The deadline was set.
In less than 24 hours, Prime Minister Stephen Harper’s top aides were expected to be heading into the weekend with the worst of the Mike Duffy affair behind them.
On the evening of Thursday, Feb. 21, 2013, Mr. Harper’s then chief of staff, Nigel Wright, approved a statement that had been drafted by a small handful of officials in the Prime Minister’s Office.
The plan was for Mr. Duffy, then a high-profile Conservative senator who was in the eye of a media storm, to issue the statement in his name and announce Friday afternoon in Charlottetown that he would repaying his controversial expenses.
All that was needed was Mr. Duffy’s approval.
The frantic back and forth that played out in the run-up to that announcement is now at the heart of the ongoing criminal trial in which Mr. Duffy is defending himself against 31 charges of bribery, fraud and breach of trust.
Mr. Duffy felt that as a PEI senator, the Senate rules entitled him to claim travel-related expenses while in the capital even though he had long owned a home and lived in the Ottawa suburb of Kanata. The Conservatives wanted him to admit that he may have made a mistake and to pay back the expenses, shutting down the controversy.
“Capitulation day” is how Mr. Duffy’s criminal lawyer, Donald Bayne, has repeatedly described Feb. 22, 2013, in court. Over six days of testimony, Mr. Wright insisted that the senator was an active participant.
The testimony, when combined with the detailed chain of e-mails released as evidence in the trial, provide an unprecedented behind-the-scenes look into the Prime Minister’s Office, and the rushed decisions that took place during those 24 hours. According to the defence, the flurry of urgent e-mails and meetings show that Mr. Duffy was forced to take part in “a deliberately deceptive scenario designed to mislead the Canadian public.”
Two years into the Conservatives’ majority government, the PMO was at the height of its power. Its budget had grown to $8-million even though other departments were facing budget cuts. More than $7-million of that went to cover the cost of the office’s 94 staff members, who were responsible for various divisions, including policy development, government appointments and issues management.
The Duffy trial has exposed the degree to which PMO staff manage the Conservative caucus, shaping the words the members say and the decisions they make in parliamentary committees.
The detailed plan approved by Mr. Wright would ultimately unravel, setting the stage for the chief of staff to secretly write a cheque to Mr. Duffy for $90,172.24 a month later. The RCMP and the Crown argue that this amounted to bribery on the part of the senator.
Mr. Harper has long maintained that Mr. Wright is the only government official responsible for that controversial decision. Recent testimony from Mr. Harper’s lawyer at the time, Benjamin Perrin, has raised doubts about this. Mr. Perrin told the court that the Prime Minister’s current chief of staff and then principal secretary, Ray Novak, was also made aware of the payment even though Mr. Novak told the RCMP that he was not.
But the debate around the infamous cheque all date back to what happened on Friday, Feb. 22, 2013.
The night before
“Mike is going to do this (although I don’t consider that final, final until I see an e-mail from his lawyer … ),” Mr. Wright wrote on the evening of Thursday, Feb. 21, 2013, in an e-mail to four senior PMO staff. Mr. Wright had talked directly with Mr. Duffy the previous evening.
Copied on the e-mail were director of issues management Chris Woodcock, director of parliamentary affairs Patrick Rogers, spokesperson Stephen Lecce and Mr. Perrin, the PMO lawyer.
Mr. Perrin would be responsible for negotiating directly with Mr. Duffy’s lawyer at the time, Janice Payne.
Mr. Perrin had only introduced himself by phone to Ms. Payne the day before. He was waiting to hear back on whether she and Mr. Duffy approved of the plan.
The PMO wanted Mr. Duffy to make his announcement Friday afternoon in Charlottetown in time for the local CBC and CTV supper-hour newscasts. Adding pressure to the situation was the fact that CTV did not have a media crew in PEI at the time, meaning that the Conservatives would have to give the network a few hours’ notice so that they could send a camera crew from Moncton.
The PMO staff working out of the Langevin Building in Ottawa were dealing with a senator who was in PEI, meaning that all of the interactions were over the phone or through e-mail.
