Watch: Tom Clark takes you through the key dates of the controversy swirling around Mike Duffy’s Senate expenses.
OTTAWA – The trial of the year started with a simple question: where does Mike Duffy live?
It was not as easy to answer as one would expect.
The query would result in a 17-month RCMP investigation, 31 criminal charges, and one prime minister’s office under the microscope.
It has since ballooned from the foggy issue of a senator’s primary residence to one of fraud and breach of trust allegations, sketchy consulting contracts, and a one-way bribery charge stemming from a $90,000 cheque to Duffy from Prime Minister Stephen Harper’s right-hand man.
“I am sure that I am not the only Canadian who will now wonder openly, how what was not a crime or bribe when Nigel Wright paid it on his own initiative, became however mysteriously, a crime or bribe when received by Sen. Duffy,” Duffy’s lawyer, Donald Bayne, said when Duffy was charged last year.
Wright has said in public statements he did nothing illegal, and acted only in the interest of taxpayers.
All the while, Duffy has maintained his innocence – claiming the Conservatives, including Harper, orchestrated the “monstrous fraud” of a cover-up to satisfy their base.
LISTEN: Mike Duffy fires back at PMO
It will all play out during a crucial election year in a tiny downtown Ottawa courtroom starting on April 7.
Senators, MPs, and high-ranking current and former government officials are expected to take the stand over 41 days of scheduled trial dates, from April to June.
With the political curtain pulled open, and a scorned former Conservative star in the forefront, it promises to be the spectacle of the year.
Let the Mike Duffy trial begin.
On Dec. 4, 2012, the Ottawa Citizen published a story that revealed Duffy, a Conservative senator representing Prince Edward Island, had claimed $33,000 in living allowances for his west-end Ottawa suburban home since September 2010.
Under the upper chamber’s rules, senators are allowed to charge up to $22,000 annually for living and travel expenses for a second home in the nation’s capital – if they are commuting more than 100 km for work.
The amounts were published in proactive expenses – brought in by the Conservatives – listed on the Senate website.
But, as the story pointed out, Duffy had already lived in the Ottawa-area for more than 40 years – working as a journalist at CBC and later CTV, where he hosted an eponymous weekday political show.
So why was he claiming money to live in Ottawa?
At the time, Duffy said he was appointed to represent his home province and his primary residence was in Cavendish, P.E.I.
He was entitled to claim expenses to stay in Ottawa for his Senate duties, he said.
“I have been claiming these expenses routinely, as I was told I could do at the time of my swearing-in in 2009,” Duffy said in an email on Feb. 7, 2013 obtained by the RCMP.
Duffy wasn’t the only one, either: Conservative senator Patrick Brazeau also claimed expenses to reside in the national capital region, even though the RCMP alleges he didn’t really live in his primary residence in Maniwaki, Que.
And Liberal Mac Harb, since retired, was claiming money to live in Ottawa while maintaining an “uninhabitable home” in Cobden, Ont., police say.
Both have denied wrongdoing.
The expenses, we’d later learn, piqued the Mounties’ interest in March 2013, after they were referred by the Senate to accounting firm Deloitte for a second look.
But the story was far from over.
Behind the scenes, as revealed in RCMP emails released by the court as publicly-available documents, it appeared the Conservative leadership was getting worried.
The prime minister’s office
In February 2013, according to police documents, the prime minister’s office started getting involved in the Duffy affair.
It came to the attention of Wright, Harper’s chief of staff, after a Senate committee referred the Duffy, Harb, and Brazeau claims to Deloitte for external review.
Wright’s job was, in part, to put out political fires.
This was turning into a five-alarm.
“I think this is going to end badly,” Wright wrote in a prescient email on Feb. 6, 2013.
For more than a month, the PMO negotiated with Duffy over how and what to repay. Duffy insisted he didn’t do anything wrong, and documents show his increasing concern with losing his Senate seat if he said he lived in Ottawa.
It was a process that involved Duffy’s then-lawyer, Janice Payne, and the PMO’s counsel, Benjamin Perrin, as well as Wright, and a handful of Conservative senators and staffers.
The emails show Wright worked closely with Conservative senators Carolyn Stewart Olsen, Marjory LeBreton and David Tkachuk on how a subcommittee would handle a report into Duffy’s expenses once the audit was complete.
Whether he was legally allowed to claim expenses or not, Wright believed Duffy should not have been submitting them to taxpayers.
But he also wanted the story kept quiet.
Through his lawyer, Duffy made five demands, including that the audit be stopped, and that his expenses including legal fees be reimbursed.
On Feb. 13, Harper and Wright met with the senator after caucus – in Duffy’s words, “just the three of us.”
