WRECKING BALL
On May 14, 2013, a sunny spring day in the capital, the government of Stephen Harper was hit by a wrecking ball from the near space of network television. It was in every way a remarkable turn of events.
For seven long years, the Conservatives had successfully hobbled the national press by restricting the flow of information. Bureaucrats, government scientists, and cabinet ministers had all been silenced, except for the speaking points provided to them by the PMO. Even the location of cabinet meetings was secret. Journalists were banned from the second floor of the Langevin Block, where the prime minister has his office. Government workers were forced to sign “silence for life” loyalty agreements if they wanted to keep their jobs. As for the prime minister himself, he rarely held press conferences and always restricted the number of questions.
So it was particularly fitting that the story that changed everything came from Parliament Hill veteran Robert Fife, who didn’t think journalists should have relationships with politicians, and wasn’t much interested in photo ops. He conducted himself in the best traditions of print journalism, where his career had begun. He lived with a phone in his ear and dug into things. The walls of Fife’s fourteenth-storey office in downtown Ottawa are festooned with awards: two citations of merit from the National Newspaper Awards, the Edward Dunlop Award, and a 2012 Canadian Association of Journalists Award for television. Fife had broken a string of big stories, including the then defence minister, Peter MacKay’s, publicly provided helicopter ride from a private salmon camp on the Gander River in Newfoundland.1 But none of them compared to the story he had put together in twenty-four hours and was about to break that spring night. It was, simply put, the biggest story of his life.
The backstory had already been in the news for some time. Arising out of reviews by the Senate Internal Economy Committee, irregularities had been found in the expenses of a handful of senators, including Mac Harb, Patrick Brazeau, Pamela Wallin, and Mike Duffy. In Duffy’s case, he had paid back $90,000 in “inappropriate” expenses in March, claiming that his mistake had been an innocent one based on confusing Senate rules governing housing allowances.
Citing the results of an independent Deloitte forensic investigation (although Duffy did not cooperate with Deloitte), both the prime minister and the government house leader in the Senate, Marjory LeBreton, agreed with Duffy. On May 10, Government House Leader Peter Van Loan even praised Duffy in the House of Commons for his “leadership” in the expenses scandal, pointing out that he had repaid the money himself in March before Deloitte had even finished its audit.
The Senate had called in Deloitte to conduct an independent forensic investigation of the senators’ expenses, after its own attempts to quell demand for action in what the public saw as a sleazy entitlement scandal had failed. As one senator described it to me, “It was better to take care of a few bad apples in our chamber than have every senator investigated by the auditor-general.” When Deloitte reported to the Senate in April, it appeared to support Duffy’s explanation. The auditors said that the Senate’s residency regulations and guidelines do not include criteria for determining “primary residence,” so they had not been able to determine which of Duffy’s properties—the one in Ottawa or the cottage in Cavendish, Prince Edward Island—was his primary one.
Hill watchers had expected the story to develop, but not in the sensational way it did. According to CTV News, Mike Duffy had not paid back taxpayers at all. The bombshell was who had in fact made the payment—none other than Prime Minister Harper’s superstar chief of staff, Nigel Wright. For Fife, this was big-game hunting at its most perilous. Tory bloggers and trolls had sharp claws. The party was rumoured to have a lot of young operatives working in shifts, paid to watch news reports and respond. And Nigel Wright was not just the darling of Conservative circles, he was the PM’s right-hand man. When jolted, Stephen Harper was a political player who took down numbers. As Fife told me, he was “scared shitless” about putting the story on air.
The second irony of the story was that it involved Mike Duffy. Duffy had been a fixture on Parliament Hill for decades. Legendary CBC News boss Trina McQueen had once told Duffy that she was going to make him the first successful “fat man” on television. Neither of them could have known how successful that enterprise would be. Duffy entered the TV-news stratosphere. For a time, he was the third musketeer along with Peter Mansbridge and Brian Stewart in the glory days of the CBC’s The National. Before his Senate appointment in late 2008, Mike Duffy had his own public affairs show on CTV and was easily the most recognizable journalist in Canada. There was no one in the business who could match him in live broadcasting, and when he gave that intimate little wink to the camera when signing off, individual viewers really did think that the “Old Duff ” was winking at them.
