Mike Duffy trial: Day 60

The Mike Duffy trial resumes and the senator takes the stand to face his second day of cross-examination. Follow CBC News for all the latest coverage.

    #Duffy trial returns today with the senator facing another day of cross-examination. Could get testy. Live blog: CBC.ca/1.3368766 #hw
    We're back! Holmes is up. Here we go.
    When we broke yesterday I was asking some questions about your diary. What are the nature of the redactions? Did you provide the original to Nigel? Well the original is electronic. I wanted to tell him the number of days I was on PEI. Our purpose in going through this was to show him where I was on each specific day. The other stuff of where I went, who I met, was not pertinent, as you can see we didn't have time to do it properly so there was lot of personal stuff in there. He wanted to see your worksheets? I told him the 66 days that was being bandied about was a lie. I gave him the days, he wanted to see my documents.
    You used white-out and the black marker. Did you do it yourself? We were both doing it together in Charlottetown. It was personal information? We just wanted to provide materials to show where I was on what days. Duffy says it as a rush job, trying to go as quickly as we could; wanted to remove notes about caucus, other things we didn't want in circulation. You ran out of time? That's correct. Duffy says anything that wasn't relevant, we wanted to take out. Private business information pertaining to yourself? We didn't have enough time.
    Do you appreciate that because we have the original copy, you can hold this up to the light and decode? I have nothing to hide! I was just trying to be discrete about caucus information, I didn't care if he saw some information. I knew he was discrete. The stuff about me doesn't matter, but I didn't want the PMO to see somethings. Duffy says McQuaid and I just went through it quickly to get to purolator
    You were born in Charlottetown. You lived elsewhere. But your residency on PEI was transformed by your appointment by the PM? That's right. Did you become a resident of PEI for some purposes or all purposes? All purposes. Never the less you filed your taxes in Ontario up until 2013? That's correct. Do you have an OHIP card now? No. That occurred after senate made the prerequisite that someone have a health care in the province they represent. Duffy says my OHIP coverage was kept on the advice of my doctors; I spoke to my cardiologist when I was appointed, Duffy says he wrote a letter to the senate. Duffy says when he was appointed there wasn't a heart surgeon, or a heart institute, patients were taken to Saint John, New Brunswick. Duffy says he worked 60% of the year in Ontario, as all parliamentarians do. When I was appointed to the senate nobody said you can't continue receiving care at the heart institute. Do you do your own taxes? I have a professional do it. Do you pre-sign? No. Does the tax form ask you where you are a resident? Yes. You know you've written Ontario? Yes. My accountant all those years, Duffy told him I want my income taxes paid in PEI. He refused to do it because he said it was illegal. Your tax professional told you it was illegal to hold yourself up as a PEI resident? He told me I earned my income in Ontario. He used a baseball analogy - you earn your income in Ontario, you pay Ontario tax. He said it was illegal to claim you're a PEI resident? No that's your construction; he just told me my income was earned in Ontario, I had to pay taxes in Ontario.
    In PEI you were taxed as a non-resident through 2013? No that's not how it works. Property tax comes back as a rebate on your income taxes. Senator I'm talking about property taxes. That's what I'm talking about. Bruce Rainnie from cbc said you were the only senator double taxed. Yes but you receive a rebate on your income tax, there's no form that says 'I'm from away, I'm an islander.'
    Did you renew your passport in February 2012? Probably. Did you list as your current home address the Kanata home? Yes, probably. Holmes shows him the document that he submitted for his passport, shows Kanata address. Holmes moves on, he's liked to talk to him about MDMS. Mike Duffy Media Services. When did you incorporate that? In the 80s. Duffy says it was vehicle for other endeavours he was doing outside CTV. Paid speeches? That's correct. You earned about $300,000 a year in total. What part of that came from CTV? Over $200,000. Are you the sole shareholder? Yes I am. Following his appointment to the senate you used MDMS as a vehicle for paid speeches? That's correct. In annual filings the registered office address was Kanata? That's correct. Still is, Duffy says. Were you routinely paid about $5,000-$10,000 speech plus travel expenses? Yes. You became an employee of MDMS? I'm not a lawyer, I'm the sole shareholder, I'm the sole proprietor. What is nations speakers bureau? They seek work for speakers, they make contracts with the various groups that want to have someone come and speak; they make their own fee.
