Conservatives gave Duffy more than one cheque, senator claims

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Mike Duffy says staff in the office of Prime Minister Stephen Harper arranged for a Conservative Party lawyer to cover his legal fees – a payment that was in addition to the cheque for $90,000 that Mr. Harper's former chief of staff wrote to foot the bill for Mr. Duffy's improperly claimed expenses.

Speaking in the Senate, Mr. Duffy claimed the PMO tried to cover up an issue that was angering its base. It was his second speech since the Red Chamber began deliberating last week about whether to suspend him, Pamela Wallin and Patrick Brazeau over questionable expenses.

Nigel Wright, Mr. Harper's former chief of staff, has previously admitted writing the controversial cheque to cover out-of-town living expenses that Mr. Duffy, a senator for Prince Edward Island, had claimed even though his main residence is in Ottawa. On Monday, Mr. Duffy rose in the Senate to say the Conservative Party paid $13,560 for his legal fees.

"One cheque from Nigel Wright? No, ladies and gentlemen. There were two cheques, at least two cheques. The PMO had Conservative party lawyer, Arthur Hamilton, pay my legal fees," Mr. Duffy said.

The allegation that the Conservatives paid Mr. Duffy's legal expenses could infuriate Tory supporters, who bankroll the party's election machine.

Mr. Duffy tabled the stub of the cheque for the legal fees in the Senate along with a note from Mr. Hamilton.

Cory Hann, a spokesman for the Conservative Party, issued a statement acknowledging the payment. "At the time these legal expenses were incurred and paid, Mike Duffy was a member of the Conservative caucus," said Mr. Hann. "The Conservative Party sometimes assists members of caucus with legal expenses."

On Monday, Mr. Duffy attempted to build a case to show he didn't break any rules and shouldn't have been forced to repay any money. Instead, he said, the PMO concocted a "script" for him to tell the media that the money came from a loan he had secured with the Royal Bank. Mr. Duffy said that he agreed to go along with the scheme after threats from the PMO.

"The PMO told me to say: 'My wife and I took out a loan from the Royal Bank,' " he told the Senate. In fact, Mr. Duffy said, he took out a loan to back up the line "written by the PMO to deceive Canadians as to the real source of the $90,000."

But an e-mail obtained by The Globe and Mail raises questions about Mr. Duffy's allegations that the PMO coached him to lie about where he got the $90,000.

It indicates that Chris Woodcock, the PMO's director of issues management, asked Mr. Duffy whether he'd advised the Senate ethics officer of any loans or gifts related to Mr. Wright's $90,000 cheque.

Mr. Duffy replies no, he hadn't.

"Anyone who asked was told the truth: that I had paid with my personal cheque on my rbc acct. Did I have help. Yes from the RBC and my wife who co signed for the extension of my line of credit," Mr. Duffy replies.

The beleaguered PEI senator also tried to show that the PMO had confirmed that his living-expense claims passed muster, tabling an e-mail he received from Mr. Wright last December saying, "I am told you have complied with all of the applicable rules and that there would be several senators with similar arrangements."

The Senate continues its debate on motions put forward by Claude Carignan, the Leader of the Government in the Senate, to suspend the three senators without pay or benefits. It is clear that Mr. Harper would like the matter resolved before he must face the members of his party at a convention this week.

But a move to cut off the debate in the Senate, which the Conservative government said last week would be introduced Monday, never happened, for reasons the Conservatives did not explain. If they move Tuesday to close the debate, the earliest they could force votes on the suspension motions would now appear to be Friday.

Some Conservatives, and most of the other Liberal and independent senators have voiced concerns that Mr. Duffy, Ms. Wallin and Mr. Brazeau are being suspended without due process and in the middle of RCMP investigations into their expenses. Conservative senators met Monday to weigh possible reductions of the penalties but did not reveal the outcome of their deliberations.

On Monday, Mr. Harper said in another radio interview that he had "dismissed" Mr. Wright when he found out about the $90,000 – he had said earlier Mr. Wright resigned.

Jason MacDonald, the Prime Minister's communications director, said in an e-mail Mr. Wright has assumed sole responsibility for his actions and that Mr. Harper was not aware of the arrangement. "We remain steadfast in our view that senators who have claimed inappropriate expenses should not be collecting a paycheque from the public."