Investigation of Nigel Wright gifting $90k to Senator Duffy

Referral of Matter of Senator Duffy

The investigation of Senator Duffy commenced in March of 2013 after media reports stated that Deloitte had been hired to review expenses. The Senate later referred the matter to the RCMP in late May. The letter of referral was signed by Speaker Noel Kinsella on behalf of the Standing Committee on Internal Economy, Budgets, and Administration. On or about the same time, National Division initiated investigations on Senators Mac Harb and Patrick Brazeau, and in late August the matter of Senator Pamela Wallin was also referred, which is part of a separate investigation. Senators Harb and Brazeau are now before the courts on fraud and breach of trust charges, while the investigation of Senator Wallin is on-going. The evidence gathered against Senator Duffy has been given to the assigned Crowns for review.

Primary Focus of Project Amble - Senator Duffy

The fact that four Parliamentarians are subject of criminal investigations is relevant to the matter of Senator Duffy. This revealed that the use of Senate resources other than for the public good was not limited to Senator Duffy's actions, but that the problem may have been more widespread. The integrity of the institution of Parliament was put at risk by these allegations. For this very reason, the primary focus of Project Amble was to determine the veracity of the allegations of criminal wrongdoing by Senators Duffy, Harb, and Brazeau, and if true, to gather all evidence in order to assess the scope and extent of these crimes.

The referral regarding Senator Duffy's alleged use of Senate resources coincided with the public revelation that Nigel Wright, then Chief of Staff to the Prime Minister's Office, gifted $90k to Senator Duffy. According to the evidence gathered, this was done so that the senator could reimburse the Senate for inappropriate expense claims related to a secondary residence in the NCR. This also drew the attention of National Division investigators and was also deemed the focus of this investigation. Although Mr. Wright held a very influential and important position within the PMO, Senator Duffy was the appointed official who held one of highest offices within our democratic system.

The investigation revealed that Senator Duffy used Senate resources for personal gain in connection with his duties as a public official. As the investigation evolved and expanded, the evidence gathered led investigators to identify four separate avenues of investigation:

1. Fraudulent residency claims;
2. Fraudulent travel claims;
3. Fraudulent contracts that were paid from the public purse to Gerald Donohue, and
4. Demands made by Senator Duffy of the PMO, including the $90k from Nigel Wright.

Determinations to be made

As the investigation was nearing completion, investigators conducted a thorough second review of all evidence/information within the investigative file. This review was specifically with regard to the matter of the gifting of $90k by Nigel Wright to Senator Duffy, as well as all other involvement of Mr. Wright and the PMO respecting the Deloitte audit. It was conducted in view of determining whether there is a need to interview Prime Minister Harper, and whether Nigel Wright ought to be charged criminally. The review included the relevance of evidence obtained from Mr. Wright, including a copy of Senator Duffy's printed electronic calendar which was provided to Nigel Wright by Senator Duffy in February, 2013.

Relating to Avenue 1 - Residency

The initial focus of the investigation was to make a determination where Senator Duffy's primary residence was. He has claimed that his primary residence is in PEI, and thus collected a living allowance relating to a secondary residence in Ottawa. Documentary and witness evidence, aided by Senator Duffy's calendar^{Footnote 1} provided to investigators by Mr. Wright assists in clearly demonstrating that Senator Duffy's primary residence was in fact in Ottawa. The details within the calendar have allowed investigators to determine when Senator Duffy was in PEI, and when he was in Ottawa or elsewhere. Based on the contents, PEI is clearly not his primary residence, but rather a vacation or summer home. The calendar given to investigators by Mr. Wright, along with other evidence, will provide valuable evidence to support charges of breach of trust and fraud regarding residency.

