Chris Hall: Senator Duffy and the little matter of accountability

A $90,000 'gift' from Stephen Harper's chief of staff to Mike Duffy didn't fix the political problem over the senator's questionable expenses, Chris Hall writes. It just made matters worse and opens the door to questions about prime ministerial accountability.

At what point does a political asset become a governmental liability?

Mike Duffy, the senator from PEI, told Canadians recently that he and his wife repaid the $90,000 or so in questionable expenses. But that now appears not to be the case. (Sean Kilpatrick/Canadian Press)

Clearly a calculation took place inside the office of Prime Minister Stephen Harper yesterday and it was this: At what point does a political asset become a government liability?

In the case of Conservative Senator Mike Duffy, it is now clear what the answer was.   Duffy resigned from the party's caucus Thursday night to sit as an independent, done in by new revelations from CBC News and other media outlets that he was charging Conservative candidates for expenses in the 2011 campaign, on days when he also claimed to be conducting Senate business.

On top of that was Duffy’s statement that he secured a loan to repay more than $90,000 in improper expenses — a statement that runs totally counter to the official line that the prime minister's chief of staff, Nigel Wright, had personally dug into his own pocket for the money.

Added together and Duffy's presence inside the Conservative caucus was no longer tolerable.

But now Wright's political fate also hangs in the balance.

As effective as Conservatives believed Duffy was in raising money for the party and as a political draw, Wright is a far more significant figure in the Harper government.

Lured from a stellar business career at Onex Corporation, one of Bay St.'s biggest private equity firms, Wright's job as chief of staff to the prime minister makes him arguably the second most powerful person in the Harper government.

His job is to ensure the wishes of the prime minister are carried out through the whole of government, and to resolve any problems before they threaten to undermine the PM.

Insiders insist that was the role Wright intended to play when he ordered Duffy to repay every cent of the inappropriate expenses two months ago.

When Duffy protested he didn't have the money, Wright stepped in, they say. Without telling the prime minister, he dashed off a personal cheque to get both Duffy off the hook, and a damaging issue off the national agenda.

Rather than fixing the problem, however, Wright made it worse. Far worse.

When news of this secret deal became known this week, the issue was no longer about a handful of senators who claimed inappropriate expenses.

It went right to the heart of the prime minister's office and is threatening to undermine such key Conservative virtues as respect for taxpayers' money, transparency and political accountability. (Not to mention reforming the Senate.)

Questionable expenses

Consider the following.

Duffy told Canadians that he and his wife paid the money back, a claim the most senior non-elected person in the prime minister's office allowed him to make knowing it wasn't true.

In addition, senior cabinet ministers, including Government House Leader Peter Van Loan, perpetuated the myth.

"The fact is that Senator Duffy did the right thing and actually repaid inappropriate sums months ago," Van Loan told the Commons just last week.

Wright's decision to hand over a certified cheque for $90,000 — which the government calls a non-repayable ''gift'' to Duffy — has now sparked an investigation by the Commons ethics commissioner.

New Democrats are also demanding that the Senate ethics officer investigate whether Duffy broke any rules by accepting Wright's largesse.

But the matter doesn't end there.

Just days after Wright took care of Duffy's expenses, the senator informed auditors hired by the Senate to look into questionable expenses that he didn't need to co-operate with their review because he had already repaid the money.

To the opposition, the payment was nothing short of an attempt to thwart the auditors' investigation.

Why, Nigel?

The question is why did Wright do it? Why was it so important to protect Duffy that the prime minister's highly-respected chief of staff went to such lengths to deal with it, and even hid it from Stephen Harper.

For the Conservatives, the damage here is mounting.

The man from Onex, Nigel Wright is the PM's chief of staff and an experienced Ottawa hand. But did he check the conflict rules when he made his gift to Senator Duffy? (Canadian Press)

The senator has never fully apologized for claiming any of these questionable expenses. He's never accepted responsibility.

Instead, he blamed confusing rules about Senate housing allowances, which almost every other senator seems to understand. He blamed a staffer for claiming per diems while he was on vacation in Florida.

And he let someone else repay the money, while continuing to insist he did.

Nigel Wright's conduct is even harder to understand.

Without exception, his friends and colleagues describe him as scrupulous, brilliant and prudent.

Yet, Wright dug into his own pocket for more than $90,000 to make a political headache go away, only to give the government a migraine.

It's not clear at this point whether he, or anyone else in the prime minister's office, checked to see if this $90,000 gift violated the rules of the Commons or the Senate.

Nor has Wright said why he remained silent when Duffy went on television and claimed that he and his wife had decided to repay the money.

And then there's the most puzzling question of all. Why did the prime minister, who after all put Duffy in the Senate, not fire him in the first instance when Duffy was apparently balking at repaying the amounts in question.

Harper's spokesman, Andrew Macdougall, says the prime minister still has full confidence in Wright, but refused to answer if the chief of staff had offered to resign.

The key issue here is ministerial accountability. If the prime minister’s chief of staff didn’t tell Harper he was acting as a political fixer on Duffy's behalf, then where is the accountability?

So the problems drag on, with more investigations and more media coverage. The RCMP is also looking into the expense claims.

Duffy is out of the Conservative caucus. Wright continues as Harper's chief of staff.

And the prime minister continues his calculations into whether his most trusted advisor is also more of a liability than an asset to his government.

The longer he takes, the more problematic a wrong answer becomes.