The View From Up North: Canadian Senator On Trial

Finally, Canada has a juicy political scandal -- with a lawyer at its center.

One of my earliest memories is the Watergate scandal. Since that time, I’ve been hooked on U.S. politics. What’s more fun than watching powerful men get kneecapped by human frailty like greed, arrogance and lust?

Gary Hart, President Nixon, President Clinton, John Edwards and on and on. They fascinate us, entertain us and anger us. We hate the corruption, but love the corrupted.

It is rare when I can say Canada has a political scandal worth blogging about. But we do. It’s not as tantalizing as Tricky Dick or as salacious as Slick Willie, but it does reach all the way to our Prime Minister’s office. And, as with all great scandals, it involves a lawyer at the highest level.

Here are the main actors:

Mike Duffy: A former journalist who was appointed to the Canadian Senate by Prime Minister Stephen Harper. As most of you know, the Canadian Senate has no real power. It’s a cushy, well-paying patronage job the Prime Minister uses to thank his supporters. Senator Mike was appointed because he’s a minor celebrity and can raise money for the Conservative Party.

Nigel Wright: High-powered financier and lawyer (University of Toronto law ’88). Nigel made a small fortune working for Onex Corporation, one of Canada’s most prestigious private equity firms. He left Bay Street to take a position as Chief of Staff to Prime Minister Harper, thus becoming one of the most powerful men in Canada.

Prime Minister Stephen Harper: Canada’s big cheese.

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Here’s the background. In Canada, the Prime Minister appoints senators to represent specific provinces and territories. Mike Duffy was appointed to represent our tiny jewel, Prince Edward Island. Senators are technically supposed to reside in the province or territory they represent. Sure, they spend a lot of time in Ottawa and otherwise travelling the country to raise money fulfill their duties, but they’re supposed to actually, you know, live in their home jurisdiction. Senate rules allow them to claim living and travel expenses properly incurred for Senate business.

In a criminal trial that started yesterday and is expected to run for 41 days, prosecutors will allege that Senator Mike didn’t really reside in PEI, but claimed some living expenses as if he did. They will also allege he claimed expenses for personal travel that had nothing to do with his Senate duties. These allegations come on the heels of an RCMP investigation into Senator Mike’s spending habits. After a thorough investigation, RCMP officers cantered forth on their dazzling steeds and laid 31 charges against the senator. The charges contained words like “fraud” and “abuse of trust”.

There’s a lot to the story, but the fun part involves lawyer Nigel Wright. Prior to the RCMP’s involvement, when it became apparent the cow patties were going to hit the fan, Senator Mike decided to pay back $90k for his improper expense claims allegedly to avoid a scandal. Perhaps Senator Mike didn’t have $90,000 in cash or liquid instruments to make a timely repayment, so Nigel stepped in. The wealthy Chief of Staff wrote the Senator a cheque for $90k, calling it a “gift”. Senator Mike used Nigel’s “gift” to repay the government for the improper expense claims. When asked, Senator Mike crossed his fingers behind his back and said he took out a bank loan for $90k.

Of course, word got out about the “gift”.

Nigel Wright claimed the Prime Minister knew nothing about his actions—he acted independently. The Prime Minister confirmed he knew nothing about the $90,000 payment. Nigel resigned in disgrace.

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Senator Mike is now potentially facing a long jail stint. The RCMP declined to charge Nigel Wright.

This scandal is disturbing for a number of reasons. The most amazing reason is that Senator Mike is a former journalist. He should know better than anyone that if you do something stupid the press is going to find out. How in the world could he believe nobody would discover the Chief of Staff wrote a $90,000 cheque to make a potential scandal disappear? It doesn’t make sense.

And, who thought writing a cheque for $90k was a good idea in the first place? I can only imagine a hypothetical conversation:

Nigel: “Pay it back. Say sorry. Problem solved.”

Senator Mike: “I don’t have $90,000 lying around. Do you?”

