Staff in the Prime Minister’s Office exerted influence over the Conservative Senate leadership in order to whitewash a Senate report into Mike Duffy’s expenses, according to new RCMP documents that also shed more light on the $90,000 bailout deal.

The documents, released Wednesday, reveal a trail of communications between PMO staffers and senators about how best to handle an external audit of Duffy’s expenses and a subsequent report by the Senate’s internal economy committee.

The emails also show Prime Minister Stephen Harper’s then-chief of staff Nigel Wright’s growing frustration with Duffy over his reluctance to pay back his expenses, and Wright’s ultimate choice to write the senator a personal cheque.

The sworn RCMP affidavit, filed in an Ottawa court, suggests that PMO staff worked with Duffy to make his politically inconvenient expense problems go away, and then ensure a Senate report into his ineligible claims excluded the most damning language.

In the affidavit, RCMP Cpl. Greg Horton wrote there was "considerable communication" within the PMO regarding Duffy's Senate investigation. There was also communication between the PMO and Duffy, Senator Marjory LeBreton, who was then government leader in the upper chamber, and Conservative Senators Carolyn Stewart-Olsen and David Thackuk, who were both on the internal economy committee’s steering group for the audit process.

Horton is seeking all emails sent or received by the four senators dated between Jan. 1 and May 13.

According to the affidavit, PMO staffers, including Wright, were concerned after media reports questioned whether Duffy was actually a resident of Prince Edward Island, the province he represents in the Senate, because he has lived and worked in Ottawa for decades.

As questions about senators’ expense claims grew and outside auditors were called in, the PMO pressured senators to ensure Deloitte would not come to a conclusion about Duffy’s residency.

Wright wrote to Olsen: "Somehow, despite agreement to this in advance from you, Marjory, and David, no one on the Senate side is delivering.”

"Confidentially both Marj and David are telling each other the audit will not be pulled,” Stewart Olsen wrote to Wright. “I think the only way to do this is to tell Deloitte that we are satisfied with the repayment and end the audit.”

Sen. Irving Gerstein, chair of the Conservative Fund, also checked with a contact at Deloitte, according to the affidavit, and reported back to the PMO that the audit firm could not make a firm determination of Duffy’s residency because he had not provided sufficient documentation.

"I would propose that the senator continue not to engage with Deloitte," wrote Rogers. "I believe that we should make arrangements for repayment knowing that Deloitte will not say one way or another on his residency."

According to the affidavit, Duffy was ordered by the PMO and Harper to repay some $90,000 in ineligible expenses. In return, Duffy demanded through his lawyer to be withdrawn from the Deloitte audit process, have the government acknowledge that he meets the requirements to sit as a senator for P.E.I., be reimbursed for legal expenses and have Conservative lawmakers speak favourably of him in the media.

The documents show that Wright approached Gerstein about repaying Duffy's expenses from the Conservative Fund when they believed he owed $32,000.

But that amount climbed to $90,000 when other expenses were added.

“Marjory told me. I am beyond furious. This will all be repaid,” Wright wrote in one email.

Gerstein decided the Conservative Fund would not cover the amount, but agreed to reimburse Duffy for his legal fees.

In the end, Wright agreed to give $90,000 of his own money to cover Duffy’s ineligible expenses. The affidavit revealed that the RCMP believes Wright “broke the law” with his deal to cover Duffy’s expenses.

The affidavit then states that a draft Senate report on Duffy's expenses -- prepared by Tkachuk and Stewart-Olsen, and Liberal Senator George Furey -- still contained some criticism of Duffy's travel patterns and housing claims.

"In particular, the wording stated that Senator Duffy's primary residence was in Ottawa, not P.E.I.," Horton wrote. "The criticism went beyond the agreed media lines."

The documents state that the wording of the report "posed a problem for the PMO," which, in turn, influenced Tkachuk, Stewart-Olsen and LeBreton, "to change the report to reflect wording that the PMO wanted."

The affidavit goes on to say that there was some opposition to changing the report to remove all criticism of Duffy, in particular from Christopher Montgomery, an employee of the Privy Council Office who worked for LeBreton.

"He insisted that the senators were compromising themselves by changing the report to meet the demands by the PMO," the report reads. "Eventually he relented and the changes were made."

Horton, who's leading the RCMP investigation into the Senate expense scandal, said in the documents that after reviewing hundreds of emails and conducting a number of interviews, he believes the controversy was "an embarrassment” for the government.

