Conservatives block key witness on alleged interference in Duffy audit -

Conservatives block key witness on alleged interference in Duffy audit

Auditors in expense scandal grilled by senators


OTTAWA – Conservative senators blocked a bid Thursday to have a key figure from the audit firm Deloitte testify about alleged interference into the review of Sen. Mike Duffy’s expenses.

The move came as the Senate’s internal economy committee heard from three other Deloitte partners about the audit they had done into Duffy’s living claims between February and May.

Deloitte’s Gary Timm confirmed what had been revealed in a police report last week — that Michael Runia, one of the firm’s managing partners, called him to inquire about the Duffy audit. Runia was not a member of the audit team.

An RCMP court filing last week revealed that Runia made the call at the request of Conservative Sen. Irving Gerstein, who in turn had been prompted by the Prime Minister’s Office.

“As I indicated before, 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 that he notified others at the firm about the call, but no report was made back to the Senate committee — Deloitte’s client — about the matter.

When Liberal Sen. George Furey later moved to have Runia appear to answer questions, Sen. Gerald Comeau, the Conservative chairman of the committee, ruled against him, saying it’s not the committee’s job to conduct police-style investigations.

A subsequent vote, which included Comeau’s Conservative colleagues, upheld the ruling, much to Furey’s disappointment.

“Mr Runia is a very intricate part of that, now that we know from Mr. Timm (that) the person we hired to do our forensic investigation was contacted by somebody else who had no business contacting him,” Furey said afterward.

“Now we’re told by our Conservative friends that we cannot ask that person to come before the committee and explain his involvement.”

Conservative Sen. Hugh Segal, who attended the committee but did not have a vote, said he too would have liked to hear from Runia.

“I think the notion of having a formal conversation with him before a committee would have been useful,” Segal said.

The RCMP files raised many questions about potential interference by the Prime Minister’s Office into the audit.

Gerstein, who did not sit on the internal economy committee studying the expense issue, was asked by Nigel Wright, Harper’s chief of staff at the time, to approach a contact at Deloitte about the audit.

Deloitte also happened to be the firm that managed the books for the Conservative Fund Canada; Gerstein was the party’s fundraising chief.

The objective was to ensure that Duffy’s repayment of $90,000 in contested expenses stopped the audit short of concluding which of the senator’s homes — Ottawa or P.E.I., the region he represents — was his primary residence.

That was part of an alleged agreement between Duffy and the Prime Minister’s Office to see Duffy’s expenses repaid by a third party — initially the Conservative Fund, but in the end, Wright himself.

Gerstein told police he did speak to Runia, his Deloitte contact. Harper’s manager of parliamentary affairs Patrick Rogers described that first contact in an email on March 8.

“The stage we’re at now is waiting for the senator’s contact to get the actual Deloitte auditor on the file to agree,” Rogers wrote. “The senator will call back once we have Deloitte locked in.”

Two weeks later, Gerstein went back to the PMO with the news that “any repayments will not change Deloitte’s conclusions because they were asked to opine on residency,” according to another Rogers email.

Peter Dent, the national leader of Deloitte’s forensic advisory practice, defended the integrity of the audit during Thursday’s hearing.

“We go to great lengths to ensure that such independence is always upheld,” Dent said.

“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.”

The Deloitte partners said they did not meet with any senators outside of meetings with the sub-committees overseeing the forensic investigations.

Timm, however, was reminded that Sen. David Tkachuk has acknowledged that he did meet with them on one occasion on his own.


Conservatives block key witness on alleged interference in Duffy audit

  1. “I think the notion of having a formal conversation with him before a committee would have been useful,” Segal said… That’s why it didn’t happen.

  2. What would Runia have said? Obviously he would have agreed to previous statements.
    Is this a “witch hunt”?

    • He could have shed light on the conversation he had with Gerstein. What exactly was said in that conversation, and how much pressure did Gerstein attempt to bring to bear?

  3. Longtime macleans readers will remember Toronto CPC Sam Goldstein missing an appointment at a hearing regarding the in-and-out funding misappropriation, showing up the next day and running around demanding to be heard, then later showing up on the Macleans comments boards, taking a few questions and then disappearing for good.

    • Ah, yes, the Golden Years of MacLean’s blogs!

  4. I’m not too sure this is quite as big a deal as other more nefarious actions.
    Gerstein contacted Deloitte to see if a repayment would stop the audit, his contact was told no and to go away. There appears to have been no effect on the audit, which went on as before.

    Certainly Runia and Gerstein might have been plotting all kinds of things but the actual auditors weren’t swayed or if they were then they lied today when they said that. Pulling Runia before a Senate committee wouldn’t establish any of this though.

    It is interesting that Runia has so many CPoC links including party finances auditor and the his firm gets some no-bid contracts from the government, but with such huge accounting companies I guess that that is inevitable. Maybe we need to break up these pseudo-monopolies just so there can be some separation between party people and those who keep them honest.

    What needs investigating is how the PMO eventually got the confidential information prior to it being publicised officially. Who leaked that?

  5. Gee they sure do not want to start asking questions of Gerstein, he knows where all the skeletons are buried. But what gives him a pass, he attempted to gain information from the accountants, is that not interference even though got nothing.