Canadian Senate expenses scandal

The Canadian Senate expenses scandal was a controversy concerning the expense claims of certain Canadian senators which began in late 2012. Senators Patrick Brazeau, Mike Duffy, Mac Harb, and Pamela Wallin claimed travel and living allowance expenses from the Senate. Deloitte LLP was retained to provide the Senate with an independent examination of the expense claims. Duffy -- whose expenses were later found by a Superior Court of Ontario judge to be legitimate -- Harb, and Wallin repaid housing expenses and Harb retired a few months later. In November 2013, Brazeau, Duffy, and Wallin were suspended from the Senate without pay. Brazeau, Duffy, and Harb were criminally charged. On April 21, 2016 Duffy was acquitted on all charges. Charges against Harb were withdrawn and no charges were laid against Wallin.

As a result, the Auditor General of Canada examined expense claims made by all the other 116 senators and former senators over a two-year period. In a June 2015 report, the Auditor General identified thirty senators whose claims were inappropriate, and of these, recommended that nine cases be referred for police investigation. No charges were laid in those cases. Fourteen of these senators opted for binding arbitration by former Supreme Court of Canada Justice Ian Binnie, and his report was issued on March 21, 2016.

Overview

The investigation of senator expenses began in November 2012 with the living expense claims of Patrick Brazeau. and the travel expense claims of Pamela Wallin. By December 6, 2012, the Senate investigation was expanded to include the living expenses of Mac Harb and the housing expenses of Mike Duffy. On January 3, 2013, the Senate formally retained Deloitte LLP to review the claims of Brazeau, Harb and Wallin. In February 2013, the Deloitte retainer was expanded to include Mike Duffy's living expense claims.

In March 2013, and before the Deloitte audit was complete, Duffy repaid $90,172 for the living expenses he had claimed. It was later learned in May 2013 through the media that the source of this money was a personal cheque provided by Nigel Wright, who was then Chief of Staff in the Prime Minister's Office.

On May 9, 2013, the Senate released reports about the expenses of Brazeau, Duffy and Harb, along with Deloitte's reports. It acknowledged Deloitte's finding that the criteria for determining a senator's primary residence was lacking. However, the intent and purpose of Senate policies for reimbursement of living expenses were "amply clear" and so Brazeau and Harb were ordered to repay living expenses. On August 13, 2013, the Senate released Deloitte's report on the expenses of Wallin and she was ordered to repay travel expenses. On May 29, 2013 the Senate issued a report amending the May 9 one, and recommending that Duffy's case be referred to "the proper authorities."

Patrick Brazeau

Senate Investigation

The Senate's investigation into the accuracy of Brazeau's declaration that his primary residence was in Maniwaki, Quebec began as a result of media reports. Based on the finding by auditors that only 10% of Brazeau's time spent was in Maniwaki, the Senate ruled that his "level of presence" did not support his primary residence declaration. Brazeau was ordered to repay a total of $48,745.

Expulsion from caucus

Brazeau was expelled from the Conservative caucus on February 7, 2013 over sexual assault allegations that were later dropped.

Criminal charges

On February 4, 2014 the RCMP announced that Brazeau was charged in relation to his living expenses with one count of fraud under s. 380 of the Criminal Code and one of breach of trust by a public officer under s. 122. On July 13, 2016, Crown Prosecutors withdrew the criminal charges against Brazeau, citing "no reasonable prospect of conviction" and he returned to the Senate.

Mac Harb

Senate investigation

Due to media reports regarding Harb's living expenses, the Senate began its investigation on December 6, 2012. The period of review was April 2011 to September 30, 2012 in keeping with the concurrent review of Brazeau's expenses which had been underway since November 22, 2012. The Senate chose not to conduct an internal review of Harb's expenses due to "experience in conducting one claims review internally", and so Deloitte was retained on January 3, 2013.

Harb's declarations of primary residence were Cobden and later Westmeath, Ontario. Deloitte was not able to assess the status of these declarations because the Senate regulations and guidelines did not contain criteria for determining primary residence. Deloitte was able to confirm that Harb spent about 62% of his time in Ottawa and about 21% at the primary residence location. He did not meet three of the four "indicators" of primary residence (driver's licence, provincial health card and provincial tax return) and did not provide sufficient information as to voting location.

Repayment

Based on the finding that only 21% of Harb's time was spent at Westmeath, his "level of presence" did not support his primary residence declaration, and the Senate ordered that he repay expenses from April 2011 to date of $51,482, and that an internal investigation take place for the period prior to April 2011. Harb repaid this amount under protest and commenced action for judicial review of the Senate order. On August 26, 2013, he announced that he had repaid a further amount of $180,166 and was dropping the judicial review application. The total repaid inclusive of interest was $231,649 for living expenses dating back to 2005.

Retirement from Senate

Along with the announcement of repayment back to 2005, Harb announced his retirement from the Senate. Because he had been an MP for Ottawa for 15 years prior to his Senate appointment, he was eligible for a fully indexed parliamentary pension of $122,989 per year.

Criminal charges

On February 4, 2014, the RCMP announced that Harb was charged in relation to his living expenses with one count of fraud under s. 380 of the Criminal Code and one count of breach of trust by a public officer under s. 122.

