Ex-PMO aide Carson left Calgary school with debt

CBC News has learned that a former senior adviser to Stephen Harper charged almost $28,000 in personal expenses to a federally funded think-tank he headed.

Taxpayer funded think-tank suspends most programs in wake of revelations

CBC News has learned that Prime Minister Stephen Harper's former senior adviser, Bruce Carson, charged thousands of dollars in personal expenses to the federally funded think-tank he headed for just over two years.

Robert Turner, a prominent Edmonton lawyer and chairman of the Canada School of Energy and Environment's board of directors, says that in one month alone Carson charged almost $28,000 in personal expenses to the school's corporate credit card, which is supposed to be used only for business.

In an exclusive interview with CBC News, Turner said the board has simply written off about $15,000 of taxpayers' money that Carson spent on personal travel and other expenses during his last month on the job.

The school —  a think-tank set up at the University of Calgary with a $15-million federal grant — withheld another $13,000 it owed Carson when he left under a cloud of controversy in March.

Turner is the first prominent insider to reveal what went on behind the scenes when the Carson scandal engulfed Stephen Harper's government on the eve of this year's federal election.

Carson is already under investigation for possible influence-peddling and illegal lobbying last year in a failed attempt to land federal contracts for a shady company employing his then girlfriend, a former escort.

Once among Harper's most trusted advisers, Carson has a long history of personal money problems, including fraud convictions and personal bankruptcy.

Bruce Carson left the Prime Minister's Office to head the Calgary-based Canada School of Energy and Environment. (CBC)

He left the Prime Minister's Office in 2008 to head up the publicly funded Canada School of Energy and Environment.

Carson left the school in disgrace after the lobbying scandal broke in March.

He could not be reached for comment.

Debt 'uncollectable'

Turner said the board of directors weighed the legal costs of going after Carson for all the personal expenses he had charged to the school — and the odds of his being able to repay the money — and decided that pursuing him would be "throwing good money after bad."

"We felt that it was a fair debt owing to the Canada School … but we were satisfied it was uncollectable."

Turner said officials at Industry Canada — the federal department ultimately responsible for ensuring the $15 million of taxpayers' money given to the school isn't wasted — were told about the $15,000 being written off and why.

"We were confident with the decision," Turner said, and Industry Canada officials "haven't told us anything to the contrary."

Turner said the Calgary school's high-powered board, which includes another prominent Alberta lawyer and the presidents of three universities, took the Carson affair "very seriously."

"In the overall scheme of things, it is not a large amount [of money], but we all feel that when you're dealing with public funds, every single dollar counts," Turner said.

"We acted immediately [to safeguard the public money], but of course, it is very disappointing when the chief executive breaches the trust."

School suspends most programs

The school has hired former Canadian oil industry executive Robert Skinner as its new interim director with an urgent mandate to figure out what Carson was up to during his time there.

Until that happens, Turner said the school that was supposed to be a world leader in clean energy research has suspended all its programs except already funded academic research projects.

"We are honouring our commitments … but we are putting on hold all new programs as we look into what it is the school can do best with the resources it has available," Turner said.

Turner said a recent audit of the school under Carson's watch was able to account for the roughly $1.8 million in operating costs last year: "We know where all the money was spent."

Carson left the Calgary think-tank earlier this year after allegations surfaced he had illegally lobbied the federal government to buy water purification systems from a controversial company employing his girlfriend, Michele McPherson.

She is a 23-year-old former escort. Carson is 65.

Lobbying allegations investigated

Carson has never registered as a lobbyist, and the Harper government has imposed strict rules on what senior federal officials can — and cannot — do after they leave government.

So far, the lobbying allegations against Carson have spawned investigations by at least three federal agencies — the RCMP and the commissioners of lobbying and ethics.

A spokesperson for ethics commissioner Mary Dawson said a probe into Carson's activities by that office is "virtually complete," and a final report could come as early as the end of this month.

While no one is saying exactly what personal expenses got Carson into hot water, one source says a lot of the charges to the credit card were for travel.

Documents show Carson owned homes in Ontario with various girlfriends most of the time he was working at the Calgary-based institute.

Carson's history of money problems dates back more than 30 years.

A lawyer until the early 1980s, he was convicted of defrauding clients, disbarred and sent to jail. He was convicted again in 1990, that time for defrauding a rental car company, and given a suspended sentence.

He declared personal bankruptcy in the early 1990s, and was in serious trouble with creditors almost continuously over most of the past three decades.

It remains a mystery how someone with that kind of track record could make it through all the security screening ordinarily required to become one of the prime minister's closest advisers.

(The prime minister maintains he was only aware of Carson's problems with the law in the early 1980s, and never would have hired anyone with so many ongoing issues.)

However it happened, a close relationship with Harper became a powerful calling card for Carson after he left government.

School sponsored energy exhibits

The Canada School of Energy and Environment was supposed to bring together the best and brightest from the public and private sectors to create new clean energy technologies and strategies.

Instead, Carson effectively turned the school into a one-man advocacy centre to promote the Canadian oil industry in general, and the oilsands in particular, a role he had played through most of his time in the Prime Minister's Office.

Documents obtained by CBC News, for instance, show Carson used the Calgary school to spearhead the creation of a six-year, multi-million-dollar series of energy exhibits in three of Canada's national museums.

Environmental advocates have condemned the exhibits as a public relations road show for the oil sands.

The school's chairman concedes, "Bruce [Carson] did become a bit of a one-man show."

With Carson gone, Turner says the board, which oversees more than $10 million of taxpayers' money still in the bank, has suspended the school's involvement with the museum projects.

"We don't fully understand some of the things the school was involved in, so we simply said that we're not spending any more money, and we're not actively pursuing the things we might have been pursing before, other than the scientists who have pre-approved grants."

If the board members are not sure what Carson got them into, they are equally uncertain about the school's future.

Says Turner: "I cannot say the board as a whole is completely satisfied that it knows where to go and how to get there."

One of Carson's more notable achievements as head of the school has since become one of his most controversial moves.

In 2009, Carson successfully hit up the federal and Alberta governments for $50 million for a second institute called Carbon Management Canada — which he initially also headed — to fund mainly new technologies to reduce the environmental impact of the oilsands.

The problem was Carson appeared to be soliciting the funds while he was sitting in the Prime Minister's Office, a move that caused his own chief of staff, Guy Giorno, to complain to the ethics commissioner.

It was also a problem for the board of the school that was paying his salary and, apparently, a lot of travel and other expenses.

"Bruce told us he was going to be spending about a quarter of his time at Carbon Management Canada, but we didn't have any way of providing oversight for that," said board chairman Turner.

The current executive director of Carbon Management, Richard Adamson, says there is no reason to audit the $50 million of public funds in that agency's bank accounts to which Carson had access as chairman of the institute.

"All he got were some expense reimbursements — for things like travel."

Greg Weston can be reached at greg.weston@cbc.ca