While Mr. Duffy grew up on the island, he had spent most of his pre-politics journalism career living in Ottawa. The Prime Minister’s decision to appoint Mr. Duffy as a senator from PEI rather than Ontario in December, 2008, raised immediately questions, particularly from islanders.
Shortly after 9 p.m. Thursday, Ms. Payne responded to Mr. Perrin with a list of several new demands from Mr. Duffy. The senator wanted confirmation that his case would be withdrawn from an audit of expenses being conducted by Deloitte and that a Senate committee would state that his expenses were in order. Other requests included written assurances that he meets the constitutional requirements to sit as a senator from PEI, that his legal fees be covered and that Conservative MPs and senators stick to the PMO’s media lines. Mr. Duffy also insisted that he be kept “whole” – meaning that someone else would actually pay back the money.
“This is quite the list of demands,” Mr. Perrin reported back to Mr. Wright that night.
Mr. Wright generally agreed with the senator’s conditions, even though at the time it was not clear how much that would cost. He wrote that the Conservative Party “is open to keeping Mr. Duffy whole since it is clear that any overpayments were innocently received.”
With Mr. Wright’s signoff, Mr. Perrin reached out to Mr. Duffy’s lawyer just after 10 p.m. Ms. Payne wrote back, saying she could speak with him in the morning, as early as he wished.
‘We are good to go from the PM’
Mr. Perrin was up early dealing with work from home even though he had booked Friday as a day off.
He fired off an e-mail to Ms. Payne at 5:14 a.m. to set up a phone call. They would not speak until about three hours later. Ms. Payne left Mr. Perrin with the impression that she and Mr. Duffy were “generally satisfied” with the plan.
Mr. Perrin then took his daughter to a yoga class for two-year-olds, which he described in court as “incredibly cute.”
“I recall the day vividly because I got in quite a bit of trouble from my wife for working so much on a day off,” he told the court.
Like most days in the PMO, staff were juggling several hot files. Mr. Wright was scheduled to take part in a meeting related to the Canada-European Union Comprehensive Economic and Trade Agreement, a potential deal that was a high priority for a government focused on boosting international trade. He was also expected to sit in on the first meeting between Mr. Harper and Kathleen Wynne since she had been sworn in as Premier of Ontario earlier that month.
Later that morning, Mr. Wright made plans to contact Conservative Senator Irving Gerstein, who was in charge of the Conservative fund that would cover Mr. Duffy’s expenses under the plan.
“For its part, the party would not inform anyone,” Mr. Wright reported back at 11:39 a.m. in an e-mail to Mr. Perrin, Mr. Woodcok, Mr. Rogers and Mr. Lecce, which implied that Mr. Duffy should also keep quiet. He stated that the party wanted to cap the cost of Mr. Duffy’s legal fees at $12,000.
He then relayed a decision that would come back to cost Mr. Wright dearly.
“We need an accounting of what Sen. Duffy owes the Senate (we do not need the latter before his statement is rolled out),” he wrote. Mr. Wright had agreed to have the party cover Mr. Duffy’s expenses without knowing the amount.
“I do want to speak to the PM before everything is considered final,” he concluded.
About half an hour later, Mr. Wright updated the same three PMO staff: “We are good to go from the PM once Ben has his confirmation from Payne.”
That e-mail, along with another Mr. Wright wrote on May 14 that “the PM knows, in broad terms only, that I personally assisted Duffy,” would lead to repeated questions as to what exactly Mr. Harper knew about the deal.
However, throughout his six days in the witness box, Mr. Wright supported the Prime Minister’s position that he was never told that Mr. Wright gave Mr. Duffy the money.
‘Ray, I am cooked’
While the PMO was “good to go” with the plan, Mr. Duffy appeared to be having second thoughts. He reached out in an e-mail to Mr. Novak, then Mr. Harper’s principal secretary, who would later replace Mr. Wright as chief of staff. No one else was copied on the e-mail.
Unlike Mr. Wright, Mr. Novak has worked closely with Mr. Harper for virtually all of his professional life.
The desperate tone of Mr. Duffy’s e-mail was at odds with the reports the PMO was receiving from Mr. Duffy’s lawyer that the plan was moving ahead and the senator was on board.
