Auditors who probed Mike Duffy’s expenses assured a Senate committee Thursday that safeguards prevented any interference in their work, but Liberal senators said allegations that the Prime Minister’s Office tried to influence the audit raise questions about conflict of interest and the firm’s independence.
Meanwhile, CTV News has learned the Liberals are calling on the RCMP to expand its investigation to include a total of 12 people, including staff members of the PMO.
Three auditors from Deloitte appeared before the Senate’s internal economy committee to answer questions about allegations contained in an RCMP affidavit that a senator with close ties to the PMO contacted the firm to inquire about Duffy’s audit.
An RCMP affidavit filed in court last week contained the allegation that, at the behest of the PMO, Sen. Irving Gerstein called Michael Runia, a partner at Deloitte who was not part of the audit team probing Duffy’s expenses. Gerstein is the chair of the Conservative Fund, and was not involved in the audit process.
The Deloitte audit team’s leader Gary Timm told the committee that he received a call from Runia asking about the sum Duffy would owe, but said he ended the call quickly.
"He wanted to know if Sen. Duffy were to repay (his expenses), how much would it amount to," Timm said of Runia.
"I said I couldn't tell him, I couldn't disclose any confidential information to him -- that was the gist of the conversation."
Timm said he did not know of any similar inquiries into Duffy’s audit, and when he asked other auditors on the team if they had received such calls, they said no. Timm also said that the committee, which hired Deloitte to conduct the audit, was not notified of the call.
Neither Gerstein nor Runia attended Thursday’s committee meeting. Conservative senators on the committee voted against a motion to call Runia to answer questions, which angered Liberal committee members.
“At the end of the day, what it looks like here to us with the way this vote went with the Conservatives voting down our desire to have Mr. Runia come, this just smells like another cover up,” Liberal Sen. Jim Munson told reporters after the meeting adjourned late Thursday morning.
“We don’t like it at all and we’re very disturbed by it and we have to have to put this puzzle together, and the biggest piece of this puzzle is Mr. Runia.”
During question period in the House later Thursday, opposition MPs asked the federal government if it directed Conservative senators to vote against the motion to have Runia speak at committee.
“Why did the PMO order Conservative senators to block the testimony of Michael Runia of Deloitte?” NDP Leader Tom Mulcair asked.
Paul Calandra, parliamentary secretary to the prime minister, did not directly answer the question, saying only that: “Deloitte appeared before the Senate internal economy committee, they took questions and they reaffirmed of course that the forensic audit was conducted with the highest standards and the utmost confidentiality.”
Calandra repeated the same answer to various questions about why Runia was blocked by Conservative senators from appearing. When Deputy Liberal Leader Ralph Goodale asked why Gerstein is still the chair of the Senate’s banking committee, Calandra replied: “As the prime minister stated yesterday and as the RCMP documents that he refers to state, Sen. Gerstein is not under investigation.”
To a question about when the prime minister last spoke to Gerstein, Calandra said he has “no idea.”
Senators left with 'more questions'
After the Senate commitee adjourned Thursday, Liberal senators said standard practice should dictate that if someone outside of the audit process attempts to contact the auditors, they should report it to their client.
“What you have is a very senior audit partner of the firm entertain a call with a senator who’s not involved with the audit, he allowed that call to take place,” Liberal Sen. Paul Massicotte told reporters.
“That partner, irrespective of conflict of interest, did have a call with the partner responsible for the file, and it’s just amazing that somebody who should be aware of the needed independence of this audit, that he would allow that phone call to take place and without even reporting to the client.”
When asked if the alleged attempt at interference called into question the credibility of the final audit report, Massicotte replied: “It raises many questions, of course. We have to ask, ‘What’s the total independence of the auditor, of Deloitte itself?’”
Massicotte said he was left with “more questions than I have answers” after Thursday’s meeting.
Conservative Sen. Hugh Segal, who attended the proceedings but could not vote, told reporters he believes Deloitte is a “professional and independent” firm, and said “I don’t think they would have allowed themselves to be influenced by any phone call from anyone.”
But he did say that Runia should appear before the committee.
"I think the notion of having a formal conversation with him before a committee would have been useful," Segal told reporters.
Deloitte’s national lead of its forensic advisory practice, Peter Dent, defended the integrity of the audit team’s work and its final report.
"We go to great lengths to ensure that such independence is always upheld," Dent told the committee.
"We take this responsibility very seriously and in the case of the work we undertook for the Senate of Canada, this was absolutely the case. Our (Senate) reports ... reflect our objective view of the facts in each case."
Conservative Sen. Gerald Comeau, chair of the committee, said he is satisfied with the auditors’ claims that “there was a firewall, there were means by which any interference with the firm was stopped at the firewall gate.”
When asked if the committee should hear from Runia, Comeau said: “It’s not our role. That is a matter for the police to deal with,” adding that the committee’s job was just to ensure that the contract it had with Deloitte was upheld.
The RCMP documents allege that Nigel Wright, Prime Minister Stephen Harper’s then-chief of staff, asked Gerstein to check with his contacts at Deloitte about Duffy’s audit. The firm also audits the Conservative Fund and does other work for the party.
Wright wanted to knowwhether the Senate would still make a finding on Duffy’s primary residence if Duffy repaid his expenses. Duffy’s residency was at the heart of questions about housing and other expenses he had claimed.
According to the RCMP affidavit, Gerstein confirmed in an interview with investigators that he called Runia.
Gerstein eventually reported back to the PMO that "any repayments will not change Deloitte's conclusions because they were asked to opine on residency,” according to an email sent by Patrick Rogers, the prime minister’s manager of parliamentary affairs.
With files from The Canadian Press
