Mike Duffy trial: Day 35

Live coverage of the trial of suspended senator Mike Duffy from CBC reporters inside and outside the courtroom.

    Despite a slightly late (relatively speaking, at least) arrival, it appears there is no *immediate* throng assembled outside Courtroom 33, hungry for another round of rock-em-sock-em forensic accounting analysis, courtesy of expert witness Mark Grenon.

    As was the case yesterday, today's testimony still falls in the category of maybe-admissible-but-maybe-not, a decision that will ultimately be made by Ontario Judge Charles Vaillancourt at the conclusion of Brenon's sojourn in the witness box.

    If he allows it all to be entered as evidence, we (the media) will be able to get copies of the voluminous reports on Duffy's finances that were prepared by Grenon over the course of the investigation.

    But if he rules that it is irrelevant, unnecessary and/or needlessly prejudicial, these final days before the June hiatus will be shoved down the memory hole, and can form no part of his ultimate disposal of the case.
    It appears that I may have wildly underestimated the drawing power of forensic accounting, as the public benches are filling up nicely, although the media contingent remains somewhat more compact than we've seen on previous occasions. The defendent is also here, of course, as are the two co-counsel: Jon Doody and Jason Neubauer for Team Duffy and Team Her Majesty, respectively.
    Donald Bayne has arrived, bearing a manila envelope that at first I thought must contain some sort of incendiary legal-sized document that he was preparing to brandish in triumph/outrage at the judge, but is seemingly somehow related to our intrepid artist, Greg Banning, who I would *really* recomment to anyone out there with a hankering to have a moment in their lives captured in soft yet precise penstrokes.
    And we're back in session -- right back where we left off, in fact, with Grenon going through the papers presented to him by the Crown, who is reminding him (and, I suspect, the judge and the rest of us) exactly where his questioning had been put on pause: Grenon's explanation of his comparison of Duffy's bank and tax records, which led him to conclude that his spending appears to have outpaced his income on a fairly consistent basis.
    (I musy apologize again for the lack of specific numbers -- alhough these documents that may or may not ultimately be released publicly are currently being displayed on the courtroom overhead screens, I just can't make out the numbers from my seat. Don't worry, I'm giving you the gist based on Grenon's walkthroughs of his work.)
    A sidebar explanation: All working notes -- "everything I'm thinking," according to Grenon -- are included in the report, which provides a complete record of the process.

    We're now looking at the notes section. For a subsequent section, which apparently describes "shares" held by Duffy or his spouse --that were reported by RBC to the Canada Revenue Agency, as is standard practice.

    The report also includes an income statement for Mike Duffy Media Services Inc -- Duffy's company.
    A brief pause after the judge points to pencilled in numbers on the copy of the form that *he* has, which prompts Bayne to stalk over to peer over Neubauer's shoulder at the page in question, which Grenon assures the court he can explain.

    This leads to what is being promised to be a very short break as the Crown heads out to make copies of the handwriting-enhanced sheet of paper, while reporters gather closer to the screen to stare at the one chart still displayed on screen: the Mike Duffy Media Services Inc. Income statement. (As far as I can tell, the highest year was 2009 -- $32K -- and the low point was 2010, at $13K.
    The judge is back, and Mark Holmes is putting forward an official media request for copies of the files on screen at the moment, as -- he explains -- we're worried that we may not be able to report the numbers accurately with such fleeting access.

    Bayne grumbles that he can't tell the judge *not* to release it, but again expresses his concern over the prejudicial nature.

    Vaillancourt, however, is sympathetic and agrees that the material should be released. Thank goodness. (No idea when that will actually happen, mind you.)
    Eventually, Grenon gets to explain that the handwritten notes were to correct a few small errors in the chart -- basically, some items not ending up in the total for expenses.

    Also, it seems Duffy's company spent $129 on 'promotion", just over $8K on membership fees, $30K on salaries, $9K on telecommunications.

    The total, Grenon assures the judge, is still correct, it was just that those particular cells were blank when it came time to print it out.

