Canadian Senate expenses scandal

The Canadian Senate expenses scandal is an ongoing political scandal concerning the expense claims of certain Canadian senators which began in late 2012. Senators Mike Duffy, Mac Harb, Pamela Wallin, and Patrick Brazeau claimed travel and housing expenses from the Senate for which they were not eligible. As a result, the Auditor General of Canada began investigating the expense claims of the entire Senate. Duffy, Wallin, and Harb eventually repaid the ineligible amount. Harb retired a few months into the scandal, and in November 2013, Duffy, Wallin, and Brazeau were suspended from the Senate without pay. The affair attracted much public attention, with as many as 73% of Canadians following it closely.^[1]

Overview

Between November 21 and December 6, 2012, the Senate began investigating Duffy, Harb, and Brazeau's housing expense claims on the basis that they were ineligible to make them.^[2] On February 8, 2013, the Senate hired an auditing firm to investigate the claims.

Two months later, Duffy repaid the more than $90,000 in expenses he claimed.^[3] On May 9, 2013, the Senate released a report into the expenses along with the audit, and concluded that the rules were unclear.^[2] Harb and Brazeau were nonetheless ordered to repay the expenses. As of July 25, 2013, Harb still maintained his innocence;^[4] on July 3, 2013, the Senate announced it would reduce Brazeau's wages to repay the expenses.^[5]

Prior to the release of the Senate's report it emerged that it had been whitewashed by the Conservative-dominated committee to reflect less poorly on Mike Duffy, who was at that time a Conservative.^[6] After two weeks of controversy, and amid concerns that Duffy was claiming travel expenses from both the Senate and the Conservative Party, the Senate reopened Duffy's audit.^[7][8]

On March 22, 2013, Brazeau was expelled from the Conservative caucus over sexual assault allegations.^[9]

In the months following the revelations, many of Canada's political parties reiterated their parties' opinions that the Senate should be reformed or abolished. Prime Minister Stephen Harper sought clarification from the Supreme Court of Canada on the federal government's power to reform or abolish the Senate, and on April 24, 2014 the court ruled that the power to reform or abolish the senate rests with the individual provinces.^[10] Significant reform or abolition requiring a constitutional amendment would require the support of at least seven of ten provinces; however, the provinces' respective premiers do not consider either a high priority.^[11] The Quebec Court of Appeal has re-iterated the role of the provinces in any decision.^[12]

A June 2013 poll revealed that in the wake of the controversy, 49% of Canadians wanted to reform the Senate, 41% wanted to see it abolished, 6% wanted to keep it as it was, and 4% were unsure.^[13]

On May 12, 2013, the Royal Canadian Mounted Police announced they were reviewing the expense claims.^[2]

On August 14, 2013, it was announced that the Auditor General of Canada would be reviewing the expense claims of all Senators.^[14]

Mac Harb

On August 26, 2013, Mac Harb announced his retirement, and that he had paid back the outstanding $180,166.17 to the Senate, having repaid all $231,649.07 in living expenses claimed since 2005. He also dropped all legal action against the Senate. Harb retired with a full parliamentary pension of $122,989 per year.^[15]

Harb will go to court on August 10, 2015^[16] to face one count of breach of trust and one count of fraud.^[17]

Wright–Duffy affair

According to unnamed sources, in February 2013 the Prime Minister's legal advisor, Benjamin Perrin, secretly drafted a letter of understanding between Nigel Wright, the Prime Minister's Chief of Staff, and Duffy.^[18] The sources suggest that the letter stated Wright's intention to transfer $90,172 to cover Duffy's invalid expense claims. Perrin claims that the story is false.^[19] On 30 July 2014, the Law Society of British Columbia announced that it closed its file related to Perrin's alleged role in the affair because the complaint was not valid.^[20] On 25 October 2014, the Law Society of Upper Canada also reported that after fully investigating, it had no concerns whatsoever with Perrin's conduct as a lawyer.^[21]

On May 15, 2013, the Prime Minister's Office confirmed that Wright sent Duffy a personal cheque in that amount; the federal Ethics Commissioner announced that he would review the case.^[22]

The next day, Duffy resigned from the Conservative caucus;^[2] he now sits as an independent senator. On May 19, 2013 allegations surfaced that the Prime Minister's Chief of Staff Nigel Wright was resigning after giving $90,000 to Harper’s senator Duffy to clean up an appearance of illegal or unright debt Senator Duffy was owing for taking too much money for his housing expenses.

Email evidence shows that on May 8, 2013 Senate Leader Marjory LeBreton was in a meeting with Senate Issues Manager Patrick Rogers, Senator Carolyn Stewart-Olsen, and Chris Montgomery (LeBreton’s assistant).

On May 9, 2013 Carolyn Stewart-Olsen put forth a motion to change a senate report on Senator Mike Duffy, deleting the part about residency rules being "very clear" and "unambiguous."

On May 20, 2013 the NDP and their ethics critic MP Charlie Angus called on the RCMP to investigate the matter of bribery appearing in Nigel Wright's payment offer to Senator Mike Duffy.