Like all stars in the often ego-driven business of television news, Duffy had his detractors—too schmoozy for some, too pro-Conservative for others. But he was also something of an elder statesman in the press gallery, with a cultural memory and résumé few on the Hill could match. He often took rookie reporters under his wing, sharing contacts and offering advice. One of the beneficiaries of his largesse was Robert Fife. Sitting on Fife’s office bookcase was a picture of him with two legends of the business: Craig Oliver and Mike Duffy.
When Stockwell Day, as the leader of the Canadian Alliance, tried to forbid scrums because he thought they lacked decorum, it had been Duffy who took him aside and told him, “Stock, you’re not in Alberta anymore.” It was the kindest way of telling Day that he was playing in the big leagues now, that journalists in Ottawa wouldn’t put up with tacky restrictions on their right to seek information from public officials. No one had yet met a future leader named Stephen Harper.
Fife had the two essential assets required to publish a story of this magnitude: impeccable sources and a media lawyer, Peter Jacobson, more interested in finding a way to get the news out than avoiding all possible lawsuits. Before airing his blockbuster story on the late-night news, Fife placed the duty calls to the PMO, Conservative Party headquarters, and Senator Duffy for a response.
It was actually the second time in two days that Fife had called party headquarters, where the story of Wright’s payment to Duffy had been officially denied. Then another source, who was “outraged about the negotiations with Duffy and the payout,” came forward with more details. This time when Fife made his duty calls, he got near-identical statements from the PMO and Senator Duffy. Their answers came with more topspin than Rafael Nadal’s forehand. According to the PMO, “Mr. Duffy had paid back the expenses in question, and no taxpayer resources were used.” The senator from PEI replied to CTV with an email that was exquisitely misleading but true: “The Royal Bank helped me. . . . I dealt with my bank personally. Nigel played no role.”
The next day, the sunny skies in Ottawa gave way to clouds; by noon a thunderstorm was roiling across the city. But nothing in the skies compared to the thunderheads gathering over the government. On May 15, 2013, the most shocking element of Fife’s story was belatedly confirmed by the PMO in plain language: Nigel Wright had indeed given Senator Duffy $90,000 to pay his expenses. And there was an added wrinkle—the money was not a loan, but a gift.
It was a volte-face from the original story that Duffy himself had repaid his improper expenses. Fred DeLorey continued to insist there was “no party money involved in any way.” The morning after Fife broke the story, deep in the shadows of the PMO, staffer Chris Woodcock sent an email to Senator Duffy: “Can you confirm whether you advised the Senate ethics office of any loan/gifts involved in the March 25th payment?. . . Trying to cover off all the angles.” The PMO was in pandemonium. A story that no one in the office ever thought would become public was out there for Canadians to see—or at least they could see the tantalizing tip of a much larger iceberg. The PMO’s objective was to come up with a “narrative” that would keep what lay beneath the surface hidden. Job one was protecting the prime minister.
Stephen Harper was so anxious to distance himself from the affair that he told the public an implausible, possibly panic-stricken story. He insisted that he, like everyone else, first learned of the Wright payment to Duffy on May 15, 2013. But how could that be, since Fife had aired a news story the night before, May 14, and made confirming calls to the PMO before the broadcast? The prime minister was asking Canadians to believe that a professional staff expressly recruited to advise, inform, and protect him didn’t tell him about the dramatic news report of the night before, making explosive allegations about his own chief of staff and one of his highest-profile Senate appointments. It would not be the last of the fact-challenged stories from the prime minister about the Wright/Duffy affair.
On May 16, the prime minister was in New York pitching the controversial Keystone XL pipeline to the Council on Foreign Relations, a non-partisan US think-tank that also publishes the prestigious journal Foreign Affairs. (Nigel Wright was also in New York, celebrating a personal milestone with friends: his fiftieth birthday. It can’t have been much of a party.) Harper told his American audience that the pipeline would create forty thousand jobs in the United States. He stressed that Keystone XL also offered oil from allied Canada rather than from an ideologically unfriendly Venezuela. Thanks to advertising in US publications placed in advance of the PM’s appearance, pro-environment protesters were also alerted to demonstrate outside the event.