    They make arrangements for you. They ensure you're qualified? Generally when the group asks, they know what I'm about. What do you speak on? The news, Duffy says. As it pertains to the senate, your involvement with this company requires you to make disclosures to the senate? I did. Speeches are your responsibility? In general, yes. Does MDMS have any employees? No. At one point it did have a contract employee for filing and clerical work. My wife, there was a lot of paperwork. Your wife's income taxes reflect that? They do (we saw her income tax returns). How long was she attached to MDMS? 2 or 3 years. was she portrayed as a consult? I don't know. Did you have a consultant work for MDMS? I may have over the years.
    Your diary documents your paid speeches? Yes. Holmes asks who is Marilyn Cassidy? She's an agent for speakers bureau, she has her own company in Peterborough, Ont. Jeff Jacobson? He worked for NSB (speakers bureau). Now looking at Feb. 2, 2009 in the diary. At 11;45 am there's a reference to a speech that you presented that day, is that right? Right, well I thought it was at 9:30. 'Quoted $10,000 for Suma $5,000 for JA,' it says, he tried to black them out. You received $10,000 for suma - what's that? Saskatchewan urban municipalities association. What did you talk about? The news, and things relevant to Saskatchewan. It was booked 6 months in advance, Duffy says. Feb. 24, 2009. Speech to Ontario Association University Registrars at Marriott. What did you speak about? The news, that was around the time there was a report on a drop off in donations to universities. New class of wealthy people were not donating to universities. Would speaking engagement be booked before your appointment? Correct.
    Speakers Spotlight is a speakers agency; what is redacted here is 31 March 2009, speech to the insurance bureau of Canada at Rideau Club. Duffy says they're very active, trying to get people to wear seat belts, Duffy says. April 20, 2009, there's another blacked out portion. I asked you earlier why you redacted things? Because they weren't relevant to Nigel. I don't know who blacked this out. It was Mary, Holmes concedes. Duffy says we did it quickly. 'And not very effectively,' Holmes adds. Bayne say Holmes is pushing a mischaracterization; Bayne says Duffy testified that he blacked things out that weren't relevant. Duffy adds, I tried to black out caucus secrets.
    Duffy gave a speech to CAA; Duffy says he would speak to them in general terms about what was going on in the news. He was paid $5,000. Bayne says wait - this isn't blacked out. Holmes said no, no we're just trying to walk through paid speeches. The point of this exercise is to document that you charged the taxpayers for expenses related to these engagements. Duffy says no, only things that a joint purpose like the speech Nils Ling wrote for me.
    June 5, 2009. Speech to Canadian roofing contractors association. September 3, 2009. Speech to IBEW, international brotherhood of electrical workers. I spoke about news, public issues; a tribute to their senior executive who was retiring. Duffy adds that He met Andy Mooney on that trip too, special assistant to the minister of fisheries. September 23, 2009. Speech to Canadian Financing and Leasing Association - $10k for that one. The group of speeches that he just covered - were all booked before your appointment? Some yes. When we get to October 2010, those speeches were booked after your appointment? Oh yeah I'm sure. 9:30 am at October 20 national caucus on Parliament Hill. How long does it last? Until noon. you have lunch in parliamentary restaurant. You have a meeting with Bob Fife. You then had a senate sitting? Yes I should have been there. You sat until 6. Did it go later? Sometimes but you had to ask the speaker to 'not see the clock,' and if it had to go long than they'd take a dinner break and return again at 8 pm.
