despite being the most controlling prime minister Canada has ever had.

So on October 28, 2013, Harper changed his story again, casting himself as a decisive leader who wouldn’t put up with lies and deception. He told Jordi Morgan—a former Canadian Alliance
candidate and host of News 95.7’s
Maritime Morning
show—that Nigel Wright “was dismissed.” This was a jarring departure from Harper’s previous statements: first, that Wright enjoyed his full confidence and would not be leaving his post, and then his reluctant acceptance of Wright’s resignation four days later. Now the PM was claiming for the first time that Nigel Wright had been fired.
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Wright had a cadre of longstanding supporters who were taken aback at the news, some of them openly doubting the credibility of the prime minister’s latest version of events touching the scandal. Praising Wright as one of the most able and ethical people he had ever met in politics and business, Preston Manning suggested he would be vindicated, noting, “I think it’s his [Wright’s] account, at the end of the day, that will be the most credible account of what actually happened.” Manning also suggested darker motives that might be behind Harper’s new claim. “I think the first story was the correct one,” he told Mark Kennedy of the
National Post
. “The deeper these things get, the more people are backed into corners.” It had been Manning’s experience that “Stephen doesn’t think words mean much.”
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Even Conservative cabinet ministers seemed uncomfortable with Harper’s latest version of events. Both Jason Kenney and Peter MacKay lauded Wright’s hard work for the party and vouched for his integrity. Charles McMillan, who had worked with Wright in Brian Mulroney’s PMO, delivered the sharpest rebuke of Stephen Harper’s scapegoating of his former chief of staff: “. . . to put the blame of this whole saga on Nigel is nuts. . . . I think there is a larger story here with a whole series of players. . . . It’s like an iceberg. There’s a larger story under the water.”

It was at that moment that the man nicknamed “the Killer Whale” by government insiders breached the surface again and rocked the government’s boat. Coming straight from Ottawa’s Heart Institute, Mike Duffy’s passionate voice rang out in the
Senate chamber a second time. It was another headline event, occurring as it did just three days before the Conservatives held their national convention in Calgary on Halloween.

Not only had Nigel Wright paid $90,000 of Duffy’s disputed expenses, but Canadians learned that he had arranged a second cheque from the Conservative Party Fund for the senator’s legal fees—$13,560. The cheque had been sent by Arthur Hamilton to Duffy’s lawyer, Janice Payne. Duffy gave another masterful speech proving again that he was skilled in the art of the political knife fight. And just so there was no doubt the party had paid his legal bills, he tabled both the cheque and the transmittal letter in the Senate. Duffy knew that, in just a week, the Senate would be voting on Claude Carignan’s motion to suspend him from the Senate without pay, and he may have been trying to make clear that there would be consequences for the party if that happened.

Senator Wallin, also facing expulsion without pay and an RCMP investigation, paid back a total of $152,908.77 in improper expenses hoping that it would be enough to persuade her colleagues not to vote in favour of the motion. She insisted once more that she had been mistreated by the Senate and the auditors at Deloitte.

Senator Duffy’s revelation of a second cheque turned Question Period into an inquisition directed at the prime minister. Day after day, Opposition leader Thomas Mulcair skewered him. It was the NDP leader’s strongest performance, with Mulcair outshining the more reserved Justin Trudeau and showing brilliant flashes of a person who could be prime minister. When Harper tried to pass off the payment of Duffy’s legal bill as “normal,” Mulcair shot back, “The prime minister, therefore, sees nothing wrong with using the money of the Conservative Party to reimburse the legal expenses of someone he says has broken the law. That is the ethics of the prime minister. Duly noted.” Liberal leader Justin Trudeau had an observation of his own that was on a lot of people’s minds: “I
think donors are beginning to wonder how this party administers their donations.”