“Ray. I am cooked. I did nothing wrong,” Mr. Duffy wrote at 12:40 p.m. The senator argued that they should be sticking with the Deloitte audit, rather than repaying now in the hope of having his case dropped by the auditors.
“This is nuts and is very hard for me to swallow,” he continued. “I swing between the team player mode and do anything for pmsh [Prime Minister Stephen Harper] and it is time for me to say phack it. Let deloitte decide.”
By this time Mr. Lecce, a PMO spokesman, was getting anxious.
“In order to get into the regional broadcasts tonight (6PM AST) – we will need to give a heads-up to media ASAP, as the time zone works against us,” he wrote to his colleagues just before 1 p.m.
Then, a new holdup. Mr. Duffy’s lawyer wanted the deal in writing.
“I explained that was not happening,” Mr. Perrin told Mr. Wright and three others in the PMO.
Mr. Wright agreed and said the senator “can have my word if he wants that.”
The plan was speeding ahead. Last-minute negotiations continued between the lawyers over details, but the PMO and Mr. Duffy’s team appeared to be on the same page on the main goal.
And yet, on the side, Mr. Novak and Mr. Duffy continued to exchange e-mails. Mr. Wright would later testify that he was not aware of that side discussion.
Via e-mail, Mr. Novak urged Mr. Duffy to go ahead with the plan. “We can put a [communications] strategy around repayment that I think will work,” he wrote at 1:09 p.m.. “Best to seize the initiative and not wait for audit.”
Chris Woodcock and Mr. Lecce of the PMO reached out to Mr. Duffy to prepare him for his media interviews, which would start with the local CBC station’s 6 p.m. news program Compass, hosted by Bruce Rainnie.
The last-ditch plea
Shortly before the interview would air, Mr. Duffy continued to make his case with Mr. Novak.
“Ray. I can’t admit wrong doing,” he wrote at 4:28 p.m. in what Mr. Duffy’s lawyer would later describe as a last-ditch plea. “The Senate has to meet me half way.”
The original plan would go ahead. The CBC’s national news network went to air with what they described as exclusive, breaking news. The network reported that Mr. Duffy contacted the CBC, volunteering for a live interview in its Charlottetown studio. The senator was announcing that he would pay back the money. The interview was quickly aired nationally.
Dressed in a navy suit with a striped tie, Mr. Duffy appeared on set with the anchor. While the senator’s eyes appeared slightly red and tired, he quickly slipped into the on-air style he had honed over years as a television journalist, speaking calmly and peppering his message with winks and smiles.
“It’s become a major distraction so my wife and I discussed it and we decided that in order to turn the page and put all of this behind us, we are going to voluntarily pay back my living expenses related to the house we have in Ottawa,” he said.
Minutes after the interview, PMO spokesman Andrew MacDougall sent Mr. Duffy a note of encouragement.
From Ottawa, the PMO team was watching it all unfold in real time. Not all of the team, though. Mr. Perrin followed through with a massage appointment he had booked for his supposed day off.
Mr. Lecce wrote to his colleagues, urging them to turn on the CTV News Channel to watch Mr. Duffy’s next interview.
Mr. Wright responded with a single quote from the interview. The line had not been among the many carefully crafted sentences that were pre-approved by the PMO. “I don’t think I owe this money.”
Clearly the problem was not over. The party balked at paying the rising cost of Mr. Duffy’s expenses and the senator’s resistance to paying the tab himself would ultimately lead Mr. Wright, a multimillionaire, to quietly give Mr. Duffy more than $90,000.
Efforts to have Mr. Duffy dropped from the Deloitte audit failed. The Duffy file would continue to preoccupy the small team of senior aides in the PMO for weeks as they tried to stick-handle the file through the Senate.
During his extensive testimony, Mr. Wright acknowledged that he did not fully grasp the implications of some of the decisions he had made while managing the controversy. But his early assessment of the situation, written in a Feb. 7, 2013, e-mail, has since proved accurate.
“Let this small group be under no illusion,” he wrote to senior PMO aides Mr. Novak, Mr. MacDougall, Mr. Woodcock and Joanne McNamara, who was then deputy chief of staff. “I think that this is going to end badly.”