Duffy said Harper threatened to expel him from the Senate, but the prime minister denied it, telling the Commons months later he told Duffy to repay the money.
“You’re darn right I told him to repay his expenses,” Harper told the House of Commons in October 2013.
According to emails, a deal with five preconditions was in place around Feb. 22, 2013.
It appears Wright discussed in some capacity the plan with Harper.
“We are good to go from the PM once Ben (Perrin) has his confirmation from Payne,” Wright wrote in one email obtained by the RCMP.
It was initially believed Duffy owed $32,000, an amount he claimed he could not pay. Wright asked Senator Irving Gerstein, who chairs the Conservative fund, to cover the cost.
Gerstein agreed. But the cost later ballooned to $90,172.24, when Wright learned Duffy also charged meals and per diems. Gerstein said it was too much for the party to cover.
After fruitless attempts to get Duffy to pay up, Wright decided on March 8 that he would cover the cost.
“For you only: I am personally covering Duffy’s 90K,” he wrote in an email to Chris Woodcock, the former director of issues management at the PMO.
The RCMP believe at least four others, including three in the PMO, knew as well.
Duffy faces three charges – bribery, fraud and breach of trust – related to the $90,000 cheque.
Although initially under RCMP investigation, Wright was not charged – and is expected to be a key Crown witness.
For his part, Duffy blames it all on a “misguided sense of loyalty” and fear of losing his job.
“This monstrous fraud was the PMO’s creation from start to finish,” he told the Senate on Oct. 28, 2013.
In October 2013, RCMP Cpl. Greg Horton, the lead investigator on the Duffy case, made another allegation in court documents requesting banking information.
In reviewing Duffy’s office expenses, something else had caught the Mounties’ eyes.
Over the course of four years, Duffy had hired his friend Gerald Donohue, a former CTV technician-turned-human resources administrator, on Senate contracts for a total of $65,000.
But Donohue, the Mounties said, had done “little to no apparent work.”
Instead, the RCMP was investigating whether the money was re-routed to three other people on the Duffy payroll: an office worker, a makeup artist and a personal trainer.
All are expected to testify in court.
Throughout March and April 2013, Deloitte was finishing its audit of three senators: Duffy, Brazeau and Harb.
The RCMP documents suggest Wright tried to push the auditors to find Duffy’s residency inconclusive if he paid back $90,000. He asked Gerstein, who has a connection to the company, to call Deloitte and find out.
But according to the RCMP, the auditors said it would go ahead – even if Duffy paid the money back.
In the end, the Deloitte report found a lack of clarity in Senate regulations and guidelines when referring to primary and secondary residences. They found no fault on Duffy’s part, but said he spent a majority of his time in Ottawa.
But auditors also found 12 instances where Duffy claimed per diems from the Senate while vacationing in Florida – a mistake Duffy blamed on his staff.
On May 7 and 8, 2013, a Senate steering committee comprised of Conservative senators Stewart Olsen and Tkachuk, as well as Liberal Senator George Furey, were tasked with reviewing an administrative report based on the audit.
Stewart Olsen, who had been in touch with Wright throughout the audit, introduced major changes to Duffy’s Senate report, removing all criticisms because he had already repaid the $90,000.
A week later, it emerged that Wright, not Duffy, had repaid the money. After initially defending his chief of staff, Harper accepted Wright’s resignation on May 19, 2013.
It wasn’t enough to stem the tide of criticism.
An emergency Senate committee met in the evening of May 28, 2013, to discuss Duffy’s living expenses.
Senate clerk Gary O’Brien testified that the Florida per diems from January 2012 were not an isolated incident.
There were 49 other instances, he said, later revealed to include Duffy claiming expenses from the Senate while allegedly campaigning for the Conservatives.
“It represents a pattern that raises concerns,” O’Brien said.
On May 29, 2013, the Senate officially referred the Duffy matter to the Mounties.
And on July 17, 2014 Duffy was charged with 31 offences: about half relate to allegedly “inappropriate” expense for personal and partisan activity, including attendance at funerals; another eight have to do with Donohue’s contract, and three relate to Wright’s $90,000 payment.
Bayne, Duffy’s lawyer, says Duffy has never had a fair hearing, either in the Senate or in the media.
“We are confident that when the full story is told, as it will be, and shown to be supported by many forms of evidence, it will be clear that Sen. Duffy is innocent of any criminal wrong-doing,” he said when charges were laid.
Bayne has refused to rule out calling Harper to the stand.
But even if he doesn’t testify, the trial is sure to resonate in the halls of Parliament, and beyond, as Canada prepares for a fall election.