Mike Duffy's lawyer says $90K cheque was a deal with PMO

Senator Mike Duffy's living expenses were "cleared from Day 1" by then Senate government leader Marjory LeBreton's office, and when they later became controversial, Duffy was pressured to take a deal from the Prime Minister's Office, his lawyer told a news conference Monday.

Lawyer Donald Bayne on Monday read from emails between Duffy and LeBreton's office as well as Prime Minister Stephen Harper's former chief of staff Nigel Wright and others to support his claim that Duffy did not knowingly break Senate rules.

Bayne said that when the growing scandal became politically explosive Duffy was "in effect" told by the PMO not to co-operate with auditors, Bayne said.

Bayne said the PMO told Duffy "the Tory base" was offended by his residency claims and he would have to repay money for all four years of secondary housing claims for his Ottawa home. Duffy's objections to repaying money he did not believe he owed, said Bayne, were greeted by "threats and pressure from the PMO."

One of those threats, said Bayne, was that senators David Tkachuk and Carolyn Stewart Olsen, who held the majority on a Senate subcommittee, would declare Duffy's Senate appointment constitutionally invalid if he refused to co-operate with accepting a payment from Nigel Wright.

"The PMO decided they wanted to sweep a political embarrassment to their Tory base under the rug, and they threatened Senator Duffy with wholly unconstitutional and illegal procedures of throwing him out of the Senate without a hearing if he failed to go along with it," Bayne said.

The PMO, Bayne said, came up with a "scenario" and communication lines for Duffy to use with the media about how to explain why he was paying back the expense money. "It was a political tactic forced on him by the PMO," Bayne said.

Working out a deal

Duffy's lawyer at the time and PMO lawyers worked out a deal, Bayne related, about terms under which Duffy would accept the $90,000 payment. One of the terms was that Duffy would not be removed from the Senate.

And yet, as time went on, the tone changed, said Bayne. "The threat seems obvious: you take the dive or this subcommittee will throw you out on the residency issue before you've had any kind of hearing."

As partial evidence of a deal between Duffy and the PMO, Bayne read a a Feb. 20, 2013, email from Duffy to his lawyer that had been forwarded to Chris Woodcock, a staffer in the PMO. The title of the email was, "Nigel called last night." The email related that Nigel "was expansive." and that he told Duffy he had been working on a scenario and lines for Duffy, and cash for a repayment.

When asked by a reporter if an email from Duffy might be considered hearsay, and not evidence, Bayne said a court would take into account that Duffy would be unlikely to lie to his own lawyer.

Wright, who resigned as Harper's top aide over the scandal, told CBC News he had no comment on Bayne's remarks.

Bayne did not mention that part of the deal he claimed was brokered by the PMO might have been a promise for a Senate report "to go easy on Duffy" after the independent Deloitte audit was made public. The Conservative majority on a Senate subcommittee altered its followup report to be less critical of Duffy, but it was later restored to its original version.

At first, no problem with Duffy's expenses

Bayne quoted Tkachuk, the Conservative senator, telling the Ottawa Citizen in February he saw no problem with Duffy claiming Ottawa housing expenses because of having a primary residence in P.E.I.  The same month, Tkachuk told CBC News the same thing, explaining Duffy visited P.E.I. frequently and there was nothing untoward about claiming the island as his primary home.

"Whether he closes the place up for the winter.… If I was Mike I wouldn't be travelling back and forth either, because his heart condition is not that great. I wouldn't be getting on a plane, trying to get to Charlottetown every week," he said eight months ago.

However, reached in Saskatchewan on Monday by CBC, Tkachuk made a distinction about Duffy's residency. He said it was true Duffy had clarified with LeBreton four years ago that he was a bona fide P.E.I. resident, but nonetheless did not qualify to claim living expenses in Ottawa, which Tkachuk called "a different matter entirely."

The prime minister was asked in question period Monday if the PMO had prepared communications lines for Duffy to explain why he was repaying expense money. Harper, in the first question period he's attended this session, said all MPs and senators are expected to obey the rules "in letter and in spirit."

Bayne would not release the emails to the media, but said they were just "the tip of the iceberg" of evidence that will come out in the event Duffy is called to defend himself in court. "I have those emails," he continued. "The RCMP have most of those emails."

He added the Senate motion to cut Duffy's pay was a "severe punitive measure" that would deprive him of "his sole source of income" and of the finances needed to fight his case.

On Thursday, the Senate gave notice of a motion that would cut the pay of senators Duffy, Patrick Brazeau and Pamela Wallin, and bar them from the Senate chamber and Senate committee hearings. The motion, which accuses the senators of "gross negligence," is to be debated in the Senate on Tuesday and put to a vote.

Duffy, Wallin and Brazeau were found by the Senate to have inappropriately claimed expense money following an independent audit of their travel and housing claims. All three have either voluntarily or have been forced to repay money to the Senate.

In Duffy's case, $90,000 was repaid even before the findings of the independent audit were made public by means of a cheque written by Wright.

Harper has maintained he knew nothing of the payment until May 15.

Wright, who resigned as Harper's top aide, handed over a binder full of documents, including emails, to the RCMP, court documents reveal.

A lawyer for Wallin has complained about the Senate's intention to suspend her and cut her pay without any evidence that she committed gross negligence.

"They're [all senators who vote on the motion] constrained by the sense of due process under the charter, unless they say they don't care about due process and they don't care about the Charter of Rights, and that they can do what they want," said Terrence O'Sullivan on Friday.

However, Rob Walsh, the former top legal adviser to the House of Commons, said in an interview that the Senate is not bound by considerations such as due process. "Due process, the right to hear the other side, the charter — none of that applies to parliamentary proceedings. But lawyers' first instincts are to invoke these principles they're accustomed to in legal proceedings."

Walsh believes the Senate does not have the power to cut a senator's sessional allowance, or pay, which he says is protected by the Parliament of Canada Act.