Harb was scheduled go to court on August 10, 2015 His trial was postponed into 2016 because the Duffy trial was taking longer than expected. A month after Duffy was found not guilty, the charges against Harb were dropped because the Crown did not see a reasonable prospect of conviction.

Mike Duffy

Senate investigation

Senate Administration was asked to provide a report of Duffy's travel patterns between PEI and Ottawa. Because this travel summary "raised concerns", on February 14, 2013, the Senate expanded Deloitte's review of expense claims to include Duffy's living expenses. Deloitte was not able to assess the status of Duffy's declaration of primary residence in Cavendish, PEI because the Senate regulations and guidelines did not include criteria for determining a senator's primary residence. Deloitte was, however, able to confirm that Duffy spent about 54% of his time in Ottawa and about 30% in PEI.

Repayment using funds from Nigel Wright

On February 22, 2013, Duffy wrote to the Chair of the Senate Standing Committee saying that he "may have been mistaken" when filling out the Senate forms, that he wanted to "repay the housing allowance" and requesting the amount of this. On February 27, 2013, Duffy was advised that the amount owing inclusive of interest was $90,172. Repayment was made by cheque dated March 25, 2013 drawn on Duffy's account. On April 19, 2013, Duffy and the Senate separately announced that Duffy had repaid. In his later trial, Duffy successfully argues that he had been pressured by the Prime Minister's Office into making a false admission of submitting improper expenses. In his verdict, Ontario Superior Court Justice Charles Vaillancourt agreed with Duffy that the housing expenses were legitimate.

The source of the $90,172 was by personal cheque from Nigel Wright who was then Chief of Staff in the PMO. The payment was made by bank draft to Duffy's lawyer dated March 25, 2013. T

On May 19, 2013, Wright announced that he had resigned from the PMO. On May 22, 2013, Harper denied knowledge of the cheque. Harper's legal adviser also denied knowledge of the cheque.

RCMP investigation

The RCMP started its investigation in March 2013.

On June 6, 2013, the Royal Canadian Mounted Police (RCMP) filed documents with the courts, revealing that three senior members of the Prime Minister's Office and another Conservative senator, Irving Gerstein, knew about the transfer of Wright's funds. According to the documents, the Conservative Party of Canada initially intended to pay $30,000 for Duffy to repay his expenses before they learned the full amount, and that Duffy was being investigated over three separate allegations of fraud. On April 15, 2014, the RCMP announced that they had found "no ground for criminal charges" against Wright and dropped their investigation into the matter, returning it to the federal Ethics Commissioner.

Criminal charges and exoneration

On July 17, 2014, the RCMP announced that it had laid 31 criminal charges against Duffy. He pleaded not guilty to all charges. Charles Vaillancourt, who was the presiding judge in the case, found Duffy not guilty on all charges, noting the expenses had been justified and properly incurred. Duffy has filed a lawsuit against the Senate and the RCMP for reckless prosecution.

Pamela Wallin

Senate Investigation

Wallin's travel expense claims came under investigation in November 2012 because she had an "unusual travel pattern". When travelling between her declared primary residence in Saskatchewan and Ottawa, Wallin often stopped over in Toronto, and was claiming the Toronto leg as part of her expenses. A senator may claim travel expenses only if parliamentary business is being conducted at the travel destination.

Preliminary findings indicated "a pattern of claiming Senate expenses on personal or other business unrelated to the Senate, including boards she sits on." Wallin earned approximately $1 million in stock options and fees while on corporate boards since her appointment as senator. A Postmedia News analysis indicated Wallin was ranked second highest in overall spending at $369,593 behind recently retired Conservative Senator Gerry St. Germain, who spent $378,292 during the same period.

Deloitte determined that travel claims totaling $390,182 were appropriate under Senate practice, $121,348 were not appropriate and should be reimbursed, and $20,978 were questionable and subject to interpretation by the Senate Steering Committee.

Although Wallin did not meet two of the four "indicators" of primary residence (provincial health card and tax return), and had not provided sufficient information as to voting location, Deloitte concluded that her primary residence, as declared, was in Saskatchewan. This was based on travel pattern, no privately owned property in Ottawa for a significant period of time, and time in Ottawa being almost exclusively for Senate business.

Repayment

Wallin reimbursed the Senate $38,369 following her own review, and an additional $114,538 inclusive of interest in September 2013.

Senator Wallin delivered a speech in the Senate, where she condemned the body for ignoring the rule of law:

"Why is the Senate acting as accuser, judge, jury, and executioner before I have had a day in court? That's exactly why this whole process [is] flawed. If this chamber can take this extreme action with regard to a sitting senator, imagine what it can do to an ordinary citizen who crosses the government of the day. ... The issue is no longer about expenses, or audits, or transparency, or accountability, or even the reputation of this chamber — it's about an abuse of power. ... They were targeted leaks, many of them incorrect, designed to cast my conduct in the worst possible light. They were personal and vindictive, and they violated the rules of this place. ... The government [put] the sentencing before the trial..."

See also

• List of Canadian political scandals
• United Kingdom parliamentary expenses scandal