Irving Gerstein tried to sway audit into Senate scandal, Mounties allege

OTTAWA – The Conservatives’ self-styled chief bagman contacted a partner at Deloitte allegedly to try to influence an audit into the Senate expense scandal, according to information in new court documents released Wednesday.

The allegations — none of which have been proven in court — raise questions about the independence of the audit into dubious housing claims of former Conservative senators Mike Duffy and Patrick Brazeau and former Liberal senator Mac Harb.

“I’m absolutely baffled that this audit could have gone ahead in any capacity with the kind of interference that appears to have gone on,” New Democrat MP Charlie Angus said in an interview.

The court filing from the RCMP alleges an effort to get Deloitte to drop Duffy from its probe, with the Prime Minister’s Office arguing the matter would become moot once the senator repaid his ineligible expense claims.

In the court filing, the Mounties quote from emails that say the PMO asked Conservative Sen. Irving Gerstein, who chairs the Conservative Fund, to contact Deloitte to try to get Duffy removed from the audit.

RCMP Cpl. Greg Horton quotes a March 1 email from Nigel Wright, then Prime Minister Stephen Harper’s chief of staff, to former PMO lawyer Benjamin Perrin. Duffy’s lawyer had asked Perrin for an update on whether Duffy would be removed from the Deloitte audit, which had been ordered by the Senate.

Wright replied he did not have an update, but said he asked Gerstein to try to influence the outcome of the audit.

“Today I asked Sen. Gerstein to actually work through senior contacts at Deloitte and with Sen. (Marjory) LeBreton,” Wright wrote to Perrin.

“The outcome we are pushing for is for Deloitte to report publicly that IF Kanata (Ont.) were the primary residence then the amount owing would be the $90,000 figure and that since Sen. Duffy has committed to repay this amount then Deloitte’s work in determining the primary residence is no longer needed.”

Deloitte denies its Senate report was in any way influenced by Gerstein or his purported contact at the firm.

“The forensic review of the Senate was being conducted by a team of highly professional and objective forensic accountants,” spokesman Vital Adam said in an email Wednesday.

The firm has policies in place to spot potential conflicts of interest, he added.

“The Senate audit team established an ethical wall to prevent leakage of information,” Adam said.

“In relation to your question, at no time was the ethical wall breached. No information related to the audit was provided to anyone who was not entitled to receive the information.”

The court filing identifies Gerstein’s Deloitte contact as Michael Runia. The RCMP interviewed Runia, who confirmed that he and Gerstein have “regular contact” because Deloitte is involved in auditing the Conservative Fund.

Runia told the RCMP he was not involved in the Senate audit, the court filing says.

“He advised that Sen. Gerstein did call him and asked what would be the result if Sen. Duffy repaid the money,” the document says.

“His response was that he believed the auditors would still report, and note the repayment in their findings.”

Gerstein, the former jewellery magnate who now oversees the party’s fundraising arm, did not respond to a request for comment Wednesday.

According to the court filing, Gerstein told the RCMP he called Runia to ask “if there was anything he could share with him regarding the status of their audit.”

“Mr. Runia advised him that he did not know anything about it, but would inquire,” the document says. “Sen. Gerstein related this to (PMO staffer) Patrick Rogers.”

Court documents allege Gerstein initially agreed to dip into the fund to repay Duffy’s ineligible expenses when they were thought to be $32,000, but later balked when they were revealed to be upwards of $90,000.

The RCMP also quotes a March 8 email from Rogers that mentions Gerstein and his Deloitte contact.

“Sen. Gerstein has just called. He agreed with our understanding of the situation and his Deloitte contact agrees,” Rogers wrote.

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

Such alleged interference is troubling, Angus said.

“It’s like they feel as if someone calls from the Prime Minister’s Office and puts the squeeze on that they’re going to get their way,” he said.

On March 21, Rogers gave Wright an update from Gerstein.

“Any repayments will not change Deloitte’s conclusions because they were asked to opine on residency,” he wrote.

“However, they can’t reach a conclusion on residency because Duffy’s lawyer has not provided them anything.”

The Senate released the Deloitte audit on May 9 along with its own report into housing claims. Deloitte found that while Duffy, Brazeau and Harb live in the Ottawa area, the rules and guidelines for housing claims are unclear, making it difficult to say categorically that anyone broke the rules.




Browse

Irving Gerstein tried to sway audit into Senate scandal, Mounties allege

  1. Is this the same Irving Gerstein who was found guilty in the Conservative’s “In and Out Scheme” involving illegal election expenses? Quelle surprise!

  2. This is SO disgusting…. there should be an immediate enquiry by the board of Deloitte, full disclosure and several resignations.

  3. The PMO-drafted a plan of deception that was clearly TRUSTED by Duffy. After all, why should the government of Canada not be trusted? Harper’s disgusting government needs some kind of exorcism.

  4. The PMO drafted a plan of deception that was clearly TRUSTED by Duffy. After all, why should the government of Canada not be trusted? Harper’s disgusting government needs some kind of exorcism.

  5. One thing that has not been raised yet, to my knowledge , is the conflict of interest Deloite was in when they Auditted three Conservative Senators. As auditors of record for the Conservative Party Fund, they put themselves in a position where they could be pressured to change an audit finding or risk losing a lucrative contract with the conservative Party. this conflict is highlighted by the fact that Senator Gerstine approached them, in his role as head of the fund, and asked them to sanitize the report. To thier credit, Deloite appears to have refuse, however the potential for conflict remains and needs to be addressed.

Sign in to comment.