    Duffy notes in his diary that Romeo Dallaire suggested that department of veterans affair leave PEI. Duffy says that that would be catastrophic to PEI, huge employer on the island. Another speech in 2011, to Canadian Agriculture Association, we'll return to that one, Holmes says. April 1, 2011, speech to Canadian real estate association at the national gallery. Topic? How great Pierre Beauchamp was. May 5, 2011: Hew Williams, CADA. Duffy says he's a lobbyist in Ottawa, who represented Canadian auto dealers. He gave a speech. what was it about? always the same thing, riffing off the news. It's something fresh in their mind. You're not asking them to thing about geophysics when they spent the day selling cars.
    Canadian direct marketing association. 'They're the people that send you you're junk mail,' Duffy says. They were concerned about clamps on telephone marketing; they were concerned they they were next. Duffy says that the biggest problem they face is that their product needs to be recycled. He was paid $5,000. They covered your travel costs? That's correct. The fee might be higher or lower but they'd cover travel? Never thought of it like that. Travel is routinely covered? Yes unless I happen to be there anyways on other business.
    June 6. Eastern Regional Medical Program. A private paid speech for which you were paid for your appearance? Yes. What were you laid? Medical group, so it must have been lower. A speech to the Building owners and managers association in September, he was paid $10,000 (we heard from the organization's head during this trial). Lastly, Dec. 5, Ontario Agriculture Business Association. Topic? Headlines in the news, and the story behind the story, what's happened. You don't boast about your writing abilities? That's correct. Duffy says he can write a news story, but I'm not as good as some of the people in this room who have a flair for words. Duffy says Gerry Donohue had no roles in MDMS. Cheques were deposited into my account. I would talk to him about the speeches I was to deliver.
    Now looking at documents related to the speech that Nils Ling wrote. Duffy spoke to Canadian Federation of Agriculture on Oct 20, 2010. Rex Murphy was supposed to do this gig, but cancelled. You contacted Ling to write a short speech for you. That's right. He sends it to Duffy at 3:20 am on October 20, on the day it's supposed to be delivered at 6:30 pm. This is the day he has caucus, learns about Melanie Mercer's baby, senate sits, Romeo Dallaire floats the idea of moving veterans affairs from Charlottetown, he meets with the RCMP association and then he is supposed to give the speech that evening. So you had little time to edit Ling's speech? Well, it was edited on the fly. You've called him a wonderful writer, but his humour is a little off is that right? He's artistic, Duffy says. Holmes says asks he wrote a joke about Abraham Lincoln's assassination? And you cut it out? Probably Duffy says.
    The speech Ling has written is 54 pages (?!). Duffy says 'that's about an hour!' There's no page numbers. It's single spaced. He says that doesn't work when you're standing at a podium. Duffy says he did some editing in Microsoft Word; he wanted to mark out stuff that sounded 'too boring.' Duffy says he heard a PEI politician give a moving speech about what he loved PEI. I thought it was great. That's why Duffy recruited him to write a speech. Duffy says he did a rush job, edited it very quickly, and cut stuff out. Duffy says he was more thorough with L. Ian MacDonald's speech, went through the wordy essay and cut things out. You put the whole thing on the Internet? Yes. What Ling provided me was perfect for the website; but people want to be entertained for 20-25 minutes while listening to the speech.
    Ling writes about Lincoln assassination, says I bet he wished he had stayed home and watched tv (?) Holmes says 'you quite sensibly,' removed it, Duffy says 'right.'
    Break for 20 min. Back soon! Stay tuned.
    We've returned to looking at the speech Nils Ling prepared. Holmes is looking at modifications Duffy made to the speech, because it was too wordy or too boring. Duffy deleted a reference to a Nobel physicist. Holmes says if you don't have a copy of this you'll be lost (oh joy).