    "Everything else in the schedule is correctly reflected," he promises the court.
    Grenon is currently -- somewhat laboriously -- going through the business side of Duffy's financial endeavours, which involves comparing expenses and revenue and similar such operations.

    Meanwhile, I just noticed that Sgt. Greg Horton -- who has been a fixture in Crown Corner throughout even the densest and driest testimony -- is missing from his usual seat, which is currently being occupied by a stranger. (A stranger in the House!)

    For some reason, I think this stranger is also a Mountie, but I'm not sure what I'm basing that on.
    While I understand the need to go through these spreadsheets, cell by cell, I do wish Neubauer would occasionally get Grenon to share any tentative conclusions to which he might have come as a result of his analysis.
    Even Duffy looks like he's losing the thread of this testimonial tangent on how the tax laws treat dividends.

    Duffy arrives for Day 35 of trial

    CBC.ca PlayerSuspended Senator mike Duffy and his lawyer Donald Bayne arrive for day 35 of Duffy's fraud trial.
    The income tax statements provided by CRA indicated some disposition of shares, Grenon notes -- in 2008,.just over $8K in Research in Motion shares; the following year, there were extremely nominal returns on shares in Asbestos Inc and Nortel -- which worked out to a loss of over $55K in total, which actually *does* elicit a low hum of surprise amongst the media furiously taking notes.
    Having reviewed Senator Duffy's bank and tax records, Neubauer begins, what can he tell the court on Duffy's financial status over the years in question (2008-2013), in general?

    Bayne interjects to question why the court should hear "this man"'s opinion on anything, given that it wasn't previously disclosed. Neubauer points out that this *is* a voir dire, which sends Bayne into even higher dudgeon over finding out *mid-trial* what "this man" thinks; the judge, however, nods his approval at Neubauer.

    Grenon's conclusions reflect what he told the court yesterday, really: Duffy was spending more than he was taking in, and sustaining his lifestyle with the line of credit, as well as the equity in his home
    Specifically, Grenon explains, it was the combined remortgaging of the Kanata property for a total of just over $130K.

    "That's how the lifestyle was sustained -- by refinancing the mortgage," he sums up.
    It also sounds as though Duffy was using his Kanata address for his tax returns up until 2013, when it changed -- according to tax documents -- in 2013. (There do appear to be a few years missing from Grenon's chronology, though, so it seems possible that it was done earlier.)

    Although apparently, the listed province of residence for Duffy -- which is indicated by the taxpayer -- was also Ontario right up until 2013 as well.

    And yet, wasn't there a whole bit of housekeeping business way back in early 2009 where Duffy specifically brought up -- to Senate admin -- how he wanted to file his taxes for Prince Edward Island?





    Bayne -- who is either actually in perhaps the foulest temper we've seen him radiate yet, or doing an excellent job of appearing to be so -- objects to Neubauer getting Grenon to simply read tax return data into the record, which, he suggests, is not appropriate in voir dire and *also* doesn't demonstrate anything on the part of the witness but his reading skill.

    Neubauer seems ready to back down on this spat, and assures the judge he's prepared to shift to a new issue.

    "Good," Vaillancourt tells him.

    It appears that Duffy *also* changed the address of record for Mike Duffy Media Services Inc from his Kanata home to Friendly Lane in late September 2013.

    After plumbing the depths of Grenon's findings on Duffy's finances, Neubauer changes tack: it's time for a deep dive into the analysis resulting from his review of two companies affiliated with Gerald Donohue: Maple Ridge Media and Ottawa ICF.

    In those cases, Grenon tells the court, he was tasked with conducting a source and use analysis of the bank accounts, as well as trace a $10,000 payment to the company from the Senate that subsequently allegedly went to Matt Donohue.
    Between March 31 2009 and December 2012, those two companies brought in just over $1.2 million -- the bulk of which, according to Grenon's chart, coming from business income, as well as a smaller chunk from otherwise unspecified transfers -- and, as the third highest, $65K from the Senate of Canada. (There is very little "unknown," he points out -- this *is* the pie, as he had all the payor and payee information.)