Relating to Avenue 2 - Inappropriate Expenses

Early on in the investigation it was revealed that Senator Duffy filed certain NCR per diem expense claims for days when he was actually in Florida on vacation. Senator Duffy has stated publicly that he filed those claims in error. A further in-depth review of his expenses by investigators has revealed that there are a number of occasions when Senator Duffy filed expense claims for which he was not entitled. Some are as simple as claiming NCR per diem for days when he was not in the NCR, however others relate to claiming travel for matters of "Senate Business" which investigators have determined were travel for personal reasons. The investigation has revealed that the actual purposes of some of the claimed travel was to attend a paid speaking engagement as part of his business Mike Duffy Media Services (MDMS), to visit his children, to attend a medical appointment, to attend funerals, and to buy a dog. While his Senate expense claims often just cite "Senate Business" as the reason for the travel, Senator Duffy's private calendar provided by Mr. Wright reveals the true purpose of those trips. Witness statements further corroborate the evidence gathered as a result of the calendar. The total amounts claimed relating to these frauds is in excess of $50,000. Charges of breach of trust and fraud are proposed based on that evidence.

Relating to Avenue 3 - Gerald Donohue

The investigation of Senator Duffy's office expenses revealed irregularities in contracts awarded to companies controlled by Gerald Donohue. Further investigation and an interview of Mr. Donohue revealed that he and Senator Duffy were long-time friends, and that Senator Duffy's Senate office awarded Mr. Donohue approximately $65,000 in consulting contracts. According to his own statement, Mr. Donohue did little or no work for Senator Duffy's office. Mr. Donahue's banking records have shown that while the Senate paid Mr. Donohue pursuant to these contracts, Senator Duffy would in turn have Mr. Donohue pay for some of his personal and Senate expenses. This included more than $10,000 for a personal trainer. Senator Duffy referenced the appointments with his personal trainer in his calendar, as well as contact he had with Mr. Donohue and references to his Senate contracts. On another occasion Senator Duffy had Mr. Donohue pay expenses relating to having his makeup applied prior to a TV appearance. This is also referenced in his calendar. There are also several instances where Mr. Donohue pays for services related to the Senate, such as photographs, research, and speech writing. These were all done without Senate oversight or approval. Some are referenced in Senator Duffy's calendar. While not as vital as it is to investigative avenues 1 and 2, the calendar does provide supporting evidence relating to this aspect of the investigation. To date, investigators can account for approximately $26,000 of the $65,000 paid to Mr. Donohue which was kicked back to Senator Duffy via services, examples which are referred to above.

The granting of contracts to Mr. Donohue totaling approximately $65,000 comprises the total value of the fraud and breach of trust to be alleged against Senator Duffy as part of this investigative avenue. Witness evidence, in addition to evidence obtained from Senator Duffy's calendar, and banking information, will show that Senator Duffy breached the standard of a public officeholder. These offences are the most egregious and flagrant and demonstrate how Senator Duffy went to great lengths to circumvent Senate expense policy so that he could benefit personally from a fraud on the public purse.

Avenue 4 - Nigel Wright and PMO

In July of 2013 a cautioned statement was obtained from Nigel Wright in the presence of his counsel. Mr. Wright was cooperative and forthright with investigators then and throughout this investigation.^{Footnote 2} He provided tangible evidence that the investigative team may not have otherwise had the legal grounds to gather. This cooperation has allowed investigators to further advance the investigation of Senator Duffy. Specifically, that evidence he provided consists of:

• Two binders of e-mails relating to the PMO dealings with the matter of Senator Duffy (some of which contained solicitor-client communications);
• A binder containing detailed day-by-day calendar of events of Senator Duffy since his appointment to the Senate.

The e-mails contained in the two binders are exchanges which took place internally within the PMO, between the PMO and certain Senators, between the PMO and Senator Duffy, and between the PMO and Senator Duffy's lawyer. They provide a breakdown and timeline of events relating to how the PMO dealt with the matter of the review of Senator Duffy's expenses, as well as actions taken by those involved. Evidence gathered from these also show that it was Senator Duffy who initiated demands of the PMO, including that he be reimbursed $90,000 plus legal fees, and not to the contrary as Senator Duffy has stated publicly. These e-mails have allowed investigators to advance the investigation and to make factual determinations which otherwise would have likely remained unanswered. The proposed charges against Senator Duffy relating to this avenue are breach of trust, fraud on the government, and bribery.

