OTTAWA — When a Senate finance official turned down Mike Duffy’s $300 claim for a private makeup session before a portrait photo shoot, the rookie senator threw a fit, his fraud trial heard Thursday.
Duffy was just three months into his $130,400-a-year Senate job courtesy of Prime Minister Stephen Harper.
His boarding passes featured his new title “Hon. Michael Duffy.”
There was no shortage of money for office expenses. But he would soon learn makeup wasn’t one of them.
Testimony at an Ottawa courthouse has shown Duffy was allocated nearly $60,000 to get his Senate office up and going until the new fiscal year kicked in on April 1, 2009 when he’d be entitled to nearly $150,000 in yearly research and office funds, plus another $1,700 for miscellaneous expenses.
Plus there was up to $20,000 a year available for senators whose primary residence was 100 kilometres outside Ottawa — money that Duffy, a longtime Ottawa resident, claimed after declaring his primary residence was his Cavendish cottage in P.E.I.
Also available: free travel on Via Rail; 64 return flights in Canada; a corporate Amex card for directly billing travel costs; no receipts required for taxis under $30; and moving expenses — the only perk Duffy did not use, the court has heard.
That March, Duffy told makeup artist Jacqueline Lambert to bill the senate for her $300 fee. Nicole Proulx, senate finance director at the time, testified she turned it down because makeup, she told assistant Crown attorney Jason Neubaeur, “is not considered a parliamentary function, it is considered a personal expense.”
Now the Senate’s top administrator of corporate services, Proulx testified Thursday the request was novel and had been bumped up to her for approval. She had “several conversations” with Duffy’s executive assistant and was told Duffy “wanted to pursue it further.”
She wrote Duffy an official rejection letter saying the makeup claim didn’t fall under senate guidelines for “research and office budgets” nor for “miscellaneous expenditures.”
Duffy then chose an option open to him: to go over her head and appeal to the all-powerful internal economy committee that functions as the Senate’s executive and oversees its nearly $90-million annual operating budget.
Proulx testified the Conservative senator dropped it at just before it came up for discussion on the committee’s agenda. (At the time, the committee was chaired by Liberal senator George Furey — a detail not mentioned by Proulx.)
A year later, Duffy hired the same makeup artist as the prime minister did for an event. Duffy’s lawyer Don Bayne has argued the makeup was clearly “public business” related to Duffy’s “parliamentary functions” especially as the same artist provided makeup to Harper the same day.
This time, court heard, Duffy instructed the makeup artist to bill him through his friend’s company, Maple Ridge Media, which paid her $300 fee.
Duffy is expected to testify in his own defence, but in an October 2013 speech before the Senate voted to suspend him, he said Senate finance committee “never” cautioned him on his expense claims: “Did they ever write me and ask what’s going on? Never! Not one word.”
Duffy said in that speech he was being pilloried for “small errors” that Senate finance officials had corrected. He said he filed 215 expense claims from December 2008 to Aug. 12, 2013. He said Senate finance officials “only ever decreased 47 claims, saying I had overcharged. A $13 meal allowance here or a per diem there, that sort of thing. But they also increased 28 claims, saying I had not charged the senate enough. When you do the math, 215 claims over 4.5 years, I overcharged the senate $437.35! Which, on 215 claims works out to $2.03 a claim.”
“The alleged crime was the price of a Tim’s. $2.03 per claim,” Duffy said then.
But the RCMP and Crown allege Duffy’s paper shuffle over payments for makeup and other services were deliberate efforts on Duffy’s part to skirt senate oversight, amounting to a criminal fraud and breach of trust. Duffy has pleaded not guilty to charges related to alleged misuse of Senate resources including $90,172 in living and travel claims plus $64,000 in irregular contracts for services that would not otherwise have been approved by Senate officials.
The Crown’s theory is Duffy directed payments for those services through his friend, Gerald Donohue, whose company, Maple Ridge Media and its successor Ottawa ICF (a construction service company), was hired to provide Duffy “consulting/editorial services.”
Proulx outlined documents that show Donohue and Duffy signed all the invoices submitted by Donohue’s companies, which were paid by the Senate, because they certified the “consulting and editorial” work was done.
But Proulx said under senate rules, those contracts did not cover makeup, photo reprints or framing services, personal fitness sessions or payments to volunteers.
Duffy and Proulx clashed again in 2012 when Senate officials sent Revenue Canada tax information to indicate the senate had paid Donohue for the “consulting/editorial” work.
Donohue, who was receiving disability income and not allowed to earn other income, complained to Duffy about clerical errors and that he, not his company, was identified as the contractor. Donohue said he was ending his association with Duffy’s office. As a result, Duffy angrily protested in a letter to the Senate.
“For second year in a row, senate staff have sent incorrect information to Revenue Canada concerning my editorial service contractor … They are a registered corporation. The Senate pays the company, not the company president. Somehow this simple message has not gotten through,” wrote Duffy, according to Proulx.
“Now I am left to find a new firm to do this important work. Please let me know why this has happened and when the correct info will be sent to Revenue Canada.”
Proulx wrote back a letter that acknowledged the Senate’s errors, corrected the information with the taxman, and apologized to both Duffy and Donohue. “It seemed to be an important supplier, and as you saw, I apologized profusely,” she testified.