Tkachuk told CTV’s Power Play later Wednesday that the internal economy committee discussed its report on Duffy’s expenses, but denied that the PMO coached the committee about what to include.

He said the committee’s report into Duffy’s expenses differed from the report into the expenses of Senators Patrick Brazeau and former senator Mac Harb because the committee was under the impression that Duffy had repaid his expenses on his own.

“As far as (the PMO) discussions with me, they were very concerned about this senator’s Senate seat and I could see that, so we had discussions about what would be in the report,” Tkachuk told Power Play.

“But in the end we had to make a decision as to what should be in the report and the conclusion in both reports were exactly the same. There was no differentiation as far as punishment was concerned. It was exactly the same for Duffy as it was for the other two.”

When asked if the PMO and the Senate were conspiring to sweep Duffy’s expense problems under the rug, Tkachuk said: “No. there was never, ever, ever any indication that we should stop the investigation.”

Harb repaid more than $200,000 in expenses and resigned from the upper chamber, while Brazeau missed a repayment deadline for the $48,000 he was ordered to repay and was having his salary garnished until he was suspended, with Duffy and Pamela Wallin, last month.

The RCMP is probing the expenses of Duffy, Wallin, Brazeau and Harb.

Nigel Wright under investigation

Meanwhile, the affidavit also reveals that the RCMP is investigating Wright for his role in the Duffy affair.

In court documents filed Wednesday, the RCMP alleges Wright broke the law by giving the $90,000 cheque to Duffy so he could repay ineligible expenses.

“Nigel Wright … did directly or indirectly corruptly give or offer to a member of Parliament for the benefit of that person, any money, valuable considerations, or office in respect of anything done or omitted, or to be done or mitted by him in his official capacity contrary to section 119 of the Criminal Code,” Horton wrote in the affidavit.

It’s the first time Wright has been accused of a criminal act by the RCMP. None of the allegations have proven in court.

Horton and another RCMP officer interviewed Wright on June 19. At that time, Wright told the investigators he offered to repay Duffy's expenses, "believing it was the proper ethical decision that taxpayers not be out that amount of money."

According to the documents, Wright said he received no direction from anyone else in the Conservative Party on the subject of repaying the funds, and while some people within the PMO were aware of the funds, Harper was not.

In a Feb. 22 email, Wright wrote in an email that “I do want to speak to the PM before everything is considered final.” An hour later, Wright wrote another email saying “We are good to go from the PM.”

In a May 14 email reply to then-PMO spokesperson Andrew MacDougall, Wright says: "The PM knows, in broad terms only, that I personally assisted Duffy when I was getting him to agree to repay the expenses. On the specific matter, I did not co-sign a loan."

In the affidavit, Horton writes “that Mr. Wright believes that Senator Duffy morally and ethically should not have filed the expense claims."

Harper has said he told Duffy to the repay any “inappropriate” expenses, but has repeatedly said he did not know about the $90,000 cheque. He repeated that during question period in the House of Commons Wednesday, saying the “good to go” remark by Wright means “good to go with Mr. Duffy repaying his own expenses, as he has acknowledged I told him personally, as he told everybody he had done, including the Canadian public.”

On Tuesday, Harper told the House of Commons that Wright was under investigation by the RCMP, but said he wasn't aware of the Prime Minister's Office being under investigation.

Wright issued a statement on the matter Wednesday morning via his lawyer.

“My intention was always to secure repayment of funds owed to taxpayers.  I acted within the scope of my duties and remain confident that my actions were lawful.  I have no further comment at this time.”

The documents also contradict the line that Harper and Conservative cabinet ministers repeated after the Wright-Duffy deal came to light that Wright was merely helping a long-time friend.

In an email dated Feb. 20, Duffy tells Wright and PMO staffer Chris Woodcock that his lawyer wants a letter of instruction from Deloitte outlining the scope of their work. “Nigel says his analysis is I am in violation of the housing allowance policy she also wants that analysis.”

Wright responded: “I did not say that, and if you continue to misquote me, then we will be speaking only through lawyers going forward.”

Read the court documents below:


Information to obtain production orders

Information to obtain production orders

2. Appendix A

3.Appendix B

4.Appendix C

Watch/listen: Mike Duffy's speech in the Senate chamber (Monday Oct. 28, 2013)