Duffy trial closer to date with Mr. Wright
PM’s former chief of staff will take stand as star witness when drama resumes Aug. 11
OTTAWA— Act 2 of the long-running courtroom drama that is the Mike Duffy fraud trial closed early Thursday with a cliffhanger.
Prosecutors promised star witness Nigel Wright, Prime Minister Stephen Harper’s former chief of staff who now works for Onex Corp. in London, will appear when the curtain next rises Aug. 11 and the trial — now on hiatus for seven weeks — resumes. Before that, however, Judge Charles Vaillancourt got a glimpse of Wright’s role and, perhaps, Duffy’s motivation for billing the Senate $153,000 in questionable expense claims or his motivation for demanding payment from Wright to make his financial woes disappear.
Details presented in court fleshed out the RCMP’s move to lay charges against Duffy for accepting a $90,172 payment from Wright that police characterize as a bribe. Duffy has pleaded not guilty to that and charges of fraud and breach of trust.
The glimpse of a possible motive came through three days of testimony by a forensic accountant who showed Duffy to be a man barely living within his means, relying on a line of credit and the equity in his Ottawa home to cover his monthly spending.
Duffy’s lawyer, Don Bayne, challenged that picture, but until Duffy himself testifies, as Bayne promises he will, what we are left with are mere hints of what may come.
Grenon, an accountant with the federal Public Works’ Forensic Accounting Management Group hired by the RCMP, testified that the former broadcaster took a significant pay cut when he became a senator and Conservative party fundraising star. Duffy earned about $248,000 in salary from CTV/Bell media in 2008 before his appointment. When he was appointed in January 2009, a senator’s salary was $130,400, rising that March to $132,300. Senators are currently paid a basic salary of $142,400. Plus, Duffy received pension income, dividends from investments and money from his company, Mike Duffy Media Services Inc.
Yet Grenon concluded Duffy’s spending and lifestyle outpaced his earnings. He added a caveat: “It was sustained by the equity in his home here in Ottawa . . . by refinancing the mortgage.” Grenon’s evidence has not yet been accepted as admissible expert testimony by the judge.
Bayne was merciless in cross-examination, suggesting Grenon was a biased Crown witness who viewed himself part of the RCMP investigative team, and failed to take into account that Duffy was no different than many Canadians who use lines of credit or equity financing. He said Duffy had $110,000 worth of equity in his home in the Ottawa suburb of Kanata, a property the bank appraised at $470,000. Bayne suggested Duffy didn’t have a mortgage on his cottage in PEI, which held an appraised value for property taxes of $114,000. But he said the accountant had no idea how many “hundreds of thousands of dollars” the cottage overlooking Cavendish Beach could be worth.
“I suggest to you, sir, that’s not overspending at all; Sen. Duffy didn’t overspend. He didn’t spend beyond his means. Overspending is spending money you don’t have.”
What matters, said Bayne, is “the money you have access to.” Bayne suggested the bank deemed Duffy a good enough credit risk to allow his line of credit to grow from $25,000 to $100,000 and to refinance his mortgage in 2013 for an additional $91,600 on top of the outstanding $268,000 balance.
The trial had already heard Duffy used that refinancing not to repay the Senate for an amount then thought to be $90,172, but instead to put down $80,000 to reduce his line of credit. It was a move Bayne characterized as reasonable, to take advantage of lower interest rates.
Grenon replied it’s not always wise to move short-term consumer debt into long-term household debt. Though he agreed there was no evidence that Duffy had failed to pay off his credit cards or make his mortgage payments, he noted Duffy’s bank, RBC, put a $425,000 “charge on the property in Kanata” — in effect, a lien to ensure the bank would be a first creditor in line if the house were sold.
Duffy’s trial glimpsed a possible motive for why he allegedly accepted a $90,172 payment from Nigel Wright after a forensic auditor showed Duffy to be a man barely living within his means
Grenon’s forensic analysis tracked about half of the $65,000 of Senate funds that Duffy paid to friend Gerald Donohue under a series of contracts that were then used to subcontract for services like makeup or fitness training that the Senate wouldn’t otherwise pay for. But about $32,000 of that total remains unaccounted for.
Grenon resisted Bayne’s suggestion he lacked information to document it and offered to redo the analysis if the defence would provide him with more information.
Bayne was disdainful, saying there’s a “little matter about the onus” in a criminal trial being on the Crown to prove allegations, not the defence.
Bayne argued Grenon’s testimony is inadmissible because much of it is not “relevant” and amounts to a public “free for all” about Duffy’s financial life instead of an examination of facts relevant to select charges. Vaillancourt will rule on it after getting written submissions over the next seven weeks from each side.