Party of One (47 page)

The piece on Stephen Harper’s political chessboard that he most wanted to keep had been sacrificed. It was an unusually humiliating moment for Harper, smacking of connivance rather than conviction. Just a few days before, he had said through his director of communications that Wright enjoyed his full confidence and wouldn’t be resigning. Now he had reversed himself without explaining what had changed. And if the goal had been as strategic as it looked—to stop the political bleeding—it was also a bad chess move.

The day after the prime minister accepted Nigel Wright’s resignation, Fife reported that Harper’s former special counsel and legal advisor Benjamin Perrin had worked on the legal deal between Wright and Duffy’s lawyer. According to Fife’s report, Perrin helped draft a memorandum of understanding: money would be provided for the payment of expenses and the Senate investigation would go easy on Duffy. According to Fife, the PMO declined to release the agreement, claiming that it was in the hands of Ethics Commissioner Dawson, who was investigating the payment.

Perrin, who left the PMO in April 2013, denied involvement. In a carefully worded statement released after the CTV story linking him to the payment, Perrin said, “Last night’s CTV story in relation to me, which is based on unattributed sources, is false. I was not consulted on, and did not participate in, Nigel Wright’s decision to write a personal cheque to reimburse Senator Duffy’s expenses. I have never communicated with the prime minister on this matter. In all my work, I have been committed to making our country a better place and I hope my record of service speaks for itself.” Perrin had left the PMO the month before to return to a teaching position at the University of British Columbia.
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The Senate scandal was turning into an exploding pumpkin for the government. The body count was growing—Duffy, Wallin, and Wright—and the prime minister’s credibility was now in play.
He was either clueless or conniving in relation to what was now being called Duffygate. With Fife’s latest story, there was a strong suggestion that there was much more to come. It was time for the prime minister to get out of Dodge.

Two days after the initial CTV story broke, the PMO had announced a trip to South America for the prime minister. He would visit Peru and Colombia, meeting with leaders and representatives of the private mining sector.
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With the flames of scandal licking at his office door, Harper was off to something called the Pacific Alliance Leaders Summit in Cali, Colombia, an alliance formed by Chile, Colombia, Mexico, and Peru in 2011. This was the first time the prime minister participated in the forum— a trading bloc that even some Tories had not been sure Canada should join. Pro–free trade Conservative MP Ed Holder pointed out to a House of Commons hearing in March 2013 that there was no real reason to join the Alliance since Canada already had free-trade agreements with all four members of the group.

Two hours before boarding the Challenger that would take him to South America, Stephen Harper conducted an unusual Tuesday caucus to address his MPs. It was normal Harper rules— a photo op without questions from reporters. Without mentioning any of the players involved in the story the whole country was talking about, Harper called the scandal a “distraction” from the government’s work and said that he was angry about it. “When distractions arise, as they inevitably will, we will deal with them firmly.” The PM ignored reporters who shouted out questions. The journalists were quickly drowned out by the applause of caucus members and then asked to leave. Liberal MP Ralph Goodale called Harper’s speech “totally vacuous” and “tone deaf.”

Relations between CTV and the PMO soured. The network had previously had an arrangement with the government to be apprised of big announcements the evening before they were made.
The news item would be previewed on CTV’s huge platform of over a million viewers, and the next day, the network would give full coverage when the initiative was officially announced. After the Wright/Duffy story was broadcast, that arrangement came to an end.

CTV’s Robert Fife gave me his own assessment of how the Harper government had reacted to his story of cash payments, shady deals, and possibly illegal acts rolling out of the Prime Minister’s Office: “Basically, it’s been one lie after another.”

fifteen

THE PINOCCHIO FACTOR

I
f Stephen Harper thought that shuffling off to South America would rid him of unwelcome questions about the Senate scandal back home, he must have been disappointed. The first question asked at his news conference in Peru, 6,000 kilometres from Ottawa, was posed by CBC journalist Terry Milewski. Predictably, the tenacious Milewski asked about the Wright/Duffy affair.

