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How Harper became embroiled in the Senate scandal Add to ...

Stephen Harper’s Conservative government has been consumed by the Senate expenses scandal, which has overshadowed a major trade agreement with Europe, consigned a throne speech to political oblivion and undermined what was supposed to be this weekend’s feel-good national convention in Calgary.

Few people despise the Senate more than Stephen Harper. And the Prime Minister’s contempt for the Red Chamber was on full display this week as opposition MPs grilled him about the unfolding scandal. But something was wrong. He stumbled. A politician famous for his managerial competence – though also for his secretive and controlling ways – repeatedly kept changing his story.

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One day, “very few” people in his office knew that former chief of staff Nigel Wright had cut a personal cheque to rescue Senator Mike Duffy when he claimed he couldn’t repay his questionable expense claims. Before, Mr. Wright had acted alone. Then the Prime Minister seemed to suggest that Mr. Wright had not resigned but had in fact been fired. Strangest of all, Mr. Harper turned on his former confidant, accusing Mr. Wright of “deception.”

How did a Prime Minister credited with being such a master political tactician get into such a mess? How, if at all, will Mr. Harper get himself out of it?

The Globe and Mail talked to people inside the government, and close to it, about how Mr. Harper has handled the growing Senate scandal. What emerges is a picture of turmoil in the Prime Minister’s Office following Mr. Wright’s resignation, of a government moving to contain one blow after another, and of a growing resolve within the government that the only way out may be to hold a referendum on the Senate’s abolition.

A problem at the Centre

Such a referendum would be a fitting resolution to a political crusade that Mr. Harper has waged for decades. As far back as the 1980s, when he was a policy adviser for the new Reform Party, Mr. Harper publicly demanded that the Senate be either reformed or abolished. As Prime Minister, he tried to get several bills through Parliament that would have seen senators elected to fixed terms and held off making appointments while waiting for those bills to pass. But opposition politicians and Tory senators blocked them all. Indeed, a recurring element of this ongoing affair has been the resistance of Conservative senators who refuse to be dictated to by the Centre, as the Prime Minister’s Office is called.

Frustrated, Mr. Harper appointed a flurry of senators to fill a raft of vacancies, starting in late 2008. Many of those appointments were highly partisan. Two of the most prominent were former broadcasters Mike Duffy and Pamela Wallin.

The Conservative brand is the Stephen Harper brand – the two are inseparable. But Mike Duffy and Pamela Wallin have brands of their own, built on decades in the public eye. The party used their popularity to generate support and donations through public appearances.

That is why, when the first questions about Mr. Duffy’s residency began to surface in December of 2012, Mr. Wright took charge of the file, writing an e-mail to Mr. Duffy discounting a news story on his housing expense claims as a “smear” and saying he believed the senator “complied with all the applicable rules.”

Had the accused senators been less well known, their fate would have been left to the Senate leadership. But with Mr. Duffy and Ms. Wallin at the centre of the storm, the cases were too big to ignore, especially when allegations reached the boiling point in February that the two, along with another Harper appointee, Patrick Brazeau, and then-Liberal senator Mac Harb, had improperly billed taxpayers for many thousands of dollars in living expenses. At first, the Prime Minister’s advisers tried to protect their star senators. When it became clear that there was strong evidence of improper charges, the government tried to distance itself from the now-discredited politicians. But, as one government official put it, “it was like trying to hold a bowl of Jell-O in your hands without the bowl.”

As winter turned to spring, the Prime Minister’s advisers, according to people close to the situation, became increasingly convinced that they had to lay this issue to rest – and that Mr. Harper had to be kept far from the affair. For that reason, Mr. Wright decided to act on his own by paying Mr. Duffy’s expenses, to the tune of $90,000, not realizing that his actions placed his boss in political peril.

Sources who spoke to The Globe discounted Mr. Duffy’s allegation, made this week, that officials in the PMO had coached him to lie to the public about where the money had come from. But they acknowledge that Mr. Wright had consulted others in the office before deciding to write the cheque. Mr. Harper, they insist, was kept in the dark for his own political protection. According to Mr. Duffy, he met privately with Mr. Harper and Mr. Wright – “just the three of us” – after a caucus meeting on Feb. 13 and insisted he had not broken any rules. The allegation is the first time the three men have been placed alone in the same room in connection with the Senate affair.

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