OTTAWA – Senator Mac Harb is defending his decision to borrow $230,000 from a company with ties to the federal government, a loan he used to repay some of his disputed housing claims and to cover the legal costs associated with the ongoing Senate expense controversy.
Property documents show that Harb borrowed against four separate properties just eight days after being ordered by the Senate to repay thousands in housing allowances on May 9, 2013.
One of those properties was the Westmeath, Ont. home that the Senate says he used to wrongly claim a housing allowance. That house was sold this week, according to property records.
Harb received the loans from a numbered company owned by Ottawa lawyer and businessman Brian Karam. Karam is also a partner of a separate company that runs an extended-stay hotel, which holds contracts with the federal government.
Harb’s lawyer Paul Champ said the senator followed all the rules and did nothing wrong when he accepted the loans.
“Sen. Harb’s loans with Mr. Karam’s corporation were completely transparent, were promptly reported to the Senate in accordance with Senate rules, and were on reasonable commercial terms that are set out in the publicly registered mortgage documents,” wrote Champ in a letter sent to several media outlets.
“There was no advantage of benefit of any kind associated with the loans and they are being repaid with interest.”
Champ’s comments come after media reports questioned whether the loans would be problematic under the Criminal Code.
Section 121 of the Criminal Code states that government officials can’t accept “advantage or benefit” of money from someone who deals with the federal government without first getting written permission from the relevant department or branch.
It is the same part of the law the police are using to investigate Sen. Mike Duffy, who accepted a $90,000 to cover his own housing claims from Nigel Wright, then the chief of staff to Prime Minister Stephen Harper.
Champ said any interpretation that this section would apply to Harb’s loan would be “twisted” and that Harb is “clearly” not a member of the Harper government.
“To suggest that Sen. Harb could somehow influence commercial leasing decisions by the Harper government is ridiculous, “ Champ wrote.
Champ confirmed the senator did not ask for advance permission, but the loans were reported immediately to the Senate in accordance with financial disclosure rules.
Global News initially reported the amount of Harb’s loan to be $145,000 against three Ottawa condominiums, but Champ confirmed there was another loan from the same company, which brings the total to $230,000.
Karam has not responded to Global News’ requests for an interview, but he told The Canadian Press that, to his knowledge, Harb complied with all legal requirements related to the loan.
Harb is one of a trio of senators who have had their housing claims called into question by the Senate, which has accused them of wrongly collecting hundreds of thousands in allowances.
The Senate ordered Harb to repay more than $51,000 in housing allowances this spring, following an independent audit into his expenses. That figure has ballooned to $231,649.07 after the investigation was broadened.
Harb has hired lawyers to fight the report’s findings and the Senate’s authority to make such conclusions. He has also resigned from the Liberal caucus and has repaid $51,000 in housing allowance, but has done so under protest.
With files from The Canadian Press
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