How the RCMP mapped the Wright-Duffy money trail

RCMP investigators have already pieced together an almost-complete picture of how $90,000 from the prime minister's former chief of staff ended up in Senator Mike Duffy's bank account. But they want more information to finish the narrative.

The money from Nigel Wright's personal resources was used to repay inappropriate housing and living expenses filed by Duffy over a four-year period.

The origin, purpose, deliverance and acceptance of that $90,000 could result in charges against Duffy and Wright. Court documents released this week show both men are being investigated by the Mounties for bribery, fraud and breach of trust. No charges have been laid and the allegations have not been proven in court.

In an affidavit filed in an Ottawa court Wednesday, RCMP Cpl. Greg Horton laid out how the money travelled from Wright to Duffy.

Although Duffy owned his Ottawa suburban home before he was appointed to the Senate, he declared that his P.E.I. winterized cottage was his primary residence, allowing him to charge secondary expenses for his house in the nation's capital.

The money route

Once it was established that Duffy had to repay his expenses, he took out a $91,600 mortgage loan from the Royal Bank. In his affidavit, Horton says, "I believe this loan was an effort by Senator Duffy to create a paper trail so he could show that he obtained the loan to repay the money, if ever asked."

Duffy would later tell reporters he voluntarily paid back the inappropriate expenses on his own, although he didn't believe he had done anything wrong. "It was the right thing to do," he said, explaining he'd taken out a bank loan to make the repayment

On the same day Duffy obtained the mortgage loan, he took $80,000 from his private account and put it into a line of credit he said was being used for renovating his cottage.

According to Horton, "He now had $91,600 from a mortgage loan, so having no need for it for the repayment, he put $80,000 of that money on his line of credit."

The officer believes Duffy knew a bank draft from Wright was on its way.

Three days later, on March 25, Wright arranged for a bank draft worth $90,172.24 to be delivered to the office of Janice Payne, Duffy's lawyer. The figure was the exact amount Senate administration staff calculated Duffy owed in inappropriately claimed expenses.

On March 26, a branch-to-branch transfer put $90,172.24 into Duffy's private RBC account.

On that same day, a personal cheque from Duffy for $90,172.24 made out to the Receiver General was delivered to the Senate.

Horton says in the affidavit that he believes this was Nigel Wright's money. One purpose of the 81-page affidavit is to persuade a judge to allow him access to bank records showing who transferred the money into Duffy's account, and from where.

That information would complete the picture of a complex routing of money designed to hide the source of the funds, and a plan to make it seem Duffy had used his own resources to repay his expenses.

Why Duffy's Senate debt jumped from $32K to $90K

A question that rises out of the RCMP documents is how the amount of money Duffy owed the Senate for inappropriate expenses escalated from $32,000, a figure Wright, in early February, initially thought was the correct amount — which the Conservative Party was apparently willing to pay — to $90,000.

The party balked at the higher figure, which Wright wound up covering since Duffy either couldn't, or wouldn't.

The smaller figure may have come from a Deloitte audit on Duffy's expenses, conducted in February, that concluded the P.E.I. senator charged about $34,000 in living expenses for the 18-month period the independent accounting firm was tasked to examine.

The audit shows Duffy collected a private accommodation allowance for his house in Kanata, an Ottawa suburb, because presumably he didn't have a mortgage.

The private accommodation allowance is $28 per day, amounting to about $10,000 a year. Had Duffy been able to show Senate administration he had a mortgage or a lease, he could have charged double that amount

But the the allowance for per diems or meals is much higher — $86 for every day an out-of-town senator is in Ottawa on Senate business.

Wright, an independently wealthy man who never personally charged expenses, didn't seem aware Duffy was charging per diems. When he found out, he told the RCMP, he was incensed that Duffy was getting paid for meals he ate in his own house in Ottawa.

Once the Senate looked back at the entire four years of Duffy's Senate tenure, his ineligible private accommodation costs and per diems jumped to $80,000 with another $10,000 for interest, as well as the payback of claims Duffy said he mistakenly made while on vacation in Florida.

Wright ended up reimbursing the entire amount out of his own pocket, saying in an email obtained by the RCMP, "I am beyond furious ... the money will be repaid."