A senior official at the firm reviewing Senator Mike Duffy’s expenses intervened in the process by calling a colleague for information about the continuing audit after speaking with a key Conservative Party figure.
Deloitte partner Michael Runia made the call to his co-worker, auditor Gary Timm, in March after speaking with Conservative Senator and fundraising chair Irving Gerstein, who knew Mr. Runia because the firm had done work for the party.
The call to Mr. Timm was revealed for the first time on Thursday at the Senate’s internal economy committee, which hired Deloitte. The firm insists the call didn’t compromise the integrity of the audit.
The revelation raises new questions about what role those close to Prime Minister Stephen Harper played in trying to end questions over Mr. Duffy’s faulty expense claims, which were ultimately reimbursed by Nigel Wright when he was Mr. Harper’s chief of staff. That payment, which the Prime Minister says he did not know about until it was reported in the media, has triggered an RCMP investigation of Mr. Duffy and Mr. Wright.
Eyes are now turning to Mr. Gerstein, a powerful party figure who chairs the Conservative fundraising efforts and whom Mr. Harper appointed to the Senate.
While pinning the blame squarely on Mr. Wright and Mr. Duffy, Mr. Harper has stood by his fundraiser, sidestepping questions about the role Mr. Gerstein played.
The Deloitte audits of the expenses of Mr. Duffy, then-Conservative Senators Patrick Brazeau and Pamela Wallin, and Mac Harb, a former Liberal senator, were ordered by the internal economy committee.
In Mr. Duffy’s case, he had been claiming money that is available to senators who live more than 100 kilometres from Ottawa, even though he is a long-time resident of the city. Deloitte was asked to determine the location of Mr. Duffy’s primary residence and to decide whether the expense claims were appropriate.
But Mr. Duffy’s lawyer insisted that the audit be stopped before her client would agree to pay back the expenses – even though the money was not coming from his own pocket.
RCMP court documents made public last week include e-mails from Mr. Wright who was trying to quietly resolve the situation. In one of them, Mr. Wright says he asked Mr. Gerstein to “work through senior contacts” at Deloitte to see whether a commitment by Mr. Duffy to repay his inappropriate expense claims would mean the audit was no longer needed.
Mr. Gerstein told the police he called Mr. Runia.
Mr. Runia then, apparently, called Mr. Timm. “He wanted to know, if Senator Duffy were to repay, how much would that be,” Mr. Timm told the committee. “I told him I can’t divulge or disclose any confidential information.”
Mr. Runia was not invited to the Thursday meeting and the Conservatives on the committee voted against a Liberal motion to have him appear at a future date. But the Liberals later introduced a motion in the Senate chamber to have Mr. Runia called to testify. That will be debated next week.
Alan Stewart, another Deloitte auditor who did testify before committee on Thursday, said he found it “troubling” that Patrick Rogers, the manager of parliamentary affairs for the Prime Minister, appeared to know what Deloitte’s findings would be more than a month before the audit report was released.
On March 21, Mr. Rogers wrote to Mr. Wright saying “the auditors can’t reach a conclusion on residency,” a prediction that ultimately proved correct.
While staff in the PMO would have no reason to know what the audit would find, Mr. Stewart said Deloitte provided verbal briefings to two Senate committees on Feb. 28 at which the “likely conclusion” of the audit was disclosed.
One committee, which reviewed the expenses of Mr. Duffy and Ms. Wallin, was composed of Conservative Senators David Tkachuk and Carolyn Stewart Olsen and Liberal Senator George Furey. The other, which reviewed the expenses of Mr. Brazeau and Mr. Harb, was composed of Conservative Senators Gerald Comeau and Elizabeth Marshall and Liberal Senator Larry Campbell.
Liberal Senator George Baker said it would have been completely inappropriate for any of those senators to reveal what the auditors had disclosed in the February briefings. “It would have been a violation of the rules,” said Mr. Baker.
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