The federal lobbying commissioner has completed a potentially explosive report of her eight-month investigation into the activities of Bruce Carson, a former top adviser to Prime Minister Stephen Harper.
The prime minister asked for the investigation in April, following allegations that Carson, 65, had lobbied ministerial staff at the Department of Aboriginal and Northern Affairs on behalf of his then fiancée, a 24-year-old former escort trying to sell water filters to native reserves.
The opposition Liberals subsequently asked Commissioner Karen Shepherd to also look into Carson's role in securing a $25-million federal government grant to set up a private research foundation that he ended up running.
Carson has never registered as a lobbyist, and legislation passed by the Harper government in 2006 bans ministerial staffers from engaging in lobbying activities on behalf of private companies for five years after leaving public office.
Carson claims he was not trying to influence ministerial staffers at Aboriginal Affairs, and was not being paid for his activities on behalf of his girlfriend.
Either of those assertions could clear him under the lobbying rules.
Shepherd's report on Carson's alleged lobbying activities could be made public shortly.
RCMP, ethics commissioner launch separate probes
A separate conflict-of-interest investigation by federal Ethics Commissioner Mary Dawson was quietly suspended in November pending the outcome of an RCMP probe into Carson’s affairs.
A spokesperson for Dawson said the ethics commissioner's probe of Carson's dealings was virtually complete when it had to be put on hold to prevent any possible conflict with "another investigation."
RCMP Sgt. Marc Menard would say only that the Carson affair is still in the hands of the Mounties' commercial crime unit in Ottawa.
Results of the lobbying commissioner's probe and the other two investigations have the potential to rock the highest echelons of the government, including Harper's office.
Once among Harper's most trusted aides, Carson has a long history of money problems dating back to 1980 when he was jailed and subsequently disbarred as a lawyer for stealing money from his clients.
He was convicted of fraud again almost a decade later.
Despite his background, Carson managed to work as a senior policy adviser in the PM's office until August 2008.
Headed think-tank funded by $15M government grant
That's when he left to head up a newly created Alberta-based think-tank, the Canada School of Energy and Environment, supposedly to help develop new sources of green energy.
Located at the University of Calgary, the school was funded with a special $15-million grant from the Harper government.
Carson was its first head.
Only weeks after his appointment was announced, Carson was seconded back into Harper's service as a senior adviser during the 2008 federal election campaign, and for several months after that, he was back working in the PM's office.
During that time, he appeared to have lobbied high-ranking bureaucrats to help him obtain a $25-million federal grant to establish another new research institute — Carbon Management Canada — which he would also go on to head.
That prompted Harper's then chief of staff, Guy Giorno, to write two letters to the federal ethics commissioner in an apparent attempt to contain any damage from Carson's actions.
Carson returned to his post as head of the Canada School of Energy in February 2009, changing the mandate of the organization from green energy research to public relations strategies aimed at cleaning up the image of the oil sands.
Charged personal expenses to Canada School of Energy
Copies of internal government emails and other documents obtained by CBC News show that over the ensuing two years, Carson was in almost daily contact with high-ranking federal officials on various policy issues and initiatives, mainly connected to the oil sands.
It is not clear whether the federal lobbying commissioner also investigated those activities.
After Carson left the Canada School in disgrace earlier this year, an audit discovered he had charged tens of thousands of dollars of personal expenses to the institute.
As CBC News reported recently, Carson reimbursed the school for all but about $15,000 of those expenses, which the board simply wrote off as uncollectable debts.
Revelations about Carson's coziness with the uppermost echelons of the Harper government — including regular contact with the Prime Minister's Office — erupted in March this year.
The Aboriginal Peoples Television Network obtained documents showing Carson had been talking to ministerial staffers at Aboriginal Affairs about a plan to sell potentially millions of dollars of water filtration systems to native reserves.
The company proposing to supply the water systems had a dodgy reputation, and employed Carson's then fiancée, whose scantily clad internet photo became synonymous with the Carson scandal.
Harper's then spokesman, Dimitri Soudas, quickly announced the entire matter was being referred to the RCMP and the commissioners of ethics and lobbying respectively.
The office of the commissioner of lobbying does not consider its investigation into the allegations against Bruce Carson to be complete. The status of the investigation is "ongoing" until such time as either a report is tabled in Parliament or there is a conviction under the Lobbying Act. No report on the Carson investigation has been released.Jul 30, 2012 12:32 PM ET