Senators to grill auditors on Duffy expense study

How independent was that Deloitte audit?

Adrian Wyld/CP

OTTAWA – When the independent audit into Sen. Mike Duffy’s contested expenses came out in May, there were plenty of questions and precious few answers.

Today, senators hope to even the score a little.

Three auditors from Deloitte, the firm that crafted the report, face a grilling from members the Senate’s Board of Internal Economy committee who want to know just how independent the audit really was.

An explosive RCMP affidavit filed in court last week featured emails between the prime minister’s staff about discussions that took place with a Deloitte executive while the audit was unfolding. The audit — which cost $137,784 taxpayer dollars and studied Duffy, Sen. Patrick Brazeau and Sen. Mac Harb — examined whether the three were properly claiming expenses for their secondary residences.

“Due to our code of conduct with respect to client confidentiality, we cannot discuss any information about our clients, or the work we do for them,” spokesman Vital Adam said at the time.

Today’s meeting, normally closed to scrutiny, will be open to the public, Conservatives and Liberals alike said Wednesday.

“We will be questioning the representatives from Deloitte to make sure that the integrity of the independent audits was never compromised,” said Marc Roy, spokesman for Liberal Senate leader James Cowan.

In Duffy’s case, questions had been raised in the media about whether he was improperly claiming living expenses for his home in Ottawa, where he spent most of his time.

Sen. Irving Gerstein, who did not sit on the internal economy committee studying the expense issue, was asked by Harper’s chief of staff Nigel Wright 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, and 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 his Deloitte contact, Michael Runia. 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,” said Rogers. “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 Rogers in an email.

Rogers appeared to have quite a bit of information about the audit, even though it would be another month before the auditors delivered an interim report to the steering group of the internal economy committee.

“…They can’t reach a conclusion on residency because Duffy’s lawyer has not provided them with anything,” Rogers continued.

“This is despite their attempts to use ‘public information’ about Duffy’s residency. Their report will state that Duffy’s lawyer did not provide information when requested.”

The committee’s chairman at the time, David Tkachuk, later told police that the only communication he had with Deloitte was about budgeting and schedules.

Deloitte denied the Senate report was in any way influenced by Gerstein. Spokesman Vital Adam said last week that the team had an “ethical wall” in place to prevent leaks of information.

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