The binder containing Senator Duffy's calendar also contains valuable evidence for investigative avenues 1, 2 and 3. It is a printout of an electronic calendar which was prepared by Senator Duffy in February 2013, and sent by courier to Nigel Wright. Senator Duffy referenced the binder in a February 20 e-mail, stating that he sent it to Mr. Wright. The purpose at the time appears to have been to show Mr. Wright the extent of the work he was conducting on behalf of the Conservative Party. The value of Mr. Wright as a witness to introduce those e-mails in court cannot be overstated.^{Footnote 3}

Review of E-Mail Evidence

The evidence gathered shows that it was Senator Duffy who made five demands of Mr. Wright and the PMO before he agreed to reimburse the Senate. Nigel Wright wanted Senator Duffy to stop making statements to the media regarding the legality of his entitlements, as this was becoming an embarrassment and distraction to the government. As early as February 21st, 2013, Janice Payne, on behalf of Senator Duffy made the following demands:

1. Internal Economy will remove Senator Duffy from the Deloitte audit, confirm that his expenses are in order and that Senator Duffy not be subject to any further review by any other party;
2. A written acknowledgement that Senator Duffy meets and has always met all requirements necessary to sit as a Senator from PEI;
3. As Senator Duffy's ineligibility to claim housing allowances is due to his time on the road for the Conservative Party, he will be kept whole. Also, his legal fees will be paid;
4. If Senate rules are changed in the future, which would allow Senator Duffy to claim the allowance, he will do so;
5. PMO will ensure that Conservative caucus members will use consistent media lines when discussing the Senator Duffy matter.

In an email dated February 21, Nigel Wright agrees with some of the demands made by Senator Duffy, but disagrees with others.

On March 25th, Janice Payne sent an email to Benjamin Perrin, counsel for the PMO, requesting certain further assurances. The email reads as follows:

"... the Government Leader in the Senate will urge her caucus to vote against such a motion as well as any motion to refer the matter of his housing and expense claims related to the designation of PEI as his primary residence for further investigation or action by Deloitte, the RCMP, or any other party".

In an email to PMO counsel Benjamin Perrin, Mr. Wright categorically disagrees:

"how can we do that? If someone thinks that a crime has occurred, can we have an internal agreement not to refer it to the RCMP? I think it would be a scandal, no? Unless you guys disagree, I think we tell her we cannot mention the RCMP".

Again on May 12, Mr. Wright responds to an email chain from Ray Novak and Senator Linda Frum regarding Senator Duffy:

" .. I don't know if the RCMP really are investigating. I personally don't think that Mike committed crime at all- if I did we would have pursued a different course".

The evidence shows that Mr. Wright was not aware early on that Senator Duffy had committed any criminal acts relating to filing of living and expense claims. He believed that the senator was constitutionally entitled to sit as a senator from PEI. Senator Duffy on the other hand, as the police investigation has now been able to show, knew that he had committed fraud and breached the standard of a public office holder while a sitting senator. He knew this while he was making demands of Mr. Wright and the PMO. The investigation has not gathered any evidence showing that Mr. Wright knew or ought to have known about the offences outlined in avenues 1, 2, and 3. The demands made by Senator Duffy provide sufficient evidence to pursue a charge under the bribery and breach of trust provisions of the Criminal Code. It could be inferred that Senator Duffy knew that if an audit by Deloitte was to continue, or an investigation was to be initiated by the RCMP, that his crimes would be exposed.

Through his lawyer and in an address to the Senate in October of 2013, Senator Duffy made public statements to the effect that it was in fact the PMO who had come up with this "monstrous fraud". Senator Duffy also claimed that there were threats and intimidation made by the PMO and that he agreed to go along with "this scheme". On November 1st, a letter was sent to Senator Duffy's lawyer requesting that Senator Duffy tum over any evidence that may provide the bases for the claims he made in the Senate. To date no such evidence was ever turned over. It is worthy to note that Senator Duffy made these claims while addressing the Senate, where he enjoys Parliamentary privilege.

