R v Duffy - Crown submissions for counts 29-31

1

ONTARIO COURT OF JUSTICE(East Region)

BETWEEN:

HER MAJESTY THE QUEEN

-and-

MICHAEL DUFFY

Crown`s Submissions on Counts 29-31

Mark HolmesDeputy Crown Attorney

Jason Neubauer Assistant Crown Attorney

Ministry of the Attorney GeneralOttawa Crown Attorney`s Office161 Elgin St, 3rd FloorOttawa, Ont.K2P 2K1

Tel:613-239-1200Fax:613-239-1214Overview of Senator Duffys Receipt of $90,000 from Mr. Nigel Wright

Overview of Sen. Duffys decision to seek and receive payment for Nigel Wright1. Nigel Wright called Senator Duffy on the evening of February 19, 2013, with an update he believed would please the senator: That the resolution and repayment of his expenses would not jeopardize Sen. Duffys constitutional eligibility to represent Prince Edward Island in the Senate. Sen. Duffy was indeed pleased to hear that; however, Sen. Duffy met the removal of that barrier to repayment with the imposition of another. He told Mr. Wright that he could not afford to repay the money. It was a remark that Mr. Wright ignored for the time being but it was a milestone. It was the first time Sen. Duffy had thrown personal remuneration into the mix and it would ultimately be that facthis solicitation and acceptance of moneythat would form the basis of the charges against him. 2. While several people were engaged in the dealings to sweep away the expense scandal, it was Sen. Duffys solicitation of funds and acceptance of Nigel Wrights money that elevated his conduct to the level of a criminal offence. It is important to bear this focus in mind given the breadth of cross-examination undertaken by the defence and the evidence of Sen. Duffy in this matter. 3. Sen. Duffy went to great lengths in his attempts to portray himself as the victim of a concerted, persistent and determined effort to see his expense scandalwhich had become a serious problem for the Conservative governmentgo away. The theory he advanced is that the Prime Ministers Office, with the obedience of the Conservative leadership in the Senate, forced Sen. Duffy into the mistake-and-repay scenario, notwithstanding the opposition and personal cost faced by Sen. Duffy. They, he says, simply would not take no for an answer and exerted any and all pressure required to overcome his will. 4. The conception of Sen. Duffy as a victim in this scenario is of course untrue. 5. While the PMO had compelling interest in seeing the Duffy expense scandal resolve, so did Sen. Duffy. He realized the strength he had in the negotiations and exercised that power to extract the agreement that suited him best. That included someone else paying him more than ninety-thousand dollars.6. Sen. Duffys conduct as outlined below reveals the exercise of his will in arriving at the agreement that saw him receive $90,172.24 from Nigel Wright:i. Sen. Duffy misled Mr. Wright regarding the procedure he followed to claim a secondary residence allowance. He referred to the Primary Residence Declaration he submitted and referred to it as a trap. Sen. Duffy described the NCR living expense claims procedure to Mr. Wright as follows:Once you fill out that form and submit it, you get an allowance for the NCR home. Mike says this is a trap. Trial Exhibit 43(a), Emails from Nigel Wright, vol. 1, Tab 26, p. 92 Sen. Duffy did not tell Mr. Wright that submission of the form did not trigger any payment at all. He did not tell Mr. Wright that he submitted Travel Expense Claims to trigger the secondary residence allowance. Evidence of Nigel Wright, Aug. 12, 2015, p.101, l.1-22 ii. Sen. Duffy asked that Mr. Wright take steps to see that the Senate treated him differently from Sen. Brazeau and Sen. Harb in its examination of expenses. Mr. Wright agreed to undertake this on Sen. Duffys behalf and was successful. Sen. Duffy was pleased.Evidence of Nigel Wright, Aug. 12, 2015, p.14, l.30 p.16, l.8 iii. Sen. Duffy told Mr. Wright on February 11 2013 that he would agree to repay his NCR expenses on two conditions: (1) his constitutional eligibility to sit as a senator from PEI would not be compromised, and (2) that the PMO accept and support the position Sen. Duffys claim to the expenses was a mistake caused by lack of clarity in the rules.Evidence of Nigel Wright, Aug. 12, 2015, p.21 N.B.:This appears to the genesis of the mistake-and-repay scenario, which was in fact proposed by Sen. Duffy himself.iv. Later that evening, Sen. Duffy sent an email to Mr. Wright containing talking points provided by Sen. Duffys lawyer, Janice Payne. Among those points are the following:

Trial Exhibit 43(a), Emails from Nigel Wright, vol. 1, Tab 12, p. 46

v. Upon learning of the February 11th letter co-authored by Sen. Lebreton and Sen. Cowan, Sen. Duffy emailed Mr. Wright, asking What does Marjorys letter mean for our talks?Trial Exhibit 43(a), Emails from Nigel Wright, vol. 1, Tab 10, p. 40

vi. Sen. Duffy approached Prime Minister Harper at the conclusion of the Conservative caucus meeting on February 13 2013, without notifying Mr. Wright or making any attempt to involve him in the conservation. He did this to plead his case with the prime minister. Evidence of Nigel Wright, Aug. 12, 2015, p.21 vii. Sen. Duffy, through counsel, presented the PMO with his list of demands in respect of their agreement. Here are Sen. Duffys demands:


viii. Sen. Duffys above noted list of demands excluded any reference to the conditions Mr. Wright was seeking, namely that:1. Sen. Duffy repay the NCR expenses;2. Sen. Duffy stop submitting claims for payment of NCR expenses;3. Sen. Duffy stop suggesting that he was entitled to compensation for his Ottawa expenses.Evidence of Nigel Wright, Aug. 12, 2015, p.41, l.19-32 ix. Sen. Duffy insisted on the drafting and use of media lines that met his approval, as illustrated by the following email from his lawyer, Janice Payne:




x. Sen. Duffy insisted that he be made whole in respect of the repayment of his NCR living expenses.xi. Sen. Duffy ultimately agreed to the repayment scenario.xii. On February 22, 2013, Sen. Duffy went on television and told the Canadian public that he may have made a mistake in claiming payment for his Ottawa living expenses and intended to repay the money. Trial Exhibit 73 & 73(b), CBC News Interview, Feb. 22, 2013 (video & transcript)xiii. Sen. Duffy persisted in his efforts to see his removal from the Deloitte audit. Evidence of Benjamin Perrin, Aug. 20, 2015, p.94, l.26 p.95, l.10xiv. Sen. Duffy explicitly sought assurance from the PMO that his matter would not be referred to the RCMP. Trial Exhibit 43(a), Emails from Nigel Wright, vol. 2, Tab 12, p. 328 xv. Sen. Duffy agreed to accept and in fact accepted $90,172.24 from Nigel Wright.xvi. Sen. Duffys May 15 2013 draft letter to the Senate Ethics Officer fully supports the reality that he willingly accepted Nigel Wrights $90,172.24. While Sen. Duffy professes to be uncertain of how to characterize the payment, he expresses no doubt whatsoever of his voluntary participation his the receipt of the money.Trial Exhibit 47(a), Additional email including Sen. Duffy and Mr. Chris Woodcock, Tab 8, p. 10-117. Sen. Duffy and the Prime Ministers Office approached the expenses problem from different perspectives. Nigel Wright outlined the PMOs perspective thusly: a. all members of the Conservative caucus are members of the Conservative governments team, and their conduct reflects on the reputation of the party and the government;b. Sen. Duffys conduct in seeking payment for his Ottawa living expenses was morally wrong, even infuriating, and reflected poorly on the Conservative government, in particular given the sensitivities surrounding expenses;c. PMO was interested in ensuring that Sen. Duffy repaid the money and stopped claiming it, and in the containment of the fallout of the matter so as to limit any further disrepute brought upon the Conservative government.8. Sen. Duffys interest in the matter clearly centred around his eligibility to sit as a senator, his reputation and his personal financial situation.9. Though their goal was common, their perspectives diverged. The divergence in their perspectives led to repeated disagreements along the way, but ultimately it was Sen. Duffy who insisted on being paid personally in respect of the repayment and it was Sen. Duffy who accepted the funds given to him at his request. Sen. Duffys decision to claim payment for his Ottawa living expenses10. Sen. Duffy testified that Sen. David Tkachuk told him to submit claims for his Ottawa living expenses, including the monthly accommodation allowance and per diem allowances. This, testified Sen. Duffy, was the fallout from a column written by University of Prince Edward Island professor David Bulger. Sen. Duffy testified that Sen. Tkachuk told him that he must not leave any light between himself and the other Atlantic Canada conservative senators, and so he must claim all living expenses just as those senators did. The rationale, according to Sen. Duffy, was that a difference in his claims practice would only fuel the controversy surrounding his eligibility to sit as a senator from PEI. Sen. Duffy testified that as a result of this conversationand contrary to his disinclination to ever claim per diemshe dutifully claimed repayment for his Ottawa living expenses. To be more specific, Sen. Duffys evidence is that he would go on to claim more than $80,000 in public money to hold at bay the criticism of a university professor (a professor whom according to Sen. Duffy nobody took seriously) who had written an article challenging his constitutional eligibility to sit as a senator representing PEI.11. The Crown contends that Sen. Duffys explanation for his decision to claim Ottawa living expenses is absurd. It is inherently absurd to suggest that Sen. Duffy would decide to claim Ottawa living expenses in perpetuity (totalling more than $80,000 by his fourth year in the Senate) to fend-off criticism of a professor whom nobody took seriously.12. The internal flaws of that evidence are compounded by its inconsistency with other evidence. For example, in the early stages of discussion on resolving the burgeoning expense scandal, Sen. Duffy wrote the following email to Sen. Tkachuk:

13. Sen. Duffys assertion in his February 7 2013 email that this is the first time a concern has been raised with me by anyone is inconsistent with his testimony at trial that it a concern about his eligibility to moved him to claim his Ottawa expenses in the first place. Sen. Duffys differing statements cannot honestly co-exist; at least one of his statements must be untrue. 14. A further difficulty with Sen. Duffys evidence that he claimed Ottawa living expenses on the suggestion of Sen. Tkachuk is the information Sen. Duffy chose to provide Sen. Tkachuk as the basis for Sen. Tkachuks opinion. More important is the information Sen. Duffy chose not to share with Sen. Tkachuk, including:i. His PEI property was a cottageii. While there was hydro service to his cottage, it was cut-off in the winteriii. He held an Ontario health card15. Se. Duffy was apparently content that Sen. Tkachuk be misled into a state of belief of the facts that would support a view that he should claim his Ottawa living expenses.

Charges

Overview of Charges

16. Senator Duffy is charged with three offences in respect of the money provided to him by Nigel Wright, reproduced as follows:

Elements of the Offences

17. The following constitute the elements of the offence contained in s.119(1)(a) of the Criminal Code of Canada:i. Being a Member of Parliamentii. Accept, obtain, agree to accept, or attempt to obtainiii. Any money or valuable considerationiv. Directly or indirectlyv. For himselfvi. Corruptlyvii. In respect of anything done or omitted to be doneviii. In his official capacity

18. The following constitute the elements of the offence contained in s.121(1)(c) of the Criminal Code of Canada:i. Being an officialii. Accept a benefit iii. From a person who has dealings with the governmentiv. Without the written consent of the head of the branch of government of which he is an official

19. The following constitute the elements of the offence contained in s.122 of the Criminal Code of Canada:i. Being a public officialii. Acting in connection with the duties of officeiii. Breached the standard of responsibility and conduct demanded of him by the nature of that officeiv. By conduct representing a serious and marked departure from standards expected of an individual in the accuseds position of public trustv. With intent to use his public office for a purpose other than public good, for a dishonest, partial corrupt or oppressive purpose.