    To the other side of the balance sheet, then, and the expenses listed by the Donohue-affiliated companies, nearly half of which went to construction costs, with another sizeable chunk going to Matt Donohue, and a smaller portion to Gail Donohue; there was another $100k that just went out to an unspecified payee, and eventually, $25 K in "alleged payments to the benefit of Senator Duffy."
    Grenon, too, was briefly baffled by the cheques paied to "G. Donohue," given that it could mean either Gail *or* Gerry.
    Grenon then goes through the full list of cheques paid, as his report puts it, allegedly "for the benefit of Senator Duffy," which includes all the names we've already heard, from the personal trainer's company to Bill "Rodgers" Kittleburg, which totals just over $25 K. When you add in the cheque to L. Ian Macdonald, the final result is $33 K, he confirms -- and no, I'm not sure why that cheque wouldn't have been counted in the initial total.
    Yikes: I completely forgot to mention we were going on our usual mid-morning break. Which is now almost over.

    On the plus side, i've now learned that adjusting the air conditioning to something less than meat locker-ready requires calling Thunder Bay, where someone will alert to Toronto, which will dispatch a courthouse staffer to nudge the dial in the approved direction.

    We're back in session -- well, in the sense that the judge is here, although until just this second, the entire defence section was missing, as we're virtually all the attendant media and spectators. For 30 seconds or so, it was just me, the artist, the Crowns and the witness. So peaceful!
    After the room repopulation is complete, Neubauer sends Grenon -- and the rest of the legal ensemble -- scrambling through his files for a statement from Scotiabank, on which he -- Neubauer, that is -- promises not to spend *too* much time, which is a relief to those of us in the cheap seats, who can't make out a single word thereon.

    We -- or, at least I -- *do*, however, recognize the parade of photocopied cheques that seem to accompany it from the previous appearance by Matt Donohue, son of Gerald, who ran the construction side of the company.

    Either my eyesight has mysteriously improved, or they've *finally* figrued out how to enlarge the on-screen projection, because I'm actually able to follow along now -- we're back at the Maple Ridge/ICF deposit pie, Nd I can now see that, yes, just over $65 k came from the Senate, with an additional $40 K via "unknown" deposits, although I gather there's no immediate reason to find that suspicious.

    Anyway, eventually, Grenon uses the cheque numbers, the "free balance" report from Duffy's office to confirm a $10,500 payment from the Senate to Maple Ridge Media in April 2009.

    Also, apparently, transactions that occur outside the regular fiscal cycle are referred to as taking place in "peiod 13", which sounds like the starting point for a genre-busting tale of a near-future accounting alternate universe, possibly even with YA appeal.
    It appears that this process is intended to outline exactly when those Senate cheques were deposited in the Maple Ridge Media or Ottawa ICF bank accounts, which I'm sure is necessary for what Neubauer is endeavouring to accomplish here, but has not yet provided any new information on the payments to those Donohue-affiliated companies.
    I just noticed that Duffy's wife Heather isn't in the courtroom -- not at the moment, that is; she was definitely here earlier, but it is unusual for her to miss even a minute of the proceedings.
    Apologies for the uncharacteristically infrequent updates, but Grenon is still going through his charts -- at the moment, detailing the breakdown of those payments allegedly for the benefit of Senator Duffy, including payee, amount and date of deposit.

    Once again, we're going through Maple Ridge Media cheques -- specifically, the ones that allegedly were payments "for the benefit of Senator Duffy," and which, somewhat unhelpfully, are written -- or, at least, signed -- by 'G. Donohue," which could, of course, mean Gerald *or* Gail, although as Gerald allegedly had no official role within either company, or, indeed, signing authority over its accounts, logic would dictate that it refers to Gail. It does not, however, appear to be her handwriting.

