OTTAWA – An Ottawa businessman’s $55,000 loan to Sen. Mac Harb is raising fresh questions in the Senate ethics scandal.
The Mounties are already looking into Harb’s questionable housing claims, but new information has emerged that could land the beleaguered senator — formerly a member of the Liberal caucus — in more hot water.
Brian Karam, an Ottawa lawyer who has for years done business with the federal government, was behind the loan, documents obtained by The Canadian Press indicate.
The Criminal Code states that government officials cannot accept an “advantage or benefit” of money from someone who deals with the federal government without first getting written permission.
That part of the Criminal Code is one of the reasons why the RCMP is investigating Harb’s Senate colleague Mike Duffy, who accepted $90,000 from Prime Minister Stephen Harper’s former chief of staff, Nigel Wright, to cover his own improper housing claims.
The Senate refuses to say if Harb sought or was granted permission before accepting the loan; neither he nor Karam have responded to requests for comment.
“This is private information,” said a terse email from Senate spokeswoman Annie Joannette. She directed questions to Harb’s office, but those queries have gone unanswered.
The RCMP was also keeping tight-lipped. “We’re not in a position to comment on the matter,” spokeswoman Cpl. Lucy Shorey wrote in an email Wednesday.
Property records show Harb accepted a $55,000 loan from a numbered company on May 17. The senator filed an updated disclosure statement to the Senate ethics officer on June 12 indicating he owed an unspecified amount of money to that numbered company, 1202864 Ontario Ltd.
Ontario corporate documents show Karam is the sole owner of the numbered company.
Similar documents also show Karam is the president and a director of another numbered company, 595799 Ontario Ltd. That company operates as The Business Inn, a hotel in downtown Ottawa that caters to long-term stays.
Public records show the federal government has awarded The Business Inn more than $9 million in contracts since 2009. The most recent contract, worth $1.87 million, runs until the end of this year.
Karam has yet to return a message left with his receptionist on Friday afternoon, nor has he responded to questions faxed to his office. Harb also has yet to return a call to his Senate office.
Update: Mac Harb has since defended his decision to borrow the money. And Karam sent an email to media outlets defending his decision to loan the money: “The terms of such loan to Mac Harb are fully set out in the registered mortgages,” he said in an email. “Such terms involve no benefit or advantage to Mac Harb and are very similar to terms I have provided to others during the past year.” An update on the story is here.
Karam is a prominent member of the Ottawa business community. A licensed lawyer who runs a private practice, he is involved in several business ventures in the city and is also a member of Ottawa’s Elvis Sighting Society.
It is not clear how Karam and Harb know each other. However, a YouTube video posted last October shows Harb on a stage standing close to Karam as he accepts a Diamond Jubilee medal.
New Democrat MP Charlie Angus, his party’s ethics critic, said the loan raises questions that need to be answered.
“The Senate ethics office has to explain whether or not they were aware of this and whether they approved, because when a politician is receiving loans from numbered companies, that raises many, many questions,” Angus said.
“You’re not supposed to get an advantage that someone else wouldn’t have gotten.”