Harper Said to Name Novak Top Aide After Wright Resigns

Photographer: Sean Kilpatrick/THE CANADIAN PRESS via AP Photo

A file photo shows Nigel Wright, now former chief of staff for Canadian Prime Minister Stephen Harper, in Ottawa during November 2010. Close

A file photo shows Nigel Wright, now former chief of staff for Canadian Prime Minister... Read More

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Photographer: Sean Kilpatrick/THE CANADIAN PRESS via AP Photo

A file photo shows Nigel Wright, now former chief of staff for Canadian Prime Minister Stephen Harper, in Ottawa during November 2010.

Canadian Prime Minister Stephen Harper, seeking to limit damage from the first scandal to touch his inner circle, named his longest-serving aide to replace former chief of staff Nigel Wright.

Wright resigned yesterday amid an ethics probe into a C$90,000 ($87,500) payment he made to Conservative Senator Mike Duffy to cover the repayment of expenses that Duffy improperly claimed. Ray Novak, Harper’s principal secretary, will take over from Wright, a person familiar with the decision said on condition they not be identified because the appointment hasn’t been made public.

An expenses controversy has dogged Harper’s ruling Conservative Party in recent months by implicating his lawmakers in the Senate, an unelected body whose members are appointed by the prime minister. By claiming Wright, the scandal has moved closer to Harper than any since he took power in 2006, said Nik Nanos, an Ottawa-based pollster.

“One of the reasons Harper has been politically successful is that he has been untouched by controversy,” Nanos, president of Nanos Research, said by e-mail. “I believe this is the first time something controversial has been linked inside the prime minister’s office.”

Harper’s office acknowledged last week thatWright wrote Duffy a personal check to help him reimburse the Senate for disputed housing claims.

‘Public Interest’

Wright “was acting in the public interest,” Harper said in a statement yesterday. The prime minister’s office said May 15 that Wright helped Duffy because the lawmaker was unable to pay back the funds immediately and the chief of staff didn’t want taxpayers to foot the bill.

“In light of the controversy surrounding my handling of matters involving Senator Duffy, the prime minister has accepted my resignation,” Wright, 50, wrote in a separate statement. “I accept sole responsibility. I did not advise the Prime Minister of the means by which Senator Duffy’s expenses were repaid.”

The controversy coincides with Harper’s Conservatives trailing in public opinion polls for the first time since the 2009 recession. A Nanos Research poll released April 12 found the Liberal Party with the support of 35.4 percent of voters, compared with 31.3 percent for the Conservatives. That’s a reversal from January, when the Conservatives had 34.3 percent support, compared with 27.6 percent for the Liberals. Elections aren’t scheduled until 2015.

‘Get Legs’

“There’s enough time to put this behind him but they can’t let it get legs,” Nanos said.

Novak has worked as a political aide to Harper since his return to federal politics in 2002. He served as Harper’s executive assistant before his promotion to principal secretary in 2008.

Duffy, 66, has said Senate rules allowing for reimbursement of housing and travel expenses to lawmakers whose primary residence is more than 100 kilometers (62 miles) from Ottawa were unclear, a statement corroborated in a Deloitte LLP audit commissioned by the chamber and released May 9. In a statement the same day, Duffy said he claimed the expenses in “good faith” and won’t seek to have any part of his repayment returned to him.

Duffy, a former reporter and broadcaster appointed to the Senate by Harper in 2009, quit the Conservative caucus May 16, saying in a statement he will sit as an independent senator “pending resolution of these issues.” Senator Pamela Wallin, another former broadcaster appointed to the Senate by Harper, announced a day later that she also left the Conservative caucus until an audit of her travel expenses is complete.

Private Equity

Wright, a one-time adviser and speech writer to former Prime Minister Brian Mulroney, was a managing director at Toronto-based Onex Corp. (OCX), Canada’s largest private-equity firm, before becoming Harper’s third chief of staff more than two years ago. At the time, he said he was taking temporary leave from Onex until January 2013.

Wright, who has been an organizer with the Conservatives since at least 1983, also resigned from the boards of Hawker Beechcraft and Spirit Aerosystems Holdings, two Onex units, to join the prime minister’s office.

Before joining Onex, he worked as a lawyer at the commercial firm Davies, Ward, and Beck.

Values Align

Wright told lawmakers at a hearing before taking the job that his values “align” with the prime minister’s “in every single way.”

Wright was chief of staff during a period where Harper headed a majority government, a luxury previous chiefs of staff didn’t have. During this time, Harper has shifted policy toward global competitiveness issues and pressed ahead with efforts to bolster business investment, as the country’s economy struggles to build steam amid tepid demand for exports and slowing consumer spending.

That policy agenda has included legislation to expedite the environmental review of Enbridge Inc. (ENB)’s Northern Gateway pipeline and other resource infrastructure projects.

To contact the reporters on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net; Theophilos Argitis in Ottawa at targitis@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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