On May 22, 2013, Harper denied knowledge of the cheque. Harper's legal adviser also denied knowledge of the cheque.^[23]

On June 5, 2013 Harper said in Parliament that: "it was Mr. Wright who made the decision to take his personal funds and give those to Mr. Duffy so that Mr. Duffy could reimburse the taxpayers. Those were his decisions. They were not communicated to me or to members of my office."^[24]

On June 6, 2013, the Royal Canadian Mounted Police (RCMP) filed documents with the courts, contradicting statements by revealing that three senior members of the Prime Minister's Office and another Conservative senator, Irving Gerstein, knew about the transfer.^[25] The documents further revealed that the Conservative Party of Canada initially intended to pay $30,000 for Duffy to repay his expenses before they learned the full amount, that Duffy was being investigated over three separate allegations of fraud, and that the investigation began of the RCMP's own volition in March 2013.^[25]

On June 13, 2013 the RCMP confirmed they were beginning an Official investigation into Nigel Wright. The RCMP did not contact the PMO. On June 24, 2013 the lead investigator Cpl. Greg Horton put to the courts an affidavit reporting a June 19 meeting with Nigel Wright's lawyers. Later one of the lawyers told the RCMP that Wright remembers that he told his executive assistant David van Hemmen, Harper's legal adviser Benjamin Perrin, and PMO Director of Issues Management Chris Woodcock about his intention to give Duffy the money.^[26]

On October 21, 2013, Duffy's lawyer claimed that the Prime Minister's Office "pushed" Duffy into accepting the cheque, contrary to the Prime Minister's statements that no one in his office other than Wright knew of the deal.^[27] The next day, Duffy told the Senate that Harper personally told Duffy to repay the money, quoting him as saying, "It’s not about what you did. It’s about the perception of what you did that’s been created in the media. The rules are inexplicable to our base."^[28][29]

On October 28, 2013, Harper stated in an interview that Wright had been "dismissed," contradicting his previous statements, made in the spring, that Wright had made his own decision to resign.^[30]

On that day of October 28 Duffy announced that the Conservative Party – via their chief lawyer, Arthur Hamilton – paid all of his legal fees relating to the scandal, tabling a cheque stub and corresponding memo as proof.^[31] Duffy also tabled documents supporting the legality of his residency claims.^[32] Furthermore, Duffy tabled an email sent to him from Nigel Wright's account at the Prime Minister's Office, despite the fact that the PMO had previously claimed that none existed in response to an Access to Information Act request.^[33]

On April 15, 2014, the RCMP announced that they had found "no ground for criminal charges" against Wright and dropped their investigation into the matter, returning it to the federal Ethics Commissioner. An anonymous source stated, "It was decided that it was best for him to act as a witness." It was further stated that Harper would not be interviewed by the RCMP in the affair.^[34]

Duffy's trial began on April 7 at the Ontario Court of Justice in Ottawa. He plead not guilty to 31 charges, including fraud, breach of trust and bribery.^[35]

Pamela Wallin

In February 2013, an extraordinary external audit of Pamela Wallin's travel expenses began. From December 1, 2010, through November 30, 2012, Senate records show that Wallin claimed $29,423 in "regular travel" expenses for direct flights from Ottawa to her home province of Saskatchewan or back. Her "other travel" expenses (to other Canadian destinations, including Toronto) were $321,027 over that same 24-month period.^[36] Senator Wallin noted in a Globe and Mail op-ed that a great deal of the "other travel" was actually to and from her home province of Saskatchewan, but didn't count as "regular travel" because the flights did not start or end in Ottawa.^[37]

Although Wallin listed Saskatchewan as her primary residence records show she possessed a valid Ontario Health Card indicating her primary residence was in Toronto where she has a condo.^[38] Wallin was one of several senators who faced questions about whether they lived in the province for which they were appointed.

The Senate was concerned that Wallin's travel expenses are unrelated to Senate business and appointed the external auditor Deloitte to examine refunds she has claimed. Preliminary findings indicated “a pattern of claiming Senate expenses on personal or other business unrelated to the Senate, including boards she sits on.”^[39] Wallin earned approximately $1 million in stock options and fees while on corporate boards since her appointment as senator.^[40]

In May 2013 Wallin resigned from the Senate Conservative caucus pending the results of the external audit of her expense.^[41] A Postmedia News analysis indicated Wallin was ranked second highest in overall spending at $369,593 behind recently retired Conservative Senator Gerry St. Germain, who spent $378,292 during the same period.^[42]

On August 13, 2013, an audit by Deloitte into her expense claims found that Wallin inappropriately claimed overnight stopovers in Toronto on her trips between Ottawa and Saskatchewan and criticized other travel by Wallin for business unrelated to the Senate. The audit also questioned several of Wallin's "networking events" but found that further review by the Senate was necessary to see if these events qualified as Senate business. The audit ordered Wallin to repay $121,348 in improper expense claims and was referred to the RCMP.^[43][44] The same day the audit was released Wallin held a news conference and called the audit "fundamentally flawed and unfair."^[45] On 13 September 2013, it was announced that Wallin had reimbursed the Senate.^[46]

Senator Wallin delivered a speech in the Senate, where she condemned the body for ignoring the rule of law:

"Why is the Senate acting as accuser, judge, jury, and executioner before I have had a day in court? That's exactly why this whole process [is] flawed. If this chamber can take this extreme action with regard to a sitting senator, imagine what it can do to an ordinary citizen who crosses the government of the day. ... The issue is no longer about expenses, or audits, or transparency, or accountability, or even the reputation of this chamber — it's about an abuse of power. ... They were targeted leaks, many of them incorrect, designed to cast my conduct in the worst possible light. They were personal and vindictive, and they violated the rules of this place. ... The government [put] the sentencing before the trial..."^[47]

Suspension of Duffy, Wallin and Brazeau

After 2 weeks of debate, on Tuesday November 5, 2013 the Senate voted to suspend Mike Duffy, Pamela Wallin and Patrick Brazeau without pay and most benefits. The Senators kept their health and dental benefits as well as their life insurance.^[48]

See also

• List of Canadian political scandals
• United Kingdom parliamentary expenses scandal

References