    Duffy also removed a reference: 'because those clowns do listen,' Duffy changed it 'because those politicians do listen.' So Duffy removed Abraham Lincoln and Nobel peace prize references; changed clowns to politicians. He added an opening. And add words at the end 'let's get on with show.' You commissioned a speech? I received an essay not a speech, Duffy says. There are more changes that are not reflected here, Duffy says. Duffy says the speech 'wasn't Duffy,' he had no choice but to do a cut and slash. Duffy says you can tell when you're losing an audience. Duffy says he doesn't know what legal argument you're making. This was a private business event? It sure was. You deposited the $10,000 cheque. Yes.
    October 21 Duffy writes 'thanks so much for the fast work on a great speech.' so you complimented him. And when payment comes up to directed him to Gerry Donohue? My general contractor, yes. What was the amount you paid him? I can't remember. So he contacts Donohue. You had no role in determining how much he should be paid? Gerry knew the general amount we paid speakers.
    Holmes asks, in your previous employment did you have experience filing claims? I filed travel claims like everyone else. You had decades distinguishing between work and personal expenses? Yes. I had different credit card, personal visa versus the senate Amex. I did my best to keep receipts. During your employment with CTV you were in the habit of completing claims forms? Yes but my travel was very light, most of my work was in Ottawa. The forms that you used in your past life would require you to or where you went? I assume so. The purpose of the trip. Yes. Those are features of the claim forms that you submitted to the senate? That's correct.
    There are 220 travel expense claims forms from you. I think it's 215, Duffy says. You were in the habit of pre-signing claims forms? Yes. Why? Because it was common practice, we were under constant pressure to get expense claims in. I left her my cheque book if there were discrepancies to make payments, for the whip fund and caucus fund. I trusted her totally to fill out the forms properly. There was on claim that had 40 pages. That said to me that everyone was being done thoroughly, and according to senate rules. I think I got three phone calls total over four years with some questions about travel claims. One was about claiming 5 or 6 km over. I was always within the rules. Duffy says they were quite thorough, if there was a problem it would have been flagged to me.
    In your earlier testimony you told us some of the claims were over 40 pages. When did you learn there was such voluminous correspondence? When the senate clerk sent me my file before it was sent to Deloitte. I also got a phone call from senate administration about my trip to visit the Saxtons. They wanted to ensure that he wasn't just visiting his family, wanted to spare him embarrassment. Duffy said nobody had ever flagged a problem to me, if there was something big they would have called or met with me.
    When people starting saying I had a 'pattern of deception,' I said how could that be - look there are 40 pages to some of these claims. Duffy says some of his claims were raised (because they pointed out he had forgot to claim some per diems). Some claims were lowered, but they were $2. Did you claim per diems in Florida? Yes they were claimed in error by my assistant, it's human error! It happens, we all make mistakes. I accept responsibility. So you didn't check your pre-signed travel claims? I scanned them, Duffy says.
    You claimed over $400 in per diems while in Florida. That was an error, as soon as I found out I offered to repay it. This claim was made by Scharf. But you have a responsibility to check these claims! Yes, yes I do, Duffy says. You have sign off on the bottom. Duffy says that senators all pre-signed; the speaker even had an automatic arm to sign claims. Holmes: how do you know that? Duffy says it's in the AG report, and the SARS provides a mechanical arm. To stay ahead of the 60 day deadline, I pre-signed travel claims.
    I trusted my assistant to do proper claims. Do you see any issue with pre-signing travel claims? I agree with speaker it's poor practice, but I don't see anything wrong with it. Do you consider it to be in good faith to pre-sign form? Yes and so did the speaker. You made no effort to double check forms submitted on your behalf? That's not what I said. I trusted my assistant and senate finance to go through my expenses; if there was a problem they'd call me to flag it.
    Other than the summer you were never away from Ottawa for more than three weeks? No I want to see the calendar. Duffy says I was very busy, and I didn't want to fall behind and I did what other senators did. It was all about getting your money? It has nothing to do with money. I'm sorry? You're trying to make my whole life all about money; if it were all about money I'd still be at CTV!