While the prime minister wooed his elite audience in the Big Apple, Senator Mike Duffy was being designated as the Rotten Apple back in Canada. The man who had co-hosted the Conservative Party Convention after the 2011 general election received a telephone call from Ray Novak, senior PMO staffer and trusted ally of Stephen Harper. According to Duffy, the government house leader in the Senate, Marjory LeBreton, was also on the line. Duffy claimed that he was told that if he didn’t resign from the Conservative caucus immediately, his case would be sent to the Senate ethics officer and he would risk being thrown out of the Red Chamber. LeBreton insisted, “You’ve got to do this, Mike. Do what I’m telling you. Quit the caucus within the next ninety minutes. It’s the only way to save your paycheque.”
The Conservative brain trust was moving quickly to put as much distance between the party and its former star-fundraiser as possible. Duffy complied with the PMO request, explaining that he was resigning from caucus because the public controversy over his debt settlement had become “a significant distraction to my caucus colleagues and to the government.”
More to the point, there were potentially dangerous rumours swirling around Ottawa that Duffy may have charged the Senate for expenses he incurred while campaigning for colleagues in the House of Commons during the 2011 election. Though ostensibly disgraced, Duffy said that he looked forward to all the relevant facts of his expenses being made public in due course, adding that once the public knew what had happened, they would see that he had done nothing wrong. After that, the path to rejoining the Conservative caucus would be clear.
That was a tall order. The Harper government’s damage-control strategy was taking shape, with Senator Duffy as the main culprit. But the other participant in the $90,000 payoff was a different matter. Nigel Wright was a blue-chip political asset to the prime minister, with a long history of involvement in Conservative Party policy and finance going back thirty years.2 If there was any doubt that the PMO would try to come up with a narrative to save him from the scandal, it was quickly removed by the prime minister’s director of communications. Andrew MacDougall told the media that Nigel Wright had “the full confidence of the prime minister” and “he will not resign.”
MacDougall attempted to rag the puck by declaring that the PMO was cooperating with a probe by Parliamentary Ethics Commissioner Mary Dawson. If the Conservatives could give the impression that something was being done about the extraordinary deal between the prime minister’s chief of staff and his celebrity senator, the brewing scandal might slip behind the fog banks of yesterday’s news.
It was not Mary Dawson’s first dealing with Nigel Wright. When Wright had taken the top job in the PMO, Dawson had helped devise the “ethical wall” designed to protect him from conflicts between his role in the PMO and his past life as a Bay Street whiz kid at Onex Corporation. The ethical wall would be administered by the deputy chief of staff to the prime minister. Then in 2012, Dawson got a chance to assess the height and thickness of Wright’s ethical wall. It became public that Barrick Gold, founded by Peter Munk, had lobbied Wright three times in May about international relations and international trade.3 Wright was personal friends with both Munk and his son Anthony, who had worked with Wright at Onex. The ties were close. Wright was godfather to Anthony’s son.
The calls were of interest because Barrick was the world’s largest gold mining company. It had an $8.5 billion investment at the troubled Pascua Lama mine in the Andes, straddling the border of Chile and Argentina. The project came to a grinding halt in Chile in April 2013 when Chile’s environmental regulator stopped construction of the mine on its side of the border, citing serious environmental violations affecting the water supply of the indigenous Diaguita Indian community living below the site.
For as long as anyone could remember, the Indians had taken their water directly from their glacier-fed river. Now toxic chemicals, including arsenic and sulfates, were flowing into the headwaters, causing health problems. Barrick was fined $16.4 million, after authorities confirmed that the company had not told the full truth when reporting environmental failures in their operation. Diaguita protesters held up signs that didn’t enhance Canada’s image on the evening news: “Canada: What’s HARPERing here?” and “Harper go home.”
Foreign affairs minister John Baird vigorously defended Wright over conflict allegations arising out of the calls from Barrick Gold. The calls were made in May 2012, shortly after Harper blocked a resolution on Argentina’s claim to the Falkland Islands at the Summit of the Americas in Colombia. Canadian mining companies were concerned this move would make it harder for them to obtain permits from the Argentinian government, and Barrick planned to continue construction on the Argentinian side of Pascua Lama. According to Baird, Wright listened to Barrick’s concerns, said nothing, and directed the matter to the proper officials. Since Barrick called Wright on May 14, 25, and 29, one wonders if the “proper officials” were on a long lunch.4
Dawson discontinued her examination of a possible conflict of interest for Wright over Barrick’s contacts with him. As she often does, she did this without issuing a notice, ruling, or report. When CP reporter Joan Bryden pressed Dawson on the disposition of the file, the commissioner told her that she was satisfied there had been no violation on Wright’s part of the Conflict of Interest Act. It was transparency and accountability Harper-style. The PMO claimed vindication. Andrew MacDougall issued a statement: “As we have said all along, Mr. Wright conducted himself properly and in accordance with the rules.”5
NDP ethics critic Charlie Angus wasn’t buying it. “It’s who you know in the PMO and this is what the prime minister said he was going to change, this is the culture that he said was going to get cleaned up.”There were good reasons for the political opposition and the public to worry about the shadowy interface between big business and big government. Access to the highest legislative levels is a huge priority for companies like Barrick, and their executives were not shy about bringing in the politicians when they had a problem.
