Harper Opens Private Party Speech After Senate Scandal

Canadian Prime Minister Stephen Harper said the resignation of his top adviser and two Conservative Party senators over questions about expenses should be followed by others if they aren’t working in the public interest.

“Anyone who wants to use public office for their own benefit should make other plans or, better yet, leave this room,’ Harper, 54, told a weekly meeting in Ottawa of party members that is normally closed to the public. The speech is Harper’s first since his Chief of Staff Nigel Wright quit and Senators Mike Duffy and Pamela Wallin, both appointed to the Senate by Harper, quit the Conservatives.

The resignation of Wright two days ago brings the scandal closer to Harper than any since he took power in 2006, said Nik Nanos, an Ottawa-based pollster. Wright left after the disclosure he paid about C$90,000 ($87,500) to Duffy to settle ineligible expenses.

‘‘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.”

“I am very upset, about some conduct we have witnessed, the conduct of some parliamentarians and the conduct of my own office,” Harper said today in a speech that lasted less than 10 minutes. The Conservatives are working on tighter Senate expense rules, Harper said, and repeated his call for opposition support for legislation on other Senate reforms such as elections and term limits.

Repay Funds

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 when he resigned. “I accept sole responsibility. I did not advise the Prime Minister of the means by which Senator Duffy’s expenses were repaid.”

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.

Opinion Polls

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.

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

The spokesman for ethics issues for the main opposition New Democratic Party, Charlie Angus, told reporters yesterday he’s written to Royal Canadian Mounted Police Commissioner Bob Paulson asking him to investigate the matter.

“A secret cash payment to a public figure is a very, very serious allegation,” Angus said in the televised conference in Ottawa. “The fact that this payment was made out of the prime minister’s office demands accountability.

‘‘These actions are not only troubling, but they may violate the very laws that the RCMP is charged with upholding and enforcing,’’ Angus said.

Political Aide

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.

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.

Quit Boards

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.

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: Greg Quinn in Ottawa at gquinn1@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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