Argument

Count 29: s.119(1)(a) of the Criminal Code

Being a Member of Parliament20. Upon his appointment to the Senate of Canada in January 2009, Senator Duffy became a Member of Parliament and remained so for all material times. Accept, obtain, agree to accept, or attempt to obtain21. Sen. Duffys acceptance of Mr. Wrights money followed nearly three months of discussions between the two, at times through counsel and staff. Whether he would repay the Senate expenses and under what conditions were the topics of extended discussion; however, it was not the circumstances underlying Sen. Duffys decision to repay that forms the basis of the charges. Rather, it is Sen. Duffys solicitation of funds and acceptance of Mr. Wrights money that forms the basis of the charges. 22. During a conversation on February 19, 2013, Sen. Duffy planted the seed that would later result in Mr. Wright giving him to repay the Senate expenses. During that call, Sen. Duffy told Mr. Wright that the possibility of repayment was rendered moot by the reality that he did not have the money to repay. Mr. Wright ignored that comment at the time, but Sen. Duffy raised it again. He did so in a conversation with Mr. Christopher Woodcock. 23. The Crown relies on the argument set out above in paragraphs 1 through 9 in respect of Sen. Duffys exercise of his own free will in seeking personal reimbursement and accepting payment $90,172.24 from Nigel Wright. 24. The key events which reveal the truth that Sen. Duffy actively sought the payment are as follows:i. Sen. Duffy told Nigel Wright that the repayment of his expenses would be complicated by the fact that he could not afford to repay;ii. Sen. Duffy insisted on a condition that he be made whole on the repayment;iii. On March 22 2013, Sen. Duffys apparent resistance of repayment based on principled vanished upon hearing that Mr. Wright would personally pay him the $90,000. The agreement and payment proceeded quickly and easily after that.iv. Sen. Duffy in fact accepted Mr. Wrights $90,172.24, in respect of the repayment of his Senate expenses.25. The Crown contends that this element has been proven beyond a reasonable doubt.

Any money or valuable consideration 26. Sen. Duffy, through counsel, awaited and received a payment of $90,172.24 from Nigel Wright. 27. The Crown contends that this element has been proven beyond a reasonable doubt.

Directly or indirectly28. The path through which Mr. Wrights funds passed from him to Senator Duffy is well documented. Sen. Duffy received the $90,172.24 from Nigel Wright indirectly, through his counsel. The path through which the money was routed is documented in the chart prepared by Mr. Mark Grenon.Trial Exhibit 57, Flowchart Summary of Transactions Involving Nigel Wright and Sen. Duffy 29. The Crown contends that this element has been proven beyond a reasonable doubt.

For himself30. It is clear from his conduct that Sen. Duffy was of the view that he had his own interest in seeing the end of the expenses scandal swirling around him. This issue is explored in these submissions in paragraphs 1 through 9. He had his own motivation, his own agenda. Sen. Duffy made the request for payment and Sen. Duffy readily accepted the $90,172.24. There is an irresistible inference that he did so for himself.31. The Crown contends that this element has been proven beyond a reasonable doubt.

CorruptlyLegal meaning of corruptly32. The Oxford Dictionary defines corrupt as having or showing a willingness to act dishonestly in return for money or personal gain.33. Corrupt intent can be inferred from circumstances of the agreement and acceptance, including the manner in which the agreement was struck and manner in which the money was transacted.34. In Yanakis, the Quebec Court of Appeal stated the following:If the evidence can be said to show that Yanakis did anything in his official capacity in return for the cheques I would agree with the Crown's contention that the cheques were accepted corruptly. In my view it would be difficult to decide otherwise because of the clandestinity surrounding the giving and acceptance of them. As Mr. Justice Humphreys put it in the case of Howard Bateman Case Briant (1943) 29 Cr. App. R. 76 at p. 22:"Secrecy bas always been regarded as the badge of fraud." R. c. Yanakis, [1981] J.Q. No.356 (CA), at 7335. The Ontario Court of Appeal stated:That payments were made corruptly can seldom be proven by direct evidence of intention, the intention is an inference to be drawn from what was done. In this case the nature of the act in respect of which the payments were made, the amounts of the payments, the fact that they were paid in cash and no receipts were given or records made or kept lead only to one rational conclusion that is that they were made for the purpose of, and with the intention of corrupting Pike, an agent of the British Mortgage and Trust Company.R. v. Reid, [1968] OJ No. 1287 (CA), at 1136. Further, in Ohanian, the following was observed:Although no proof of evil intent was offered it should in these circumstances be implied.R. v. Ohanian, [1984] OJ No. 715 (Ont. H.C.), at 22