That’s exactly how Barrick recovered most of its losses from investing in asset-backed commercial paper (ABCP) that was being sold by Canada’s chartered banks by the late 1980s. Barrick was advised by CIBC World Markets that their $66-million investment was safe in a third-party ABCP trust called Ironstone. But when it turned out that the investment was freighted with a lot of toxic subprime mortgage debt, the big banks could not protect all investors and Barrick lost its money. Barrick sued the CIBC, and after years of legal wrangling got some satisfaction in May 2008. But it didn’t happen before a call went out from finance minister Jim Flaherty to the bank. As Bruce Livesey wrote in his book Thieves of Bay Street, “Federal finance minister Jim Flaherty had stepped in and telephoned senior executives at the bank, pressing them to return Barrick’s cash. CIBC reluctantly handed over $49 million to settle the matter.”6
Access to government by corporations was a priceless commodity, as evidenced by the king’s ransom paid by Barrick Gold to acquire the services of John Thornton. The veteran international banker, a former president of Goldman Sachs Group, received a “golden hello” of $11.9 million in cash when he joined Barrick as co-chair on June 5, 2012. As reported by Bloomberg News, “Barrick Chairman Peter Munk told investors . . . that he needed the former banker, ‘a highly desirable, well known commodity’ to secure access to governments and protect against possible losses of mineral rights.”7
Just as the government had circled the wagons around the PM’s chief of staff in the matter of Barrick Gold, the Conservatives came to his rescue in the immediate fallout from the Wright/Duffy affair. Former Harper communications director Dimitri Soudas emailed CBC in response to their May 16 story about the Wright payment to Duffy. Even though he was out of government as a member of the Canadian Olympic Committee, Soudas weighed in with what would be the government’s first “narrative” to find a way out of the scandal; Wright’s payment was the act of a Good Samaritan.
In December 2013, Dimitri Soudas was brought back from the Olympic Committee, just before the Winter Games in Sochi, to become the new executive director of the Conservative Party of Canada. Someone had obviously been pleased enough with his remarks about Nigel to make Soudas the party’s principal election organizer. Four months later, Soudas was out the door again after he was accused of meddling in the nomination process of his fiancée, MP Eve Adams.
Soudas’s strategic encomium notwithstanding, the Opposition had always been troubled by the appointment to the PMO of a person with such deep corporate connections as Nigel Wright. The sheer size of Onex Corporation as the largest private investment capital firm in Canada meant to Wright’s critics that there was scarcely a file that would cross his desk that wouldn’t present a conflict of interest. The company had assets of $44 billion, revenues of $34 billion, managed $16 billion, and had 229,000 employees worldwide.
On November 2, 2010, Nigel Wright had appeared before Parliament’s Standing Committee on Access to Information, Privacy, and Ethics as the prime minister’s chief of staff designate. Liberal MP Wayne Easter pointed out forty Onex holdings that were connected to federal government departments. An ethical wall might protect Wright when it came to the aerospace industry—his area of expertise at Onex, where he sat on the board of two affiliated companies, Hawker Beechcraft and Spirit AeroSystems. But would an addition to Wright’s ethical wall be necessary to cover off special taxation, taxation on the private equity sector, and issues of tax deductibility?
Easter produced a chart showing an Onex connection to Cineplex and Indigo in cultural industries, Allison Transmission in heavy equipment and fluids, Hawker Beechcraft in aviation, and ResCare in health. Bloc Québécois MP Carole Freeman pointed out that Wright was moving from the largest private corporation in Canada to the most influential position in the country next to the prime minister. Since the activities of Onex were so pervasive, how could he advise Stephen Harper without putting himself in perpetual conflict? Wright replied that he had sent a memo through the Privy Council Office that no matters touching Onex were to be sent to him.