Nigel: “Sure I do. I’m rich.”

Senator Mike: “Well, I’m not.”

Both sit quietly in deep thought. A light bulb appears above Nigel’s head.

Nigel: “What if I wrote you a cheque for ninety thousand?”

Senator Mike: “You’re gonna cut me a cheque with the Government of Canada written on it?”

Nigel: “No, I’ll cut you a personal cheque. I’m rich, remember? We’ll call it a gift.”

Long pause as they contemplate the idea. A sly smile appears on Mike’s face.

Senator Mike: “Then I pay everything back…”

A sly smile appears on Nigel’s face.

Nigel: “…And this all goes away.”

Senator Mike: “Yeah, that’ll work. Great plan!”

Nigel turns sombre.

Nigel: “It’s gotta go to the grave.”

Senator Mike: “I won’t say anything if you won’t.”

Nigel: “Pinky swear.”

They pinky swear.

Okay, so who knows how the real conversation went — and remember that these are just allegations. But here is one possible train of thought:

1. Senator Mike believed he was in trouble for claiming improper expenses.

2. He connected with Nigel.

3. Somehow a decision was made for Nigel to cut Senator Mike a personal cheque for $90k.

4. Senator Mike and/or Nigel believed this elegant solution would solve the problem and make the whole ordeal fade into the ether.

5. Senator Mike and Nigel attended the Rob Ford school of problem solving.

Perhaps “believed” it would solve the problem is the wrong word. Maybe “hoped” is better. Or Hail Mary. From Senator Mike’s perspective, he’s going down. Here’s a desperate plan with a tiny chance of working, but if it does, he can go on “residing” in PEI and acting like a big shot.

From Nigel’s perspective, this type of scandal could really undercut the Prime Minster. Nigel decides on his own initiative to throw the Hail Mary. If it works, scandal avoided. If it doesn’t, Nigel falls on the sword and tells the world he acted alone; PM Harper had no knowledge. He was just being a loyal soldier, protecting the General.

As mentioned, the Prime Minister disclaimed knowledge of Nigel’s actions. I’m no fan of Mr. Harper, but I believe him. I’m pretty certain his Chief of Staff didn’t stop by for a donut and discussion about cutting a personal cheque to avoid a scandal. Nigel brain-cramped that decision on his own. Then, ever loyal, leaned on the sword and dropped.

Mr. Harper is ultimately responsible for hiring Nigel. At the same time, I don’t believe Mr. Harper should resign because of this. He does, however, have to live with the stench. The country will decide his fate in the upcoming October federal election. It won’t help his re-election bid that this trial will remain headline news for the next 40 days. You know the Liberal party is going to hammer the PM with this at every opportunity. As the Conservatives hit the campaign trail later this year to ask Canadians for another mandate, Prime Minister Harper’s name will be intertwined with the Senator Mike scandal.

Did the PM know or didn’t he? Should the electorate punish him simply because he hired Wright and, thus, the scandal is ultimately the PM’s responsibility? We’ll have to wait for the next election to find out.

In the meantime, we have a scandal, yay! As mentioned, Senator Mike went on trial yesterday in a packed Ottawa courtroom. Nigel Wright is expected to testify at some point. For the next month and a half we can actually click on the Canadian news and watch something politically juicy. We don’t have to keep it tuned to CNN and live vicariously through our American brothers and sisters.

And for that, Senator Mike, we thank you. You’ve done something good for your country.

That’s the View From Up North. Enjoy your week.


Steve Dykstra is a Canadian-trained lawyer and legal recruiter. He is the President of Keybridge Legal Recruiting, a boutique recruitment firm that places lawyers in law firms and in-house roles throughout North America. You can contact Steve at steve@keybridgerecruiting.com. You can also read his blog at stevendykstra.wordpress.com, follow him on Twitter (@IMRecruitR), or connect on LinkedIn (ca.linkedin.com/in/stevedykstra/).