The Conservative Party’s chief fundraiser broke his silence on the Wright-Duffy affair, telling a national Tory convention that he had adamantly refused to dip into donation revenue to reimburse the PEI senator’s questionable $90,000 expenses.
Irving Gerstein, an appointed Tory senator, has until now remained out of the spotlight on the Senate expense scandal.
His comments contradict evidence gathered by RCMP investigators who wrote in a July affidavit that the Conservative Party was in fact going to bail out Senator Mike Duffy but only changed its mind after learning the cost was $90,000 rather than $32,000.
He prefaced a scheduled address on party finances Saturday afternoon with comment on Nigel Wright, the former chief of staff to the Prime Minister’s Office who quit his post after it was revealed he’d dipped into personal wealth to reimburse taxpayers for nearly $100,000 of questionable expenses claimed by Mr. Duffy.
“Let me clarify two issues,” Mr. Gerstein told the assembled Tories in Calgary.
“First, I made it absolutely clear to Nigel Wright that the CFC [Conservative Fund Canada] would not pay for Senator Mike Duffy’s disputed expenses,” the Ontario senator said.
“And it never did.”
Mr. Gerstein didn’t comment on RCMP allegations that said the party had originally planned to repay Mr. Duffy’s expenses.
“The Conservative Party was initially going to repay the money for Duffy, from a Conservative fund, when it was believed the amount he owed was approximately $32,000. The fund is controlled by Senator Gerstein,” the Mounties said in court documents, citing discussions with Peter Mantas and Patrick McCann, lawyers for Mr. Wright.
“When it was realized that the cost was actually $90,000, it was too much money to ask the Conservative Party to cover,” the RCMP said. “Wright then offered to cover the cost for Duffy, believing it was the proper ethical decision that taxpayers not be out that amount of money.”
Also at the convention, Mr. Gerstein defended his decision to use the Conservative warchest to cover some of Senator Duffy's legal fees, insisting it was standard protocol.
“At the request of Nigel Wright, the Fund did agree to pay legal fees limited to a maximum $12,000 plus HST, because at the time Senator Duffy was a member of the Conservative caucus, and as you know the fund sometimes assists caucus members with legal expenses, as do other parties.”
A lawyer for Mr. Wright declined to address Mr. Gerstein's statement.
"Mr. Wright has no comment at this time to this latest characterization of events," Peter Mantas said.
Mr. Duffy, Pamela Wallin and Patrick Brazeau, three Harper appointees to the Senate, stand accused of padding their expense accounts.
The Conservative government is leading a drive to suspend them without pay and a vote in the Senate on the matter is expected early this coming week.
Until now, Mr. Gerstein had remained out of the spotlight in the Duffy affair.
The senator, appointed to the Red Chamber at the same time as the PEI journalist, knows perhaps more about how Mr. Duffy ended up with a $90,000 cheque than any other politician in Ottawa.
Court documents have also revealed that Mr. Wright has told RCMP that Mr. Gerstein was one of only four people he told about his plan to cover Mr. Duffy’s expenses.
Mr. Gerstein, best known in Canada as the former president of Peoples Jewellers, is invaluable to Prime Minister Stephen Harper because of his strong fundraising skills.
He’s chair of Conservative Fund Canada and over the last eight years is among those most responsible for the party raising as much money as it has.
Mr. Gerstein told the convention the Tories have $14-million in the bank and remain debt-free. He said donations remain healthy.
There are no signs so far that the Senate scandal or the aging government – now in its eighth year of power – are hurting the Conservatives’ ability to raise money from party grassroots.
But Justin Trudeau’s Liberals are demonstrating they are learning to tap their rank-and-file membership in the same manner, a talent that had seemed to elude the party in the past. While they remain the third party in terms of seats they are out-fundraising the NDP.
The Liberals are still second place in fundraising but they collected cash from a larger number people in the latest financial quarter than the Conservatives. A total of 30,108 people gave money to the Liberals compared to 28,968 for the Conservatives.
Third-quarter returns released by Elections Canada Thursday showed the Tories raised $3.4-million between July and September in 2013 compared to $2.2-million for the Liberals.
The quarterly funds raised by the Liberals are up more than 50 per cent than the same period last year.