NDP MP Pat Martin flatly rejected Wright’s “ethical wall” defence against his many built-in conflict-of-interest issues. He jokingly observed that the PMO couldn’t even send out for pizza because Onex had an interest in CiCi’s Pizza. On a more serious note, Martin raised the issue of the timing of Wright’s appointment. He said that journalists were initially told that the prime minister had offered Wright the chief of staff position just weeks before his appointment was announced in September 2010. Under questioning from Martin, Wright confirmed that he had actually accepted the position six months earlier, in March. That meant that when he accepted the offer to run the PMO, Wright was on the board of Hawker Beechcraft, a company with tie-ins to the F-35 project. This in turn led to the question that was uppermost on Martin’s mind: had Wright played any role in promoting the F-35 between March, when he was still at Onex, and October, when he took up his post in the PMO?
It was the elephant in the room, since Ottawa was embroiled in controversy over buying the hugely expensive high-tech aircraft to replace Canada’s fleet of CF-18s. Wright replied with icy precision. “Mr. Chair, I can say I have not had any conversations regarding the F-35 or Lockheed Martin with any public official, and I have not promoted—” Martin, who was listening as carefully as Wright was speaking, cut him off. “No, not with a government official, but marketing it internationally?” Again, Wright was measured in his response. “I have not promoted in any way to anybody the sale of that airplane, or the purchase of that airplane for that matter.”
Their final exchange cut to the quick. Martin opined that the idea of an “ethical wall” was fatuous. “Walls in and of themselves don’t have ethics. The ethics have to reside within individuals, and it seems like this is a construct of convenience to defend the indefensible, which is your position as chief of staff.” Unflappable, Wright smoothly replied that the ethics of the person administering the ethical wall were vital. He talked about the “common-sense” protection of his own reputation and the reputation of the prime minister being “critical,” and promised to get the working relationship right. He also said that the prime minister’s values and his values were aligned in every way. And then this: “. . . not only my first loyalty but also the first loyalty of the deputy chief of staff, of every staff member in the PMO, and the Prime Minister himself is to the law of the land.”
If the Opposition seemed obsessed about Nigel Wright’s possible conflicts, Stephen Harper was partly responsible. The Harper government had actually tightened the connection between the federal government and big business in a way that made necessary the close scrutiny of appointments like Nigel Wright’s. Getting this magnitude of a star out of the private sector and into public service was seen in business circles as a big accomplishment for Stephen Harper. Commenting on the Wright takeover of the PMO from outgoing chief of staff Guy Giorno, Duncan Dee, then chief operating officer of Air Canada, said, “This is as close to a coup as it comes. . . . Nigel is one of the brightest Canadians I know, and he’s incredibly focused on doing the right thing. He’ll bring a tremendous sense of the economy and of politics. . . . There aren’t many people who can synthesize both the economy and politics.”
Wright earned about $2 million a year at Onex, and had millions of dollars in stock options. When he was asked to become the prime minister’s chief of staff, Wright said it was “a once in a lifetime privilege, impossible to do anything with other than say yes.” He had always been interested in public policy, and the skills he used to negotiate multi-billion-dollar business deals were no doubt useful in negotiating foreign-trade deals. It was understood that he would return to Onex after his time in the PMO.
The ease with which Wright planned to move between these two worlds shows how little space there is between business and government in Canada today. The Canadian Pension Plan Investment Board (CPPIB) is a case in point. In 2007, the passage of Bill C-36 transferred all CPP assets to the control of the “arm’s length” CPPIB. The CPPIB was created in 1997 by the then finance minister, Paul Martin, to manage the investments of the CPP. Under the Harper government, the formerly conservative management approach has shifted toward a willingness to take on riskier investments for better returns. Offices were opened in London and in Hong Kong in 2007, and in New York and Sao Paulo, Brazil, in 2014. CPPIB participates directly in mergers and acquisitions to boost returns. In October 2013, the organization led the $6.3 billion buyout of Neiman Marcus group, which owns Bergdorf Goodman. The fund has also invested in Formula One racing, and $700 million worth of Manhattan office towers.
