OTTAWA -- The RCMP has formally laid out its criminal case against Sen. Mike Duffy, saying he is being investigated for allegations of breach of trust and fraud against the government, court documents obtained by CTV News show.
The documents reveal for the first time details surrounding the $90,000 cheque written to Duffy by Nigel Wright, Prime Minister Stephen Harper’s then-chief of staff -- including revelations that the Conservative Party was initially going to reimburse Duffy so he could pay off the Senate for improper living expense claims.
In affidavits filed last week in the Ontario Court of Justice in Ottawa, lead investigator RCMP Cpl. Greg Horton alleges that Duffy broke the law by accepting “an advantage or benefit of money ($90,124.27) from Nigel Wright.”
The criminal code states that government officials and employees are prohibited from accepting money from anybody who has “dealings with the Government of Canada,” without the written approval from the head of the branch of government that employs them.
Court documents show that Wright’s lawyers -- Peter Mantas and Patrick McCann -- met with two RCMP officers on June 19 to discuss the circumstances around the $90,000 cheque.
They told the Mounties that the Conservative party initially planned to secretly repay Duffy’s improper living expense claims.
“The Conservative Party was initially going to repay the money for Duffy from a Conservative fund, when it was believed that the amount he owed was approximately $32,000,” the documents read.
Conservative Sen. Irving Gerstein, who controls the party fund, refused to pay when the amount owed was nearly three times higher. “It was too much money to ask the Conservative Party to cover,” the lawyers told the RCMP.
Wright then offered to cover the cost for Duffy, the RCMP said, but under two conditions: “pay back the money right away” and “stop talking to the media about it.”
Wright covered the cost, “believing it was the proper ethical decision that taxpayers not be out that amount of money,” the RCMP wrote, based on the interview with Wright’s lawyers. “Wright’s role was to manage the Conservative Party, part of which was to deal with matters that could cause embarrassment.”
The document said that Wright “did not expect the money to be reimbursed” by Duffy, adding there was no written contract between them.
The documents allege that Wright recalls three staff members within the Prime Minister’s Office were aware of this arrangement, including Harper’s former special adviser and legal counsel Benjamin Perrin.
When CTV first reported Perrin’s involvement in May, Perrin denied the story stating that “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.”
The documents allege that David van Hemmen, executive assistant to Harper’s chief of staff, and Chris Woodcock, director of issues management in the Prime Minister’s Office, also knew about the deal. Wright’s lawyer said the prime minister was not aware of the arrangement.
The RCMP said that “a decision on whether to interview Wright as a suspect or witness had not been made.” As of June 24 -- when the court documents were filed -- the RCMP had not yet interviewed Wright.
Senate report ‘less critical’ of Duffy
The RCMP noted that two months after Wright gave Duffy the money, a Tory-dominated Senate committee sanitized the original report of Duffy’s expenses to remove key findings that would have cast the P.E.I. senator in a more negative light.
“The final Senate report … relating to Duffy’s expenses was less critical than the original draft report, which is consistent with the purported deal between Duffy and Wright,” Horton wrote in the court document.
“I believe there was an agreement between Duffy and Wright involving repayment of the $90,000 and a Senate Report that would not be critical of him, constituting an offence of Frauds on the Government,” he alleges.
The original report on Duffy’s expenses, initially obtained by CTV News, clearly shows the internal economy committee removed damning paragraphs.
That version of Duffy’s audit found that the senator broke the Senate’s “very clear” and “unambiguous” residency rules. The report found that Duffy stayed in his Prince Edward Island cottage mostly during the summer months. He had listed it as his primary residence, which allowed him to claim an annual housing allowance given to senators who live more than 100 kilometres from Ottawa.
The RCMP wants to interview Tory Sen. David Tkachuk -- who ordered criticisms of Duffy be removed from the Senate report -- but has since postponed due to health reasons.
“Senator Tkachuk was in contact with Duffy during the audit process, which I believe is important, as Tkachuk is also in contact with Nigel Wright during the process,” Horton alleged. “It was Nigel Wright who essentially paid back the $90,000, and it was Tkachuk who headed the sub-committee which authored the Senate Report . . . on Duffy, which is amended from its draft version to be less critical of Duffy.”
The details were contained in production order, or a court order to turn over information, seeking records and billing statements from the Senate related to Duffy’s expense claims. The documents were initially sealed by an Ontario Court of Justice order, but CTV and The Globe and Mail made an application to the court to have them made public in order to report on the contents.
‘Fraudulent expenses claims’
Duffy is also being investigated for two counts of alleged breach of trust involving housing expenses and per diem claims, according to court records.
“Senator Duffy has demonstrated a pattern of filing fraudulent expense claims,” the RCMP alleges.
“He maintains that his primary residence is in P.E.I. so that he can collect housing and travel allowances from the Senate, however uses his Ottawa residence as his primary residence when convenient, such as when dealing with OHIP (Ontario Health Insurance Plan) so that he can obtain medical coverage in Ontario,” the lead investigator wrote as an example.
The RCMP have already obtained and examined Elections Canada records, and determined that Duffy had claimed Senate per diems on days he was actually campaigning for Conservative Party candidates.
Court document also show that the RCMP investigation now dates back to Dec. 22, 2008, when Duffy was first appointed in the Senate. (The Senate’s internal investigation only dated back 18 months to April 1, 2011).
The Mounties have requested all of Duffy’s cellphone and corporate credit card records from the Senate since December 2008 “so that the RCMP can conduct its own forensic audit” and “to substantiate that Senator Duffy submitted claims for expenses that he was not entitled to.”
It added: “The circumstances of these (fraudulent per diem expense) claims vary. Some occur while Duffy is in Florida, others while he is in P.E.I., and yet others while he is campaigning in the 2011 Federal election.
“I believe it is likely that this pattern goes beyond the 18-month period that has been examined by Deloitte and the Senate Finances.”
