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Prime Minister Stephen Harper, right, chats with Dr. Arthur Porter, left, at the Montreal General hospital in Montreal Friday Nov.24, 2006.Ryan Remiorz/The Canadian Press

The RCMP investigated the Conservative government's appointment of Arthur Porter to Canada's intelligence oversight agency after allegations surfaced the physician was involved in a kickback scheme in Montreal, The Globe and Mail has learned.

Dr. Porter made high-profile friends in the Conservative Party after he arrived in Canada from the United States in 2004 to run the McGill University Health Centre. He eventually got the attention of the Prime Minister's Office, which invited him to sit on the Security Intelligence Review Committee (SIRC) in 2008.

Dr. Porter died this week in Panama, where he was fighting extradition on charges of fraud and bribery laid in 2013. According to Quebec's anti-corruption unit, Dr. Porter received $22.5-million from the health centre's awarding of a $1.3-billion hospital contract to engineering firm SNC-Lavalin.

Given the allegations involving Dr. Porter in Montreal, the RCMP launched an investigation to determine if there was any wrongdoing related to his appointment to SIRC or his promotion as the agency's chair in 2010.

The probe brought the RCMP into the highest echelons of the Harper government. The file was eventually closed without any evidence of wrongdoing or any charges being laid, a government official said.

"The questions surrounded the possibility that anyone received favours as part of the appointment process," said the official, who spoke on condition of anonymity.

The RCMP investigation highlights the problems raised by the appointment of Dr. Porter, whose management style had already raised questions during his previous job, at the Detroit Medical Centre.

By joining SIRC, Dr. Porter became an "honourable" member of the Privy Council. According to protocol, the flag on the Peace Tower should be flown at half-mast on the day of his funeral. However, federal sources said Prime Minister Stephen Harper has decided to deny the honour to Dr. Porter, whose death was announced on Wednesday.

NDP MP Charlie Angus said the federal government should have acted more quickly to remove Dr. Porter from the list of Privy Council members.

"The Prime Minister fast-tracked him into oversight of the Canada spy agency and then left him with the honours of the Privy Council when he was rotting in a Panamanian jail," Mr. Angus said. "It's a little late now to say we are going to keep the flag flying."

On Wednesday, a spokesperson for the Department of Foreign Affairs responded to questions about Dr. Porter's death by stating: "We are aware of the death of a Canadian citizen in Panama. … Due to the Privacy Act, further details on this case cannot be released."

Crown prosecutor Marie-Hélène Giroux said on Thursday that she was still looking for proof of Dr. Porter's death before dropping the charges against him.

The initial announcement of his death came from the co-author of his autobiography, Ottawa journalist T.R. Todd.

"While family was present in the country, he died suddenly and alone," Mr. Todd said in a statement on his website.

In his 2014 book, The Man Behind the Bow Tie, Dr. Porter said the money from SNC-Lavalin was for his work on international projects, not the Montreal hospital. He said he had helped the firm's interests in Africa over the years, including in Libya, where the company enjoyed close ties with the Gadhafi family.

"I think people often muddled SNC-Lavalin's strong interest in my international skills with its bid for the hospital contract. It was an unfortunate misperception," he wrote.