    You understood in a general way how your claims were being filed. Yes. They did from from your Lotus diary? I was secondary, they had their own records. What was the process, explain it to me. I would come back, I would have receipts and boarding passes in an envelope. That was taken by my assistant; I assumed she opened it up, did my claims and then sent it by internal mall to senate finance. Did she do them quickly? I frankly have no idea. Once filled out what did you understand would happen? I would receive a signature book in the senate chamber, there would be some letters, expenses, other things to sign. You'd scan them and sign.
    You're very quick to assign blame. How did you know you didn't sign some of these erroneous claims? I know from the media what Ms. Scharf said about these claims. Bayne objects, he says he was told that Scharf wouldn't be part of cross-examination. He would have asked her that when she was on the stand testifying to her role in the office. Judge says Holmes should tread lightly. Holmes says that you told us that a claim almost got rejected because it was a few days late, and it was worth about $5000. That was money wasn't it? It was about getting it in on time. That incident convinced you of the merits of pre-signing expenses claims. Yes that's what everyone did. Duffy said that he did this to get if in on time. I never did this to file a fraudulent claim, or deceive. Duffy said that there were incidents where finance people said you're not claiming enough! Did you believe your signature was needed for claims? If it wasn't there. They wouldn't look at it. They wouldn't process it without the signature. Are you expecting a senator to audit his own expenses line by line. The signature was to signal that they should audit the claim. Holmes says no the signature was to certify all the claims were accurate. Duffy says perhaps. But the signature indicated that the expenses should be audited. It's not that the senator signals that every little thing in the claim is accurate. That's why we have auditors!
    Do you think signing after the claim has been filed out is best practice? That's the purest view, yes. But pre-signing forms does not preclude staff and senate administration from reviewing claims, Duffy says. You told us on June 18, 2009 you discussed with Gary Lunn about going to the Saanich fair. Yes, says Duffy. Mr. Lunn had narrowly won the riding. He was hanging on by his finger tips? That's correct, Duffy says. During that time everyone was in election mode is that correct? Well an election can be called at any time, Duffy says. But in a minority situation it's more unpredictable? That's right. All MPs were in election mode? I think MPs are in election mode all the time, Duffy says.
    Ok let's jump ahead to the Labour Day weekend. Your daughter was performing in a play? Yes. On the 5th, which is the day before Gary Lunn's event. When did you first learn your daughter would be in the play? A day or two before the show. I sent her husband a message telling him that we were coming out for the Saanich Fair. It was purely a coincidence that the play was on at the same time that you're heading out to BC? Yes. And again when did you learn about the play? A day or two before. When did you settle you'd be going with Lunn to the Saanich Fair? June 18. You told us about going up to your hotel after the performance and seeing a message. Yes. Who was it? Some staffer with a generic names we had so many staffer. What? She was some regional organizer in BC, I don't remember her name. It was a female voice, her name doesn't ring a bell because that's not surprising there are many staff members. Do you know how much the trip to BC cost? Only what I read in the media. It was between 7 or $8,000, Holmes says. And you didn't take down the person's name who cancelled? You didn't put it in her diary. The message was do not come, do not go to the event, other arrangements have been made.
    You had Gary Lunn's cell phone? I'm not sure that I did, I don't remember. You remember testifying that you had his number to arrange a pick-up. Beyond the content of the message what did you read between the lines? That HQ didn't want me to participate in the event. Duffy says that there was a lot of things in the air, lots of speculation as to where Elizabeth May would run, that'd she'd run again Gary. And then I got this call. I thought I could help him. The decision not to go was probably made at the very top. The PM? Well he likes to keep his finger on everyone, Duffy says, it wouldn't surprise me.
