An unexpected outburst of legal wrangling over admissible evidence has forced Ontario Superior Court Justice Charles Vaillancourt to put the trial of suspended Senator Mike Duffy on hold until next week.

At issue: whether Duffy's defence lawyer, Donald Bayne, should be permitted to question witnesses on a 2010 report from the Senate internal economy committee on the findings of an independent audit into senators' office and travel expenditures,

The document at the centre of the dispute is the Annual Report on Internal Audits 2009-2010, which was tabled Dec. 15, 2010.

That report included the findings of three audits that had been carried out over the previous year by independent auditing firm Ernst and Young — including one that dealt specifically with senators' office expenditures.

In its report to the committee, the auditors noted the Senate "should provide clearer guidance and criteria on which activities constitute a parliamentary function."

No 'clear guidance'

"For example, there is no clear guidance made between partisan activities relating to Senate business (allowable expenses) and partisan activities on behalf of political parties which may not be eligible," it notes.

"This issue affects Finance staff responsible for processing claims as well as the level of understanding of the rules by Senators' offices and can lead to inconsistent interpretation and processing of reimbursements."

The audit also recommended:

  • Revising the Senate's Living Expenses Policy to "reflect requirements for senators to provide supporting documentation for private accommodation expenses."
  • Providing "clearer guidance" on the use of the office research budget, including "criteria on what constitutes a consulting service and a personnel service."
  • Ensuring policy changes related to Senate travel, as well as new rules on the use of the travel card, be properly and formally communicated to "all relevant stakeholders," including senators and administration.
  • Keeping better records of hospitality expenses, including documenting "the details of each hospitality occasion."

Finally, it called on the Senate to "give consideration for a second-level approval" for senatorial expense claims — which, it notes, is "normal practice within private and public sector organizations."

'Second-level' approval rejected

That particular recommendation was roundly rejected by the Senate committee.

"It was felt that the Senate's rigorous expense claim review process was adequate and that there are effective mechanisms in place to mitigate the typical risks associated with expense claims," the report concludes.

As for the other recommendations, the committee noted "an action plan" had been developed, including a new public disclosure system for all travel, office and hospitality expenses to come into force in January, 2011, new rules for the "timely submission" of travel expense claims and a revised policy on National Capital Region living expenses.

"The Internal Economy Committee is confident that, once all initiatives have been completed, the audit recommendations will have been adequately addressed," the response concludes.

Report could bolster defence case

Given how much emphasis Duffy's defence team has put on its assertion that the Senate's rules were confusing and unclear, it's not hard to see why they would want to see this report added to the body of evidence on which the judge will ultimately base his ruling.

Not only does it bolster their case by repeatedly acknowledging the need for "clear guidance" in several of the areas from whence the charges against Duffy originate — particularly travel claims related to partisan activities and living expenses — it also demonstrates the committee itself was aware that even policies that were in place weren't always communicated to senators, Senate administrators and other "stakeholders."

The Crown, meanwhile, has already signaled it will challenge the report's admissibility on the basis that, despite being a published report by a parliamentary committee, it should still be viewed as hearsay, and as such, not appropriate to put before witnesses during questioning.

The judge has indicated that, while he's prepared to hear arguments next Monday, he likely won't deliver a ruling on the matter until June, when the trial is scheduled to resume following a three-week hiatus set to begin May 9.

Senate Internal Economy Committee - Annual Report on Internal Audits 2009-2010

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