PMO sought, obtained details on confidential audit: Duffy trial

The word 'confidential’ was splashed across the work mandate of the independent audit into Mike Duffy’s Senate expenses, with explicit terms that limited the circle of access.

OTTAWA — The word ‘confidential’ was splashed across the work mandate of the independent audit into Mike Duffy’s Senate expenses, with explicit terms that limited the circle of access.

And yet information still found its way into Stephen Harper’s office in March 2013, via political figures who had no role in the Senate-commissioned audit.

Duffy’s fraud, breach of trust and bribery trial heard Tuesday about how the PMO sought and obtained details on the firm Deloitte’s examination of Duffy’s expenses.

Defence lawyer Donald Bayne spent hours on the Deloitte issue in an aggressive cross-examination of Harper’s former chief of staff, Nigel Wright.

It’s all part of a defence strategy that seeks to tear down the argument that Duffy was responsible for a scheme that would see someone else repay his $90,000 in living and travel expenses.

“This is conspiratorial collective action that your group is taking, to have Deloitte write a report that says their work is done,” Bayne said during one testy exchange with Wright.

“You’re trying secretly to interfere with and approach secretly a strictly confidential audit, and you’re doing it with somebody who isn’t the client and has no connection to this process.”

Why is the Deloitte audit so significant? The trial has heard it was a critical component of the deal struck between the PMO and Duffy to have him admit to the public he had made a mistake claiming expenses for his home in suburban Ottawa. (Another part the deal would ensure Duffy never had to be out of pocket for the repayment.)

Wright has said that Sen. David Tkachuk, the former head of the powerful Senate internal economy committee, was the first to suggest that if Duffy repaid his expenses, he could be withdrawn from the Deloitte audit that was underway in Feb. 2013.

Emails filed with the court as evidence show Wright and other senior aides in the PMO discussing how Sen. Irving Gerstein was going to speak to a contact at Deloitte about the audit. That contact was company partner Michael Runia.

The Conservative Party is also a client of Deloitte.

“I have been on the phone constantly with Gerstein who has been trying to arrange the necessary commitments from Deloitte…,” parliamentary affairs manager Patrick Rogers wrote.

And in another email, Rogers writes. “The Senator will call back once we have Deloitte locked in.”

But Wright has disagreed emphatically with the characterization that he meddled or wanted to meddle in Deloitte’s audit of Duffy’s expenses.

Wright said he simply wanted the Senate committee to change the terms of the Deloitte audit to remove Duffy, since he says Duffy’s repayment of expenses would render the study moot.

He says when he couldn’t ascertain whether Tkachuk was making the plan happen, he dispatched Gerstein to approach his Deloitte contacts to see if the firm and Tkachuk were indeed talking.

As Wright put it, he wanted Gerstein to “close the loop between the contractor and the client here.”

Bayne was having none of this.

A subsequent PMO email lists information that Gerstein has apparently gleaned from his contact at Deloitte.

“Just heard from Gerstein,” Rogers writes. “Here’s the latest and most useful information yet from Deloitte. Any repayments will not change Deloitte’s conclusions because they were asked to opine on residency. However, they can’t reach a conclusion on residency because Duffy’s lawyer has not provided them anything.”

“Sir, your career is in business, there are agreements that are negotiated, contracts that are negotiated,” Bayne put to Wright. “If discussions are strictly confidential, they’re not to be leaked. As a lawyer, you know what strictly confidential means. You know what the words mean.”

“I know what their common sense meaning is, yes,” Wright responded.

After receiving the information about Deloitte through Gerstein, Duffy is counselled to no longer co-operate with the audit.

An auditor from Deloitte who appeared before the internal economy committee in 2013 denied anyone close to the audit divulged any information.

“He wanted to know if Sen. Duffy were to repay (his expenses), how much would it amount to,” Gary Timm said of Runia.

“I said I couldn’t tell him, I couldn’t disclose any confidential information to him — that was the gist of the conversation.”

The Canadian Press asked Gerstein this past June to explain his role in the Deloitte matter, but the senator did not respond to the question. He told the RCMP in 2013 that he had indeed contacted Runia, and that Runia told him that the Duffy audit would continue despite Duffy’s repayment.

Runia echoed Gerstein’s version in his own discussion with police.

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