Senator Duffy corruptly accepted Mr. Wrights money37. The Crown contends that Senator Duffy corruptly accepted Mr. Wrights money. This position is founded upon the following evidence:a. The parties viewed the burgeoning scrutiny of Duffys expense practices as a scandal for the Conservative government and for Sen. Duffy personally;b. Sen. Duffy was motivated to seek and in fact sought his removal audit scrutiny of his expenses;c. Sen. Duffy also sought protection from potential RCMP scrutiny as part of the agreement. While Wright explicitly refused to include that in the agreement, Sen. Duffys pursuit of that term is relevant to the mental element of the offence. It reveals that Duffys intentionat least in-partwas to thwart any investigation of his own potential criminality;d. The agreement was clandestine;e. Sen. Duffy misrepresented to the public that the funds provided to the Senate for repayment were his, obtained by a mortgage, affixing his intention with the badge of fraud;f. The funds were directed through a circuitous route from Mr. Wright to Sen. Duffys lawyer to Sen. Duffy personally to the Senate, including Sen. Duffys use of a bank mortgage to support the fiction (and his public statement) that he was taking personal financial responsibility for repayment.

38. The Crown contends that the above circumstances establish beyond a reasonable doubt that Sen. Duffy received the $90,172.24 from Nigel Wright corruptly.In respect of anything done or omitted to be done39. The evidence plainly establishes the things that Sen. Duffy agreed to do and omit to do upon receipt of the $90,172.24 from Nigel Wright. Sen. Duffy agreed to do the following in exchange for the money:i. Reimburse the Senate in the identical amount ($90,172.24) on the same day;ii. Discontinue claiming reimbursement for his Ottawa living expenses (unless the rules should be modified to clearly entitle him to do so);iii. Discontinue his assertions that he was entitled to reimbursement for his Ottawa living expenses;iv. Maintain the position arrived at with his approval and collaboration (i.e., the media lines).40. The expectations of Sen. Duffys actions and omissions were coupled of course with the demands he made of the PMO in respect of settlement of the his Senate expenses.41. The Crown contends that this element has been proven beyond a reasonable doubt.In his official capacity42. All of the events surrounding Sen. Duffys decision to repay his Ottawa living expensesinclude his request and receipt of moneyoccurred within the context of his official capacity. The Crown contends that this element has been proven beyond a reasonable doubt.Conclusion Regarding Count 2943. The Crown contends that the essential elements of the offence of s.119(1)(a) as contained in count 29 of the Information have been proven beyond a reasonable doubt, and the Crown respectfully seeks a finding of guilt with respect to that count.

Count 30: s.121(1)(c) of the Criminal Code

Being an official44. Sen. Duffy is an official in the Senate of Canada. The Crown contends that this element has been proven beyond a reasonable doubt.

Accept a benefit 45. Sen. Duffy sought accepted a benefit from Nigel Wright. He sought and received $90,172.24 from Mr. Wright in respect of his agreement to repay his Senate expenses. 46. The Crown has thoroughly examined the issue of Sen. Duffys exercise of his own will in paragraphs 1 through 9 of the present submissions. The Crown relies on that position with respect to this particular element of the offence and contends that this element has been proven beyond a reasonable doubt.

From a person who has dealings with the government47. Nigel Wright provided his own personal funds to Sen. Duffy. He made that clear to Sen. Duffy`s lawyer, Janice Payne. Payment is ultimately made to Sen. Duffy in the form a personal band draft bearing Mr. Wright`s name. Below is a copy of the bank draft:

Trial Exhibit 44, CIBC Band Draft $90,172.2448. Mr. Wright testified that he made the payment in his personal capacity. He did so as part of his dealings with the government, including Sen. Duffy. 49. The Crown contends that this element has been proven beyond a reasonable doubt.

Without the written consent of the head of the branch of government of which he is an official50. It is Sen. Duffy`s receipt of a benefit (i.e., $90,172.24) that forms the basis of the this charge. Nigel Wright testified that his decision to pay that money to Sen. Duffy was his personal decision. The evidence is that the $90,172.24 was not the subject of the consent of any head of branch of government. More to the point, Sen. Duffy took no steps whatsoever to seek or obtain written consent of the head of his branch of government. He insisted on being made whole, conducted himself in a way to that was deceitful and clandestine, andby his own evidencewas entirely unconcerned about whether his receipt of money from Nigel Wright had been approved by anybody at all.51. The Crown contends that this element has been proven beyond a reasonable doubt.Conclusion Regarding Count 3052. The Crown contends that the essential elements of the offence of s.121(1)(c) as contained in count 30 of the Information have been proven beyond a reasonable doubt, and the Crown respectfully seeks a finding of guilt with respect to that count.

