Liberals try new tack to explore PMO interference in Duffy audit

OTTAWA – Liberal senators are trying a new tactic to get to the bottom of allegations that the Prime Minister’s Office interfered in an independent audit of Mike Duffy’s expenses.

James Cowan, Liberal leader in the Senate, has given notice that he will argue today that the interference constitutes a breach of senators’ privileges.

And he’ll ask Senate Speaker Noel Kinsella to rule on the matter.

If Kinsella determines there was, at face value, a breach of privilege, the matter would be referred to a Senate committee for further study.

That could give Liberals another opportunity to try to call two key witnesses alleged to have been involved in the audit interference: Conservative Sen. Irving Gerstein and Deloitte managing partner Michael Runia.

Two previous Liberal attempts to get Runia to testify at the Senate’s internal economy committee were defeated by the Conservatives, who hold a majority in the upper house.

And Gerstein ruled out of order Wednesday a Liberal attempt to have him step aside as chairman of the Senate banking committee until he’s cleared by the RCMP or agrees to testify at internal economy about his role in the matter.

In a notice today to the Senate clerk, Cowan says he’s been forced to raise a question of privilege on the matter because “all other reasonable avenues of redress have been blocked.”

According to witness statements and emails obtained by the RCMP and filed in court, Prime Minister Stephen Harper’s former chief of staff, Nigel Wright, enlisted Gerstein’s help in concocting a deal in which Duffy would repay $90,000 in questionable living expense claims.

Duffy agreed to the deal on condition that he would be reimbursed the full amount, that a Senate report on his conduct would not be critical of him and that there would be no question about his eligibility to sit as a senator from Prince Edward Island, although he lived primarily in Ottawa.

Gerstein, who heads the Conservative party’s fundraising arm, initially agreed that the party would reimburse Duffy — when the tab was thought to be $32,000 — but balked when it became clear it was more than $90,000. Wright eventually reimbursed Duffy out of his own pocket.

At Wright’s behest, Gerstein also talked to Runia, who audits the Conservative party’s books, to ensure the audit would make no finding as to whether Duffy’s primary residence was in Ottawa or P.E.I.

Gary Timm, lead auditor on the Duffy file, has confirmed Runia called him but maintains he imparted no information about the confidential audit and that its findings were not influenced by anyone.

However, Cowan notes that the RCMP documents show Wright and other top PMO aides knew — one month before the findings were disclosed to the Senate which ordered and paid for the audit — that it would make no finding about Duffy’s primary residence because the senator was refusing to speak to auditors.

Indeed, Cowan argues that PMO interference “began virtually from inception,” even before the internal economy committee announced its decision to order an external audit of expenses claimed by Duffy and two other senators — Patrick Brazeau and Mac Harb.

The RCMP documents say Wright called committee chair David Tkachuk, asking that the wording of the audit announcement “differentiate” Duffy’s case from that of Brazeau and Harb, a request which was accommodated by adding an extra line that the committee was seeking legal advice about Duffy’s residency.