As of December 31, 2013, the CPPIB had assets of $201.5 billion, making it one of the ten largest pension funds in the world. CCPIB chief executive officer Mark Wiseman said the board continues to diversify its portfolio, as evidenced by its real estate investments in South Korea, Brazil, and China in the third quarter of 2013.8
Wiseman joined CPPIB in 2005 as senior vice-president of private investments, and became CEO in July 2012. Nigel Wright’s former and future boss at Onex Corporation, Gerry Schwartz, told Canadian Business magazine that you can feel the weight of the CPPIB in the marketplace, and Wiseman’s influence. “He’s done a marvellous job,” Schwartz said. The pension board is not just an investor, “it’s actively engaged with the assets it acquires and firms it works with.”
The CPPIB is now partnering with companies such as Onex Corporation. In July 2010 CPPIB and Onex partnered to purchase Tomkins PLC for $4.5 billion. Takeover talks had begun in March, the same month Wright had agreed to join the PMO. It was the largest global private equity transaction in 2010. The then British-based company provided hydraulics to the oil, gas, and mining industries.
According to Bloomberg, the bid was 41 percent higher than Tomkins’s closing price the day before the takeover bid. The manufacturer had reported losses in the previous two years, and CPPIB and Onex were the only suitors in a leveraged buyout. Tomkins’s chief executive officer, James Nicol, would remain. Nicol had spent his early years in management at Magna International Inc., where he became president and chief operating officer. CPPIB investments also include Magna Corporation.
In November 2012, CPPIB partnered with Onex again to purchase Tomkins Air Distribution for $1.1 billion. One of the spinoffs from the parent company is Titus, which provides data security to the military in Canada, the United States, Australia, Belgium, and Denmark. Titus also provides services for governments, the aerospace industry, police forces, and the financial industries.
Onex, Magna, and the CPPIB—a cozy, interconnected world of high finance that Nigel Wright had once navigated with extraordinary success. (Onex and CPPIB put Tomkins PLC up for sale in November 2013 and sold it in early April 2014 for $5.4 billion.) CPPIB has also invested $80 million in Syncrude, $553 million in Exxon, $62 million in Nexen, $218 million in the TransCanada Corporation (Keystone XL), and $201 million in Enbridge (Northern Gateway). RBC is the pension plan’s largest domestic holding, with $707 million invested in the bank according to a series of articles in the Huffington Post by Amy MacPherson.9
Nigel Wright may have been able to negotiate multi-billion-dollar deals with ease, but his negotiations with Mike Duffy were turning into an ethical meltdown and a political disaster. On May 16, 2013, the same day Duffy resigned from the Senate, RCMP superintendent Biage Carrese sent a letter to Clerk of the Senate Gary O’Brien, informing him that the Force was “conducting a review of the examinations conducted by Deloitte. . . .” The RCMP requested Senate policy documents for the last ten years. By this time, Duffy was holed up in his Cavendish cottage looking at a clutch of journalists who were gathered on his property, though they would soon be ordered to leave by police.
The next day, May 17, 2013, PMO damage control kicked into high gear. Senator Pamela Wallin, co-host with Senator Duffy at the Conservatives’ 2011 Convention, announced that she too was leaving the Tory caucus over disputed expenses arising out of the Deloitte audit. Like Duffy, Wallin denied any intentional wrongdoing and was effectively ordered to leave caucus. She had already stepped down as chair of the Senate’s National Security and Defence Committee, the Foreign Affairs Committee, and the Subcommittee on Veterans’ Affairs in April 2013. At the time, she cited personal reasons, though few doubted it also had to do with multiple reviews of her expenses.
If the PMO thought that defenestrating another high-profile Conservative senator would blunt the momentum of the scandal and possibly save the public service career of Nigel Wright, they were dead wrong. Legalities to one side, there was an appearance of a double standard in the PMO’s game plan. If it was a hanging offence for Mike Duffy to have taken a $90,000 gift to pay back improper expenses, it was surely a hanging offence to have given him the money to do it.
Nigel Wright was just days away from the end of his exempt staff career. Retaining him, now that the payment to Duffy was public knowledge, would be an unmistakable sign to Canadians that the prime minister approved of Wright’s “gift” to Duffy. And there was one more thing. On the day that Senator Wallin left the Tory caucus, CTV’s Robert Fife filed another devastating story about the Wright/Duffy affair. He reported that the Senate’s Internal Economy Committee had sanitized the original Senate report of Mike Duffy’s expenses, a document that concluded that he in fact had broken residency rules. The rot appeared to run deeper than a single transaction between Wright and Duffy.