    I mention all this only because I feel like we may have forgotten the testimony given by Matt Donohue back in April, and it is useful to keep it in mind when looking at these records.
    I note that, again according to the Maple Ridge Media accounts, there were also just over $50K in "transfers - out" with no further information.

    Interesting, there is just one cheque -- for $6K -- to "Gerry Donohue", with the remaining ten all made out to "G. Donohue", and paid to a joint account held by both Gs.

    As Grenon checks and rechecks his figures for the total amount of money that went to "the Donohue family" -- Gerald, Gail or Matt -- as over $100 K, which prompts Bayne to grumble that they can't be considered a collective like that. Judge Vaillancourt, however, doesn't seem to have a huge concern over the phrasing, and notes that this does indeed represent four categories of payments: to Matt, to Gail, to Gerry or to "G".
    Back to the $10,500 cheque from the Senate to the Donohue company in April 2009, and a subsequent cheque for $10,500 that went to Matt Donohue.

    "There's always a problem when you do the tracing, with the commingling of other money," Grenon acknowledges, which is why he can't confirm that any of the $10,500 cheque ended up in the $10,500 payment to Donohue, although the dates do seem to correlate, he says -- the Senate cheque was dated April 22, Nd deposited on April 30, while the payment to Matt Donohue was dated April 29.

    That said, Grenon *eventually* concluded that the Donohue cheque was actually a pattern of rumenration that he received monthly, as it works out to four times the monthly total.

    That has to have been a nice pre-lunch surprise for Duffy and the defence team.
    Wait, unless it *isn't* a delightful surprise for the defence. Perhaps the Crown is playing chess?
    (I say that mostly because Grenon includes that very same conclusion in his report, so it's not like Neubauer should have been taken aback at the lack of a definitive link, and plausible alternative explanation.)
    And with that, it's lunchin' time!

    Back at 2:10pm for more examination-in-chief!
    Before the afternoon session gets underway in earnest, a brief bit of housekeeping business, as Bayne formally makes a requst for a playback of a short portion of the witness's examination-in-chief, which requires the consent of the judge.

    Not surprisingly, Vaillancourt cheerfully gives his permission, at which point the witness is recalled and the questioning resumes.

    Note: We're expecting the testimony to soon wend its way to that $90K payment associated with former chief of staff Nigel Wright, although one just never knows for sure how events will unfold. In any case, stay tuned.
    And just as I hit post on that caveat, Neubauer directs Grenon to that very payment -- and specifically, the trace analysis of the money received from Wright, and look at the information around the mortgage around the time that payment was received.

    Although we haven't yet gotten a copy, the flow chart of the Wright-Duffy transaction has now been duly submitted as a voir dire exhibit -- which means it hasn't yet been declared admissible -- and is now being displayed on screen as Grenon provides his conclusions: Approximately 87 per cent of the money received by Wright went to reimburse the Senate, while money related to the remortgaging went to the Duffy line of credit.
    As previously reported, the $90 K transfer -- which was done by wire, and was for just a wee bit more than that -- first went to Duffy's lawyer at Nelligan O'Brien Payne, then to Duffy's account, which then paid the same amount, by cheque, to the Received General of Canada.

    Grenon is able to confirm, from the numbers and using basic math, that virtually all of the money the cheque from Nelligan Payne to Duffy went to the Receiver General.
    Another brief break to fetch papers for Bayne, and for Bayne to listen to that bit of the tape -- five minutes total, both lawyers pledge, as the judge hesds back to his thinking chair in the back hall. (I hope he has a book, and a cushion.)
    We're back -- yes, again -- and as the flow chart remains on screen, Neubauer wants Grenon to detail his methodology, as far as tracking the progress of that payment from Wright's account, to Nelligan Payne, to Duffy and, finally, to the Receiver General, which he does.

    For those of you updating.a timeline: March 26, 2013 was the date of the cheq from Nelligan Power to Duffy', which appears to have been cashed the same day -- by teller, according to Grenon, and not through an ATM. (I don't even know if you *could* deposit a $91K cheque via ATM.)

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