Politics

Mike Duffy defends arrangement to pay controversial expenses

Mike Duffy said hiring his colleague Gerald Donohue as a general contractor who then paid for some of the senator's expenses the Crown now contends were inappropriate was a valid payment structure.

Pre-signing forms not part of scheme to defraud the Senate, Duffy says

Mike Duffy and his lawyer Donald Bayne arrive for the fourth day of Duffy's testimony 0:59

Mike Duffy said hiring his colleague Gerald Donohue as a general contractor who then paid for some of the senator's expenses the Crown now contends were inappropriate was a valid payment structure.

"As long as it's Senate money for Senate work, it's all 100 per cent appropriate," Duffy told on Ottawa courthouse on Friday during his fourth day testifying at his criminal trial.

"It's probably less costly and more efficient and with a lot less rigmarole."

Duffy has pleaded not guilty to 31 charges of fraud, breach of trust and bribery related to expenses he claimed as a senator and later repaid in March 2013 with $90,000 from Nigel Wright, who at the time was chief of staff for then prime minister Stephen Harper. The trial began in April at the Ottawa provincial courthouse.

Court has heard that a series of Senate research contracts worth $64,916.50 were awarded by Duffy to Donohue, mostly to perform editorial, research, consulting and speech-writing services. It was out of this fund that Donohue, through his family-owned company Maple Ridge Media Inc. (which later became Ottawa ICF), paid out cheques for other expenses claimed by Duffy.

It's the Crown's contention that Duffy set up a fund with Donohue to pay for some inappropriate or non-parliamentary services — expenses that the Crown says wouldn't otherwise have been covered by Senate finance.

Duffy's lawyer Donald Bayne asked if he was attempting to defraud the Senate by having people provide services for him under a general contract type of format.

"No," Duffy said, adding it was a common practice.

"Did you believe that structure was valid?" Bayne asked him.

"Exactly," Duffy said.

Duffy described Donohue as his most important adviser, and worth the money he himself received.

"He was number one," Duffy testified. "Because you name a topic and he had some background and could find more on it."

Duffy said Donohue, who he has known since 1988 when he was director of human resources at CJOH, was his "sounding board" who provided him with invaluable advice. He said he spoke to Donohue many times a week, and was in constant contact with him through email and telephone, as they dealt with Senate issues.

Duffy said much of that advice he received from Donohue was not written, which, according to Duffy, was a common practice. He said it amounted to about 200 hours a year, which Bayne estimated at around $30 an hour. Duffy suggested Donohue was a bargain, as consultants on Sparks Street would make anywhere from $300 to $800 an hour.

Donohue, the RCMP allege, was awarded contracts and paid "an inflated rate for the type of service purportedly provided."

"Did you get value for the work?" Bayne asked Duffy.

"Not only did I get value, the people of Canada were well served," Duffy said.

Pre-signed blank travel-claim forms

Earlier, Duffy testified that he pre-signed some blank travel-claim forms to expedite the process of getting his expenses in to Senate administration on time, saying it was a" very widespread" practice.

​"In order to assist the staff to get this thing done expeditiously, I pre-signed a batch of forms," Duffy testified in an Ottawa courtroom Friday. "As many of my colleagues did."

During the course of the trial, court heard that Duffy had pre-signed a stack of blank travel claims before any details about trips had been provided on the documents.

​Duffy said from the first days of the Senate, senators were told to get their claims in on time or they may have to assume the cost. Senators had 60 days to submit a claim.

Duffy said he submitted one claim for $5,000 or $6,000 that was nearly rejected because Senate finance said they received it too late.

"Being told you're within a whisper of being on the hook for six thousand bucks makes you certain to get your stuff in on time," he said.

'It was very widespread'

Asked by Bayne how common it was to pre-sign travel-claim forms, Duffy said, "It was very widespread and it was all in aid of meeting the 60-day deadline."

He said he would also pre-sign cheques for his staff to pay for bills related to the Senate and its operation.

Senator Mike Duffy, centre, arrives with his lawyer, Donald Bayne, for his fourth day testifying in his trial on fraud, breach of trust and bribery charges. (Lorian Belanger/CBC)

Bayne asked Duffy if he had any intention of committing a fraudulent scheme by pre-signing expense forms and cheques.

"None whatsoever," he said.

Costs of attending funerals

Duffy defended his travel expense claims for the cost of attending a number of funerals, saying that attendance was part of his duties as a senator.

Bayne questioned his client about a series of trips he took for funerals that he attended in Prince Edward Island.

Duffy said some of the funerals were for distinguished Canadians, and that he was representing the government of Canada.

The senator also testified that the main purpose of two other separate trips, during which he attended the wake of his cousin and the funeral for an acquaintance, was for public business and to meet with regional representatives about projects related to P.E.I.

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