Harper insisted he knew nothing about it except what he had seen on television news, that he hadn’t been consulted in advance, and that if he had been, he would not have signed off on the arrangement. “I think we’ve been very clear that I did not know, but let me be very specific about this, I learned of this after stories appeared in the media last week speculating on the source of Mr. Duffy’s repayments. . . . Obviously I am very sorry that this has occurred. I am not only sorry, I’ve been through the range of emotions. I’m sorry, I’m frustrated, I’m extremely angry about it.”

The prime minister’s bland denials usually worked. But not this time. There were too many things that didn’t make sense. Why
had he flip-flopped on Nigel Wright’s resignation? First, Wright was remaining as chief of staff; then, a few days later he was leaving. What had changed? Was it plausible that Nigel Wright—a lawyer and the PM’s chief of staff—would make a $90,000 cash payment to a sitting Conservative senator and not inform the prime minister?

In his own resignation press release, Wright himself said only that neither before nor after the Duffy transaction did he inform the prime minister of the “means” of the payment. But that was a long way from saying the PM didn’t know about the Duffy expense problem and what, if anything, he wanted done about it. A series of nagging questions trumped Harper’s standard dismissiveness. How was the deal negotiated and who was involved? Could Wright freelance such a deal, even had he wanted to, without involving others? Most unbelievable of all, how could a leader with a well-earned reputation as a micromanager know nothing about a most unusual action, undertaken by his secondin-command, that had the potential to topple the government?

While Harper clung to his talking points in Peru, the political pot was on the boil back in Canada. Government MPs were getting blowback over the Senate scandal as the Conservative base registered its anger and disapproval over Duffygate. For many Tory supporters, the skullduggery in the PMO and the abuse of expenses in the Senate were what they expected from Liberals— not from the self-declared party of law and order, transparency, and accountability. The Conservatives began to slide in the polls. Like the $16 glass of orange juice at the Savoy Hotel in London that cost Bev Oda her cabinet post, this was one of those “watercooler scandals” that got ordinary people talking.

Frustrated for years by Harper’s smothering information control, the political opposition sensed a genuine opening. Opposition leader Thomas Mulcair urged the government to disclose all
documents about the transaction: “Be clear, be forthright, stop hiding out in the Andes, get back up here, tell people what actually happened.”

With Harper out of the country, Foreign Affairs Minister John Baird was left to answer questions. He officially launched the government into the cover-up phase of the Wright/Duffy scandal. Baird repeated that the prime minister knew nothing about the deal until after it was reported on television. However, he made an important addition to the narrative, claiming that there was no paper trail connected to the story. “Our understanding is there is no document,” he said, without elaborating on what that understanding was based on.

Baird said that the matter of Wright’s payment had been referred to a pair of “independent authorities,” but refused to state who they were. In fact, he was referring to federal ethics commissioner Mary Dawson, and the Senate’s own Internal Economy Committee, the very committee that had whitewashed the original Senate report on Mike Duffy’s expenses. The Harper government’s self-proclaimed tough new accountability rules for public office holders were looking pretty flimsy. A finding by the ethics commissioner carried no sanction, and the Senate was too hopelessly enmeshed in the scandal to judge any other participants. Liberal Senate leader James Cowan explained why the payment needed to be thoroughly investigated: “If money was paid that would influence a decision of a Senate committee, then that is contempt of Parliament.” Stephen Harper was the only prime minister in the Commonwealth for whom that was familiar territory.

Just as the prime minister’s comments about Nigel Wright began to change, the Conservative Party’s characterization of Mike Duffy also evolved. Five days after Duffy was praised for his “leadership” in the Senate expenses scandal by government house leader Peter Van Loan, the PMO issued a statement saying
that taxpayers should not be on the hook for improper housing expenses. It was as if they sensed that more bad news was on the way. They were right. On May 21, 2013, veteran investigative reporter Tim Naumetz reported in the
Hill Times
that Senator Duffy was part of a series of 2011 campaign stops by high-profile party members to boost the electability of local candidates. The tour was organized by the Conservative Party’s national campaign headquarters. One of the reporter’s sources was a Nova Scotia MP who had shared the bill with others for Duffy’s expenses.

The next day the
Toronto Star
advanced the story. The newspaper reported that not only was Duffy billing Conservative campaigns in Nova Scotia during the 2011 election, he was also receiving his Senate allowance as if he were in Ottawa. All told, Senator Duffy helped out in seven ridings during the trip, including Scott Armstrong’s in Truro and David Morse’s in Kentville, Nova Scotia. The senator had a policy advisor travelling with him on the campaign trip organized by Conservative national party headquarters.