Count 31: s.122 of the Criminal Code

Being a public official53. There is no dispute over the fact that Sen. Duffy, as a member of the Senate of Canada, is a public official.Acting in connection with the duties of office54. All of the events surrounding Sen. Duffys decision to repay his Ottawa living expensesinclude his request and receipt of moneyoccurred within the context of his official capacity and in connection with the duties of his office. 55. The Crown contends that this element has been proven beyond a reasonable doubt.

Breached the standard of responsibility and conduct demanded of him by the nature of that office56. The following circumstances establish that Sen. Duffy breached the standard of responsibility and conduct demanded of him by the nature of the office with which he was entrusted:a. The Senate inquiry into expense claimsincluding retaining an accounting firm to review expense claimsfiled by senators attracted broad and significant public interest;b. The public would expect a senator to duly cooperate with a Senate committee inquiry of third party review of something as significant as how taxpayers` money is being spent; c. Sen. Duffy`s conduct in reaching the repayment agreement with Nigel Wright constitutes a breach of the standard of responsibility and conduct demanded of him in that his conduct motivated not by a desire to cooperate; rather, by a desire to thwart that inquiry as it related to him;d. His conducted was exacerbated by the fact that his intention to shield himself from public scrutiny extended beyond his expense claims; it also included a desire to avoid scrutiny of his very eligibility to sit as a Senator from Prince Edward Island;e. In addition to his removal from any further Senate or third party scrutiny, Duffy also sought assurance of protection from any police investigation of his expense claims;f. Sen. Duffy misled the Canadian public about the source of the funds provided to the Senate for repayment of his expense claims, asserting that he took out a mortgage to obtain the money. He led the public to believe that he was taking personal financial responsibility for repaying the money, a point he accentuated by pointing out that he had obtained a mortgage. The mortgage, however, was a fiction intended to cover-up the fact that Nigel Wright provided the funds for repayment. 57. The Crown contends that this element has been proven beyond a reasonable doubt.

By conduct representing a serious and marked departure from standards expected of an individual in the accuseds position of public trust58. The serious and marked departure from what is expected of a senator is evident from the conduct itself, as outlined above. In particular:a. Sen. Duffy covered-up the true source of his repayment money, and in that effort went as far as to open a mortgage to support the fiction that he was taking personal financial responsibility for repaying the money;b. Sen. Duffy`s intention was to thwart scrutiny undertaken in respect of issues of significant public interest: how public money is spent, and qualifications to sit in the Senate;c. Sen. Duffy sought assurance that his conduct in seeking and receiving more than $80,000 of public money would be shielded from scrutiny by the RCMP.59. Sen. Duffy`s actions in seeking and receiving money to resolve the scrutiny into his Ottawa living expenses was driven by deceit, manipulation and carried out in a clandestine manner. This conduct represents a serious and marked departure from the standard expected of a person in Sen. Duffy`s position of public trust. 60. The Crown contends that this element has been proven beyond a reasonable doubt.

With intent to use his public office for a purpose other than public good, for a dishonest, partial corrupt or oppressive purpose.61. The evidence in this case reveals the following as the intention of Senator Duffy`s:

a. To hide the true source of the money used to repay his expense claims;b. To create a fiction (his mortgage) to portray his repayment as reflective of haven taken personal financial responsibility for the affair;c. To thwart the Senate`s (and as a result, the public`s) inquiry into questionable expense claims;d. To thwart any police investigation into his conduct in seeking and receiving more than $80,000 in Ottawa living expenses;e. To thwart that inquiry as it related to him, not only as it related to his expense claims but also as it may have it related to his very eligibility to sit as a Senator from Prince Edward Island.62. The Crown contends that this element has been proven beyond a reasonable doubt.Conclusion Regarding Count 3163. The Crown contends that the essential elements of the offence of s.122 as contained in count 31 of the Information have been proven beyond a reasonable doubt, and the Crown respectfully seeks a finding of guilt with respect to that count.

Documents

R v Duffy - Crown submissions for counts 29-31