Audit does little to mute Senate controversy

OTTAWA – Independent audits into dubious housing allowance claims by three senators did little Thursday to silence allegations of improper spending and cover-up hanging over Canada’s much-maligned upper house.

Prime Minister Stephen Harper dismissed accusations that the trio was defrauding taxpayers, together collecting nearly $200,000 in invalid housing allowances. Harper declared it a matter of fuzzy rules rather than impropriety.

But New Democrat and Liberal MPs, as well as Liberal Senate leader James Cowan, said the police should have been asked to investigate the housing claims.

“Personally, I think that’s the appropriate thing to do,” Cowan said, predicting that the police would take it upon themselves to review the audits — even without an invitation to do so from the Senate.

The audits, conducted by Deloitte, resulted in the Senate’s internal economy committee demanding that hefty sums be repaid by Conservative Sen. Mike Duffy, former Conservative Sen. Patrick Brazeau and Liberal Mac Harb.

Harb, who intends to fight the matter in court, resigned from the Liberal caucus until the matter is settled.

Conservative Senate leader Marjory LeBreton declared the matter closed and said Duffy will remain in the Conservative caucus. Harper echoed her remarks in the Commons.

“The auditor has concluded that the rules in place were not clear; however, the Senate itself has decided it expects better judgment from the senators,” the prime minister said.

“Sen. Duffy has some months ago repaid the money and the Senate has decided that other senators will be expected to similarly repay those amounts.”

But the integrity of the audit process was also called into question amid suspicions that Duffy was tipped off about irregularities in his expense claims by the chairman of the committee that was investigating them.

A letter from Duffy suggests fellow Conservative Sen. David Tkachuk, head of the Senate’s internal economy committee, told him that Deloitte auditors had found he collected more than $1,000 in a daily living allowance while on vacation for 12 days in Florida.

“Following our informal conversation, Tuesday evening, I went through my files for January 2012,” Duffy says in the April 18 letter to Tkachuk, obtained by The Canadian Press.

“I discovered that through a clerical error, per diems were inadvertently charged for several days when I was not in the National Capital Region.”

The informal conversation referenced in the letter took place April 16 — the same day Tkachuk was briefed by the auditors on their findings.

In the letter, Duffy blames an inexperienced, temporary staffer for the mistake. “This claim was clearly not appropriate and I will reimburse the Senate without hesitation.”

Cowan called Tkachuk’s apparent heads-up to Duffy “certainly not proper.”

NDP ethics critic Charlie Angus said the tip to Duffy, which allowed him to remedy the problem before the audit was complete, demonstrates that the Senate is “an old boys’ club.”

“They’re covering up for each other.”

NDP Leader Tom Mulcair referred to the Senate’s handling of the housing allowance controversy as a “bogus investigation” by Harper’s “hand-picked cronies.”

For his part, Duffy issued a written statement claiming vindication for his assertion that confusing rules led him to mistakenly claim some $90,000 in housing allowances — which he repaid in March.

Duffy said the reimbursed sum included the “erroneously claimed” per diems while on a Florida vacation — an assertion difficult to square with his letter to Tkachuk, which suggests he didn’t know about the per diem problem until mid-April.

The statement, in which Duffy says he won’t be granting interviews or taking media calls, makes no mention of the controversy over Tkachuk’s apparent heads up.

In declaring the matter closed, LeBreton noted that the auditors found the rules governing senators’ primary and secondary residences were not clear, thereby essentially clearing the trio of deliberate fraud.

It’s sufficient that the three senators will be forced to repay allowances that were improperly claimed, LeBreton said.

In March, Duffy reimbursed the Senate $90,000 for a housing allowance he said he may have mistakenly claimed due to confusing paperwork.

Harb is now being asked to repay almost $51,500 and Brazeau almost $49,000 in allowances claimed from April 2011 to Sept. 30, 2012.

Harb and Brazeau may yet have to repay even more money. The internal economy committee has decided to extend its review of their expense claims to cover the entire period since they were appointed to the upper chamber — an additional seven years worth of claims for Harb and two years for Brazeau.

The controversy, which erupted last fall, revolves around a housing allowance intended to compensate senators whose primary residence is more than 100 kilometres outside the national capital area. They are entitled to claim up to $22,000 a year in compensation for maintaining a secondary home in Ottawa.

Duffy, a former journalist who has lived in the capital for years, claimed his cottage in Prince Edward Island as his primary residence. The audit found he spent just 30 per cent of the 549 days reviewed by auditors at his P.E.I. home.

Harb, who represented an Ottawa riding as an MP and owns several properties in the capital, claimed a bungalow in Westmeath, near Pembroke, Ont., as his primary residence. He put the bungalow up for sale several weeks ago.

The audit found Harb spent only 21 per cent of his time at the Westmeath residence.

In a written statement, Harb said it’s irrelevant whether he spent more time in Ottawa than his designated primary residence.

“This criterium is not found in Senate regulations or guidelines and has never been communicated to senators or implemented by financial officers,” he said.

Brazeau, who had been living with his girlfriend just across the river from the capital in Gatineau, Que., claimed his father’s home in Maniwaki, Que., as his primary residence. The audit found he spent just 10 per cent of his time in Maniwaki.

In an unrelated matter, Brazeau was kicked out of the Conservative caucus and forced to take a leave of absence from the Senate after he was charged with assault and sexual assault in February.

A separate audit into Conservative Sen. Pamela Wallin’s travel expenses is continuing.

The furor over housing allowances erupted last fall and has cast a pall over the upper chamber.

“This was a crisis, pure and simple,” Tkachuk said in a written statement, adding that his committee has tightened the rules for claiming expenses and clarified the definition of primary residence.

Tkachuk did not speak to reporters Thursday and did not mention in his statement the controversy over his apparent heads-up to Duffy about his invalid per diem claims.

The spending controversy has also raised questions about whether Duffy and Wallin are entitled to sit in the Senate at all.

A senator is required by the Constitution to reside in the province he or she was appointed to represent. Duffy was appointed by Harper to represent P.E.I., Wallin to represent Saskatchewan.

Wallin’s travel expenses suggest she spends little time in her home province. But she maintains that’s because there are few direct flights to Saskatchewan and only direct flights are counted by the Senate as travel to one’s home province.

In the Commons, Mulcair noted that even Harper’s appointees on the internal economy committee have concluded that Duffy does not reside in P.E.I.

“Why,” he demanded, “is the prime minister allowing this continuous fraud by the Conservatives in the Senate?”