Nigel Wright’s worst fear—that the failure to contain the Duffy expense scandal would lead to “the Chinese water torture of new facts in the public domain that the PM does not want”— was coming to pass. It turned out that Senator Duffy had also campaigned for Sandy Lee in Yellowknife. Unspecified hotel costs in the GTA with Stephen Harper, and flights from Ottawa to Toronto to Yellowknife and back to Ottawa, were charged directly to the Conservative Party. Taxis in Toronto were listed on April 5 and April 7, 2011, as expenses. The Deloitte audit indicated Duffy was outside Ottawa on Senate business on those days.

According to Elections Canada, Duffy billed the campaigns of Joe Oliver, Wladyslaw Lizon, Gin Siow, and John Carmichael for $169.45 each for flights between Ottawa and Toronto, taxis, and a night at the Yorkdale Holiday Inn for an April 27–28 tour. The Deloitte review, meanwhile, said he was outside Ottawa on
Senate business. Duffy’s invoice stipulated that the total cost of $1,355 would be split between eight ridings he visited. Only four candidates named Duffy as a supplier in their Elections Canada returns. All told, Duffy campaigned with seventeen Conservative candidates during the writ period, claiming Senate per diems for some days he was actually campaigning.

Once again, media stories prompted the Senate to take another look at Senator Duffy’s expense claims. The agony continued for the government house leader in the Senate. Marjory LeBreton was caught between an unhappy PMO and the media in hot pursuit. On May 22, 2013, LeBreton gave a lengthy speech during a debate in the Senate on proposed rule changes as part of the government’s response to the audits. She was aggrieved that the Senate was facing this “crisis” because it had voluntarily flung open the door that revealed what was going on inside. Instead of getting credit for being candid, the Senate was being pilloried in “hypedup media stories.” Having blamed the media, LeBreton resorted to the tried-and-true line of a politician at bay. “We are not perfect,” she insisted, “but we have conducted ourselves in an appropriate and honourable way.”

Knowing that the Senate’s Internal Economy Committee was reviewing his expenses again, Senator Duffy broke his silence on the payment he had received from Nigel Wright. Stressing that he had done nothing wrong, he expressed confidence that his fellow senators would conclude, as Deloitte already had, that his actions did not merit criticism. He welcomed a “full and open inquiry,” and said, “I think Canadians have a right to know all the facts and I’m quite prepared, in the right place and time, to give them the whole story.”

Despite the bravado, the walls were beginning to close in on Mike Duffy. On May 28, 2013, the Senate’s full Board of Internal Economy held an extraordinary meeting under the glare of TV
lights. The senators announced that they had completed a reexamination of Senator Duffy’s per-diem expenses and had come to a grave decision. The fact that the Conservatives held a majority in the Senate made what was about to happen next even more spectacular. In light of what Senator Duffy’s peers saw as a pattern of false expense claims, his case was being referred to the RCMP. It was another reversal for LeBreton. Early in the controversy, she had said that the Duffy affair was not a police matter. In a little more than a month, LeBreton would resign as government house leader in the Senate, amid little doubt that the PMO had given her a hearty push.

The RCMP had already been looking into the circumstances of the Deloitte audit. Their additional involvement in the matter of Duffy’s expenses did not go unnoticed in the PMO. Although Stephen Harper had kept the information to himself since the story broke, the PMO announced on May 31, 2013, that the prime minister had in fact discussed expenses with the embattled senator after the February 13, 2013, Conservative caucus.

Code-named Project Amble, the examination of Senator Duffy’s financial affairs began with the RCMP picking up records from Elections Canada without a warrant on June 5 and 13 for twelve Conservatives Duffy had helped during the 2011 election. The list included Gerald Keddy, Greg Kerr, and Joe Oliver, but did not appear to include Julian Fantino. During the same period, the RCMP made a second request for documents from the Senate. The Mounties were trying to determine if Duffy had in fact claimed Senate per diems while campaigning for the Conservative Party in Atlantic Canada, the GTA, and the Northwest Territories, as various newspapers had reported.