    Is Gary Lunn a friend of yours. No, he was a candidate. Elizabeth May was a pretty big star, I could help him. When I got back I learned they didn't want me to distract from Gary and the torch. He was bringing the Olympics to BC! That was the message, they wanted to push up his profile. Does that make sense to you? That you'd be a distraction? Yes it does actually. Have you been to the Saanich Fair? No I've heard lots about though. It's huge! Holmes says. It's very big. Did you know there was a giant pumpkin contest? 'Are you into body shaming now?' Duffy asks. 'Are you kidding me?' Holmes asks. Judge says 'stay on topic.' So you didn't go because you got a call from an unnamed female staffer? She was someone in the regional office. You blew a lot of taxpayer money going out there? Duffy says if I wanted to go visit my family in BC I had more than enough Aeroplan points, to go out there in business class. How did you accumulate those points? By travelling on behalf of the Canadian taxpayer. Did you call Gary? What am I supposed to do, Duffy asks, call up Gary and say 'please, I really want to come!' I asked him later 'what the heck is going on?' Did that confusion arise right away or days later? Right away. The woman was just delivering a message from further up the chain. I'd save my questions for the organ grinder later, when I saw Gary. Why didn't you call him right away? What am I going to call him up and whine and say 'why didn't you want me at the Saanich Fair.' (laugher ensues, 'cause he used a baby voice). He's running against Elizabeth May. He's a busy guy.
    Lunch time back at 2:15!
    #Duffy accuses the Crown of 'body shaming,' tempers flair as the senator is questioned about his pricey trips #hw CBC.ca/1.3368766
    Holmes is asking Duffy now about the forensic accountant, Mark Grenon. Holmes reminds Duffy that he testified that he submitted an expense three days over the 60 day limit, but Nicole Proulx in senate finance accepted it because it had been held up in Senate mail. The claim is from June 2011. She wrote a letter that initially told Duffy they would deny the claim. But they're not rigid and inflexible are they? Well it's not guaranteed, you have to appeal to a committee. I didn't want to make a habit of that. Duffy confirms that this is the claim that he was talking about the other day that scared him.
    Holmes shows Duffy a Toronto Star article from November 2007. It's a news story about Hubert Lacroix being appointed to the president of cbc. Duffy accepts that he mixed up the date of his appointment. Duffy says he tried to go back and look at his date book, but there was a lot missing from his diary. Had lost months when he transferred the files to a new computer.
    Holmes is now going to review service contracts. You prepare a request for services contract, and find out if your chosen contractor is available. In the form you specify who you wish to contract. Duffy says wait can I have a copy of a form. Holmes says sure. Duffy says sorry I don't want to hold you up. Holmes says no problem I'm not going anywhere.
    In general, you specify the party you wish to contract, time limit and upper limit of the cost. This is delegated to your staff? That's right , my EA in Ottawa. My policy advisor in Charlottetown doesn't do this sort of thing, she doesn't fill out these types of forms. Holmes says the form is only two pages long. The contracting party is then contacted by senate staff? That's right. So then a contract is established between the contractor and the senate? That's right. You have to review the contracts because you'll later certify that the work was done, Holmes says. That's correct. We're looking at the Eastern Consulting Contract; 22 hours at $125 an hour. Do you remember being asked if the work was done; it's not verbal, they send you a form and you have to okay the invoice, Duffy says. And then HR processes payment? That's right. Did you encounter any issues setting up this contract with Eastern? None that I can recall.
    Holmes is now bringing up the Senate ageing reports. Were you aware of the senate banking committee's report from 2006 that existed before you appointment? Yes. Were you aware of the (other) Senate ageing report released in 2009? 'Demographic Time Bomb' Yes. He says it was a topic of discussion among new senators as a positive thing the senate can do. Duffy says the study was important, it led to legislative changes. Many issues were not address previously addressed; the report got media. In successive budgets, the department of finance has included some recommendations. TFSAs and increased RRSP contribution room. The report was also addressing the issue of mandatory retirement. Duffy says and you saw how Harper moved retirement date to 67. That was politically contentious. The 67 age is rooted in the banking committee report. Duffy says it shows that things can happen, not all reports have to sit on a shelf.
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