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Updated: Tue, 29 Oct 2013 11:42:55 GMT | By CBC News, cbc.ca

Senator Mike Duffy's bombshell allegations raise more questions



Sen. Mike Duffy arrives to the Senate on Parliament Hill in Ottawa, Monday, October 28, 2013. THE CANADIAN PRESS/Adrian Wyld The Canadian Press

Sen. Mike Duffy arrives to the Senate on Parliament Hill in Ottawa, Monday, October 28, 2013. THE CANADIAN PRESS/Adrian Wyld The Canadian Press

As the Senate continued to mull over motions to suspend Senators Mike Duffy, Patrick Brazeau and Pamela Wallin over the expense controversy, Duffy unloaded another series of bombshell revelations Monday afternoon. 

He claimed that there were actually two cheques arranged by the prime minister's former chief of staff, Nigel Wright. The first for $90,000 to pay back Senate expenses and a second for $13,500 to pay his legal bills. 

He also claimed the Prime Minister's Office concocted a story to explain how he repaid the $90,000. The revelations raised a whole new set of questions about the ongoing scandal.

1. Who in the PMO and outside the PMO were involved in the negotiations to repay Duffy's expenses?

When the $90,000 cheque scandal first broke, Prime Minister Stephen Harper insisted Wright acted alone in paying back Duffy's expenses and that Wright's decisions "were not communicated to me or to members of my office."

But Wright himself later informed the RCMP, which is investigating the expense controversy, that he told four people, including three members of the PMO, about the cheque he was going to write to Duffy. Those people are Conservative Senator Irving Gerstein; Wright's assistant, David van Hemmen; Chris Woodcock, then director of issues management in the PMO; and Harper's legal adviser at the time, Benjamin Perrin. 

However on Monday, Duffy alleged that another top Conservative was involved.

He told the Senate that Wright arranged to have his legal fees paid and that his lawyer received a $13,500 cheque, paid by Arthur Hamilton, the Conservative Party's top lawyer. Duffy also revealed emails and the cheque stub to back up his claims.

2. Why were Conservative party funds used to pay Duffy's legal fees?

Later on Monday, the communications director for the Conservative Party told CBC News it had paid Duffy's legal fees. 

"At the time these legal expenses were incurred and paid, Mike Duffy was a member of the Conservative caucus," Cory Hann wrote.

"The Conservative party sometimes assists members of caucus with legal expenses."

Duffy himself said the funds for his legal fees came from party donors to make an embarrassing political situation go away.

3. Did Harper know about the legal fees repayment?

Harper has insisted he did not know about Wright's $90,000 payment to Duffy. 

Jason MacDonald, a spokesman for the prime minister, issued a statement reacting to Duffy's revelation about how his legal bills were paid: "Nigel Wright is on the record naming those he informed of his arrangement with Mr. Duffy, and he's assumed sole responsibility for his actions. The prime minister was not aware of the arrangement and had it been presented to him he would not have approved of such a scheme."

But while Duffy said that the $13,500 legal fee repayment was negotiated by Wright, he suggested on Monday that the prime minister had his "legal bills fully paid."

He questioned why the prime minister would do that if he believed that Duffy's expenses were improper.

"He did this because, as I have said from the start, this was all part of his strategy, negotiated by his lawyers and the Conservative party's lawyers, to make a political situation, embarrassing to his base, go away," Duffy said. 

4. Did the PMO coach Duffy on how to explain the source of the $90,000? 

Duffy claimed that the PMO, anticipating that the media would ask where he got the $90,000 to pay his expenses back, concocted an explanation. He said when the PMO heard he had been using a line of credit to renovate his home in Cavendish, P.E.I., they suggested he go to the Royal Bank of Canada and borrow the cash to pay off that line of credit.

He alleged the PMO said that he could then tell the media that he took out a loan at the Royal Bank to pay the $90,000.

"Well, that's technically correct, we took out a loan, but that loan wasn't to repay money, the $90,000 that the PMO agreed I didn't owe," Duffy told the Senate. "That line was written by the PMO to deceive Canadians as to the real source of the $90,000."

Duffy claimed that he had "reluctantly agreed" to go along with the scheme, that the script was written and emailed to him by the PMO and that the lines he would use with the media were "rehearsed with me right up until minutes before I went on television."

CBC's obtained  exchange allegedly between Duffy and former PMO staffer Chris Woodcock

"Can you confirm whether you advised the Senate Ethics Officers of any loans/gifts involved in the March 25th repayment? Trying to cover off all the angles," Woodcock, who Wright has said knew about the $90,000 payment, wrote to Duffy on midnight of May 14, the same night the Duffy-Wright $90,000 cheque story went public.

"No," Duffy replied the next morning, "Anyone who asked was told the truth: that I paid with a personal cheque on my RBC account. Did I have help? Yes from the RBC and my wife who co-signed for the extension of my line of credit."

The email raises questions about what Duffy meant when he said he "told the truth" about the RBC loan and whether he was just sticking to the story he said was created by the PMO.

5. What's in the so-called email trail that Duffy alleges will back up his claims?  

Duffy claimed on Monday that the Senate leadership, under the direction of the PMO, wanted to destroy his credibility if he ever went public about the real source of the $90,000.

"You wait until Canadians see the email trail in the hands of my lawyers and, I hope, in the hands of the RCMP," Duffy said.

Duffy said the emails between his lawyer and the PMO and its lawyers prove that "this was a setup from the start and that I am innocent."

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