In addition to the hundreds of e-mails provided by Mr. Wright, investigators obtained the e-mails of PMO staffers, as well as e-mails of Senator Duffy and other Senators. A review of evidence in our holdings shows that in February and March of 2013, when Mr. Wright and Senator Duffy were negotiating the terms in which Senator Duffy was to reimburse the Senate, Mr. Wright did not believe or know that Senator Duffy had committed any crime, but rather was of the belief that he had claimed the expenses as part of an administrative misunderstanding or error. Mr. Wright stated that his decision to assist Senator Duffy with the $90k repayment as personal, and that he did it because he believed in being a good person. Though he did believe that on moral and ethical grounds Senator Duffy ought to reimburse the Senate, he did not believe or know that that any fraud relating to his housing expense claims. During the month of February while Mr. Wright and Senator Duffy were dealing with this matter, Senator Tkachuk cited the "Sgro precedent" to Mr. Wright. By this he was referring to the matter of MP Judy Sgro, who had filed inappropriate living expenses. MP Sgro repaid the monies and the matter was rendered moot. Senator Tkachuk suggested that if Senator Duffy admitted the error and reimbursed, the Deloitte audit would be rendered moot. In his statement, Mr. Wright stated that because of his personal beliefs and ability to pay, he did not himself claim any expenses while working at the PMO. After Senator Gerstein was' informed that Mr. Wright was going to use personal resources to gift $90k to Senator Duffy, he suggested to Mr. Wright that he claim $60k from the Conservative Fund as part of past legal fees that Mr. Wright had personally paid which were related to his employment with the PMO. Senator Gerstein suggested this as a means for Mr. Wright to recover part of his $90k. Mr. Wright refused. These facts are material to our investigation as they reveal his motivation and state of mind when dealing with Senator Duffy regarding reimbursement.

Nigel Wright, by his own admission, wanted the matter of Senator Duffy's expenses to go away as it caused embarrassment to the government. His exact wording in a February 15 email when referring to this embarrassment was "Chinese water torture of new facts in the public domain, that the PM does not want ..." He believed that if the Senate would be reimbursed, the Deloitte audit would be rendered moot. He did ask Senator Gerstein to call on his contacts at Deloitte to determine what would occur if Senator Duffy reimbursed. The investigation revealed that Senator Gerstein did ask the question to Mike Runia, a managing partner at Deloitte, but that the review continued and that auditors were never told to stop their work. Statements taken from Nigel Wright, Senator Gerstein, Senator Tkachuk, Senator Lebreton, Senator Furey, Senator Stewart Olsen, David Hilton, Arthur Hamilton, Chris Woodcock, Patrick Rogers, David Van Hemmen, Ray Novak, Mike Runia and Deloitte auditors did not provide the evidence to pursue charges with respect to alleged interference with the Deloitte review. Nigel Wright found out on March 21st that Deloitte would continue its review, but nonetheless obtained a bank draft several days later which he gave to Senator Duffy's lawyer, to cover the costs of the senator's reimbursement to the Senate.

Decision on Whether to Interview Prime Minister Harper

In his statement to investigators, Nigel Wright stated that the gifting of $90k to Senator Duffy was his own decision. He had the resources to cover the cost, and believed that the tax payer should not have to pay. He admitted to making a mistake, but that the mistake was his own doing and was not directed from the Prime Minister. He was specifically asked whether Prime Minister Harper was aware, to which he answered that he was not. Statements obtained from a number of Senators involved in this matter, as well as PMO staffers and PMO in-house counsel Benjamin Perrin did not reveal any evidence that Prime Minister Harper had directed, influenced, or otherwise knew of the $90k payment to Senator Duffy.

Evidence was gathered that Prime Minister Harper was aware in general terms only that Mr. Wright and PMO staffers were dealing with the matter of Senator Duffy, but no information or evidence was gathered that he knew specifically about the $90k. This is substantiated by the email review conducted as part of this investigation and through a statement obtained from Ray Novak who replaced Nigel Wright as Chief of Staff. Based on this, there is no reason to believe that interviewing the Prime Minister would provide any additional evidence.

In view of the evidence in our investigative holdings, there is no basis upon which to conduct an interview of Prime Minister Harper.

Offences Considered Against Nigel Wright

There were sufficient reasonable grounds to pursue an investigation on Mr. Wright with regard to the criminal offences listed below. However, in order to charge and secure a conviction on any of these, the test will be much higher. The charges considered against Mr. Wright related to his gifting of $90,000 to Senator Duffy and for exerting pressure on the Senate sub-committee to change or modify the Senate report relating to Senator Duffy's audit are as follows:

• Receiving Prohibited Compensation - Section 16 of Parliament of Canada Act
• Breach of Trust - Section 122 of the Criminal Code
• Frauds on the Government - Section 121 of the Criminal Code;
• Bribery of a Judicial Officer - Section 119 of the Criminal Code.