The prime minister decided it was time to cut bait. Early on Sunday, May 19, 2013, the PMO released two statements. In one of them, Wright reported that the PM had accepted his resignation. Already constructing his and the prime minister’s defence, Wright said that what he did was in the public interest, and that he accepted sole responsibility. His words were as carefully chosen as the ones he used in front of the Parliamentary Ethics Committee. “I did not advise the Prime Minister of the means by which Senator Duffy’s expenses were repaid, either before or after the fact.”
In his first personal comment since Fife broke the story, Prime Minister Harper confirmed that he had accepted Wright’s resignation. “It is with great regret that I have accepted the resignation of Nigel Wright as my Chief of Staff. I accept that Nigel believed he was acting in the public interest, but I understand the decision he has taken to resign. I want to thank Nigel for his tremendous contribution to our government over the past two and a half years.”
The piece on Stephen Harper’s political chessboard that he most wanted to keep had been sacrificed. It was an unusually humiliating moment for Harper, smacking of connivance rather than conviction. Just a few days before, he had said through his director of communications that Wright enjoyed his full confidence and wouldn’t be resigning. Now he had reversed himself without explaining what had changed. And if the goal had been as strategic as it looked—to stop the political bleeding—it was also a bad chess move.
The day after the prime minister accepted Nigel Wright’s resignation, Fife reported that Harper’s former special counsel and legal advisor Benjamin Perrin had worked on the legal deal between Wright and Duffy’s lawyer. According to Fife’s report, Perrin helped draft a memorandum of understanding: money would be provided for the payment of expenses and the Senate investigation would go easy on Duffy. According to Fife, the PMO declined to release the agreement, claiming that it was in the hands of Ethics Commissioner Dawson, who was investigating the payment.
Perrin, who left the PMO in April 2013, denied involvement. In a carefully worded statement released after the CTV story linking him to the payment, Perrin said, “Last night’s CTV story in relation to me, which is based on unattributed sources, is false. I was not consulted on, and did not participate in, Nigel Wright’s decision to write a personal cheque to reimburse Senator Duffy’s expenses. I have never communicated with the prime minister on this matter. In all my work, I have been committed to making our country a better place and I hope my record of service speaks for itself.” Perrin had left the PMO the month before to return to a teaching position at the University of British Columbia.10
The Senate scandal was turning into an exploding pumpkin for the government. The body count was growing—Duffy, Wallin, and Wright—and the prime minister’s credibility was now in play. He was either clueless or conniving in relation to what was now being called Duffygate. With Fife’s latest story, there was a strong suggestion that there was much more to come. It was time for the prime minister to get out of Dodge.
Two days after the initial CTV story broke, the PMO had announced a trip to South America for the prime minister. He would visit Peru and Colombia, meeting with leaders and representatives of the private mining sector.11 With the flames of scandal licking at his office door, Harper was off to something called the Pacific Alliance Leaders Summit in Cali, Colombia, an alliance formed by Chile, Colombia, Mexico, and Peru in 2011. This was the first time the prime minister participated in the forum— a trading bloc that even some Tories had not been sure Canada should join. Pro–free trade Conservative MP Ed Holder pointed out to a House of Commons hearing in March 2013 that there was no real reason to join the Alliance since Canada already had free-trade agreements with all four members of the group.
Two hours before boarding the Challenger that would take him to South America, Stephen Harper conducted an unusual Tuesday caucus to address his MPs. It was normal Harper rules— a photo op without questions from reporters. Without mentioning any of the players involved in the story the whole country was talking about, Harper called the scandal a “distraction” from the government’s work and said that he was angry about it. “When distractions arise, as they inevitably will, we will deal with them firmly.” The PM ignored reporters who shouted out questions. The journalists were quickly drowned out by the applause of caucus members and then asked to leave. Liberal MP Ralph Goodale called Harper’s speech “totally vacuous” and “tone deaf.”
Relations between CTV and the PMO soured. The network had previously had an arrangement with the government to be apprised of big announcements the evening before they were made. The news item would be previewed on CTV’s huge platform of over a million viewers, and the next day, the network would give full coverage when the initiative was officially announced. After the Wright/Duffy story was broadcast, that arrangement came to an end.
CTV’s Robert Fife gave me his own assessment of how the Harper government had reacted to his story of cash payments, shady deals, and possibly illegal acts rolling out of the Prime Minister’s Office: “Basically, it’s been one lie after another.”