Attention Canadian Senators ..... fraud is theft with a smile!"

Senate scandal: RCMP says it's investigating Nigel Wright, Mike Duffy for corruption offences

The RCMP says it is investigating Senator Mike Duffy and Nigel Wright for corruption offences related to the $90,000 expense repayment deal

Tonda MacCharles, Ottawa Bureau Reporter
Bruce Campion-Smith, Ottawa Bureau

Wednesday, November 20, 2013

The RCMP says it is investigating Senator Mike Duffy and Nigel Wright for corruption offences related to the $90,000 senate expense repayment deal. (Sean Kilpatrick/The Canadian Press)

OTTAWA—The RCMP says it is investigating Senator Mike Duffy and Nigel Wright for corruption offences related to the $90,000 senate expense repayment deal.

In a new affidavit sworn for an Information to Obtain more documents, the RCMP’s lead investigator Corporal. Greg Horton says he has “reasonable grounds to believe” the two have committed bribery, fraud on the government and breach of trust offences, contrary to sections 119, 121 and 122 of the criminal code.

The new allegations, which have not been proven, detail a much more involved role by the PMO than has previously been alleged by the RCMP or acknowledged by Prime Minister Stephen Harper who insists his office is not under investigation.

The affidavit says the offences relate to Duffy’s role as a Canadian senator and Wright’s “former role as Chief of Staff for the Prime Minister of Canada.”

Read more: Stephen Harper puts all blame on Nigel Wright for cheque to Mike Duffy

Many of the people whose names are contained in the affidavit no longer hold direct roles in the PMO or the government’s leadership in the senate.

No formal charges have been laid, and all allegations must be proven in court.

Last night, Wright’s lawyers told The Star that he is cooperating and assisting police in their investigation, but would not comment on the Prime Minister’s assertion in the Commons that Wright was “under investigation.”

The affidavit says media reports that there was a deal between Duffy and Wright that the senate committee investigating senators’ inappropriate expense claims “would go easy” on Duffy “were not entirely accurate, however there was some validity to them.”

Horton says after reviewing hundreds of email exchanges and conducting interviews with many of those involved, “I believe the true circumstances surrounding the repayment of the $90,000 are clearer.”

He says the controversy was an “embarrassment for the government, and that Mr. Wright believed that Senator Duffy morally and ethically should not have filed the expense claims.”

Wright told Duffy to repay — which was reiterated by the Prime Minister, says Horton. “Senator Duffy agreed to repay the money, but it was based on conditions or demands made of the PMO by Senator Duffy, through his then lawyer, Janice Payne,” says Horton.

“Those demands included: withdrawing Senator Duffy from the Deloitte audit process, acknowledging that he met all requirements to sit as a senator for PEI., reimbursement to Senator Duffy including legal fees, and ensuring that members of the Conservative caucus spoke on the matter which was consistent with agreed upon media lines,” wrote Horton.

The RCMP says that when it was initially believed that Duffy owed only $32,000, Senator Irving Gerstein who runs the Conservative Fund of Canada “was considering the idea when it was then realized that the actual amount…owed was $90,000.”

He says Gerstein agreed to pay the legal fees only.

“Nigel Wright decided that he would personally cover the cost of reimbursing Senator Duffy.”

The RCMP’s affidavit backs Duffy’s claim that there was “back and forth negotiations between Janice Payne and Benjamin Perrin (legal counsel within the PMO)” and that eventually the “terms of agreement were set.”

The RCMP describes those terms this way: Duffy got a mortgage loan of $91,600 from the RBC, then deposited $80,000 to his RBC line of credit. Nigel Wright sent a $90,000 bank draft to Janice Payne’s office, payable to her law firm, and her office then forwarded a personal cheque of Senator Duffy’s to the Senate to reimburse the $90,000.

The same day, a bank to bank transfer was made, depositing the $90,000 back into Senator Duffy’s RBC account.

Horton says Duffy has offered different versions of whether he knew or did not know that Wright was the source of the money.

He says that the senate steering committee reviewing Duffy’s expenses at first did not reflect the agreement Duffy had with PMO.

“This posed a problem for the PMO who in turn influenced Senators (David) Tkachuk, (Carolyn) Stewart-Olsen, and (Marjory) LeBreton to change the report to reflect wording that the PMO wanted,” he said.

“That wording removed all criticism of Senator Duffy. There was opposition to those changes, in particular from Christopher Montgomery, an employee of the Privy Council Office who worked for Senator LeBreton on issues management for the government in the Senate.”

Horton says Montgomery insisted the senators were “compromising themselves by changing the report to meet the demands by the PMO. Eventually he relented and the changes were made.”

Horton is seeking more bank documents to document the bank transfers he alleges occurred.

He also says Nigel Wright and the PMO “have separately provided the RCMP with emails relevant to this investigation.”

“Those emails demonstrate that there was considerable communication within the PMO on the matter of the senate investigation of Senator Duffy, as well as communication between PMO staff and senators relating to the matter.”

He is seeking more email communications on Senate computer servers to document the email exchanges described between the PMO, PCO with LeBreton, Stewart-Olsen, Tckachuk and Duffy.