This investigation commenced as an examination of the housing expenses claimed by Senator Duffy as set out in avenue 1. It has since evolved to include avenues 2, 3 and 4.

The decision on whether or not to seek charges against Mr. Wright must be an assessment on the weight or value of the evidence he can provide in the matter of Senator Duffy, versus the prospects of a conviction on any charges that may be brought against him. Investigators conducted an in-depth assessment of the probative value of any testimony Mr. Wright would provide as a witness. This must be assessed with the overarching goal of attaining the objectives of the investigation.

As stated earlier, the primary focus of this ·investigation was on members the Senate of Canada. The evidence against Senator Duffy clearly shows that criminal charges are warranted. Any decision to charge Nigel Wright must necessarily take into consideration the evidence available to prosecute the case in court, which must include a review of facts with a view of determining whether he had any criminal intent. Senator Duffy and his lawyer Janice Payne refused to cooperate with the investigation. Senator Duffy invoked his constitutional right to silence, and Janice Payne was bound by solicitor-client privilege imposed by Senator Duffy. While Senator Duffy and Ms. Payne could be subject to subpoena, as joint participants and instigators of any wrongdoing, it is difficult to anticipate the nature and quality of the testimony they might provide in court. These factors were considered when weighing whether there exists a reasonable prospect of a conviction against Mr. Wright.

Receiving Prohibited Compensation

The evidence gathered against Mr. Wright may not provide sufficient evidence to secure a charge under Section 16 of the Parliament of Canada Act. The section reads as follows:

"No member of the Senate shall receive or agree to receive any compensation, directly or indirectly, for services rendered or to be rendered to any person, either by the member or another person"

There is no evidence to show that Senator Duffy was to render a "service". Therefore this was not an offence for which Mr. Wright could be charged. The agreement that Senator Duffy would reimburse and follow the PMO proposal does not fall within the definition of "service".

Breach of Trust

Under the breach of trust provisions of the Criminal Code, one of the elements to be proved would be that Nigel Wright or someone else would have had to receive a benefit in order to secure a conviction. The deal between Senator Duffy, and Nigel Wright and the PMO, may have provided a benefit to the Conservative Party. The matter of Senator Duffy's expenses was an embarrassment arid distraction to the government, and it was on this basis presumably that Mr. Wright wanted the matter to de dealt with. In practical terms, it has been the practice to require a "tangible benefit" or "personal benefit" in order to prove all the elements of the offence. In addition, the prosecution would have to prove mens rea, that Mr. Wright's actions were for reasons other than for the benefit of the public or "public good". The evidence in fact shows that Mr. Wright thought it in the public interest to repay the $90k. He did not want the tax payer to have to pay for Senator Duffy's expenses, which he believed the Senator ought not have claimed on moral and ethical grounds. As stated earlier, Mr. Wright at the time of his gifting of the $90k did not believe or know that Senator Duffy had committed any criminal acts relating to the his expense claims. Mr. Wright was not aware that Senator Duffy had committed any crime, and was thus not trying to conceal any criminal offence.

Frauds on the Government

With respect to an offence under the Frauds on the Government provisions of the Criminal Code, there may be sufficient evidence to charge Nigel Wright. It could be argued that Mr. Wright was trying to "pay off' Senator Duffy so that the matter would no longer be in the public domain and be an embarrassment to the government; or that the matter may have shown that Senator Duffy was not qualified under the Constitution to sit as a senator from PEI. Investigators believe that proving all the elements of the offence may be difficult when considering available evidence, and taking into consideration that two key collaborators in the repayment scheme – Senator Duffy and Ms. Payne - have not provided any evidence. Ms. Payne could be compelled to testify, but it is unlikely that Senator Duffy would waive his solicitor-client privilege. Senator Duffy could also be compelled, but the nature and quality of his testimony cannot be assessed at this time.

One element that must be proved under this section is that any "advantage" or "benefit" must relate to "the transaction of business relating with or any matter of business relating to the government"... This section has been traditionally used for matters where an advantage is given to an official in exchange for an "advantage" or perceived advantage with regard to contracting. It is not clear whether the $90k given to Senator Duffy applies within the confines of this section. As elaborated on earlier with regard to the breach of trust evidence, proving a benefit to Nigel Wright or someone else, as well as criminal intent, may be difficult to prove beyond a reasonable doubt.

Bribery of a Judicial Officer

The evidence gathered shows that it was Senator Duffy who had devised or proposed the scheme to be reimbursed for his ineligible expenses. He also made a number of other demands of the PMO and Nigel Wright in an attempt to protect himself from further scrutiny. There is evidence that puts the propriety of these claims into question, but there is no evidence to show that Nigel Wright was aware that Senator Duffy had committed fraud, and was taken aback when Senator Duffy's lawyer requested that there would be no future referral to the RCMP. The prosecution of any charge under this section would have to prove that any person providing the bribe "corruptly gives" for the benefit of an official any money or other valuable consideration for the official to do or not do something. The evidence has shown that Nigel Wright was consistent in telling Senator Duffy to reimburse the Senate. Had Senator Duffy done so without later making demands of the PMO and Nigel Wright, Mr. Wright would not have been placed in position of gifting any monies. Mr. Wright's actions would have to be proven to be for a corrupt purpose.

Some of the evidence in our holdings reveals that Mr. Wright provided the $90k so that tax payers would not have to foot the bill, believing that it was the ethical and moral thing to do. There has been suggestions that there was an effort by Mr. Wright and others to have Deloitte halt their audit, and that this was part of the deal between Mr. Wright and Senator Duffy. No criminality has been found in that regard, and in fact the evidence shows that Mr. Wright found out on March 21 that the Deloitte review of Senator Duffy would continue, and he proceeded to gift the $90K to Senator Duffy through his lawyer four days later. This latter piece of evidence reinforces that fact that Mr. Wright gifted the monies on moral and ethical grounds, rather than to have the Deloitte review stopped.

The evidence gathered supports the investigational theory that there was an effort by the PMO to influence the Senate Report into Senator Duffy. While Senators Tkachuk, LeBreton, and Stewart Olsen have denied such influence, the e-mails and other witness interviews support this theory.

Conclusion

While sufficient evidence does exist to support charges against Mr. Wright, the prospect of obtaining convictions relating to those offences could be limited due to the statutory requirements. The decision by the investigative team is that it is in the public interest to secure convictions on the charges against Senator Duffy. The investigation showed that Mr. Wright cooperated at first instance. By his own admission he was a party in respect to the scheme to gift the $90k. He provided tangible evidence to investigators at his first opportunity, believing that he did nothing wrong. He did not ask for favorable consideration, nor was it offered. He presented it because he believed it would be relevant to the investigation. As set out previously, the importance of the evidence that can be obtained from Nigel Wright as a witness cannot be overstated. In order for the materials (evidence) which Mr. Wright provided to be admitted into court, including e-mails and Senator Duffy's calendar, a witness will be needed to provide testimony of the participants, provide interpretation, context, meaning, and intent behind the various statements made in the e-mails. Without Mr. Wright, there may be evidentiary gaps which would weaken any court case against Senator Duffy. With regard to the calendar received by Mr. Wright after it was sent to him by Senator Duffy, a witness will be needed to testify to explain its existence, relevance, and how it was obtained by PMO and turned over to police. The calendar provides important evidence relating to investigative avenues 1, 2, and 3. Based on these requirements, Mr. Wright is in the best position to provide that evidence and testimony. While Mr. Wright could face some charges for his role in gifting the $90K to Senator Duffy, it is the opinion and decision of the investigating team that it would best serve the public interest for Mr. Wright to remain a witness, compelled to provide testimony relating to the 9 proposed charges against Senator Duffy. In short, Mr. Wright's testimony would greatly assist in attaining the primary objective of this investigation with a view to showing the full scope and extent of Senator Duffy's criminal acts while a sitting senator. The $90k payment from Mr. Wright to Senator Duffy should be seen in the context of one part of a much larger investigation focussed on Senate wrongdoing.

B. Carrese, Supt.
Sensitive & International Investigations
2014-04-14

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Date modified:

2016-08-16