International News

By Randall Palmer

OTTAWA (Reuters) - Canadian Ethics Commissioner Mary Dawson is reviewing a move by Prime Minister Stephen Harper's chief of staff to write a personal check for C$90,000 ($88,000) to a Conservative senator so he could repay housing allowances he should not have received.

News of the gift by Chief of Staff Nigel Wright, a wealthy former businessman, to Senator Mike Duffy is the latest embarrassment for Harper, whose Conservative government was elected on a promise of accountability.

Opposition politicians demanded on Wednesday an independent inquiry into expense claims made by members of the Senate, the upper house of Parliament, and said a "dark cloud of ethical failures" stretched to senior levels of government.

Dawson's spokeswoman, Jocelyne Brisebois, said the ethics commissioner is reviewing Wright's involvement in the repayment "of a senator's expenses" and is following up with Wright on his obligations under the Conflict of Interest Act.

A Senate investigation found last week that Duffy and two other senators were not entitled to housing allowances they had claimed.

Duffy agreed to pay his allowances back to the government, but because he did not have the money available, Wright cut him a check from his own account, Harper's chief spokesman Andrew MacDougall said.

Repaying the money was the right thing to do, and taxpayers were not on the hook, MacDougall said, adding that Harper had not been aware that Wright had covered Duffy's expenses.

However, in addition to federal conflict-of-interest law governing public office holders such as Wright, it appeared that Duffy might have broken Senate rules that say members cannot take gifts "that could reasonably be considered to relate to the senator's position".

"The dark cloud of ethical failures hanging over the Prime Minister's Office is growing larger," said opposition New Democratic Party ethics critic Charlie Angus. "This is a very serious charge against Stephen Harper's right-hand man. The prime minister cannot bury his head in the sand hoping it will go away."

Harper came to power in 2006 promising to clean up scandals that had dogged the previous Liberal government. Recently, however, the Conservatives have faced a series of problems of their own relating to campaign finance, misleading robocalls and now the Senate expenses claims.

They are falling in the polls and would probably lose power if an election were held today. The next election isn't until October 2015.

On Monday, the Conservatives lost a federal House of Commons seat in Newfoundland and Labrador in a special election called after a minister violated campaign financing rules.

In a statement last Thursday, Duffy insisted he had acted in good faith, and he noted that an audit of his expenses indicated there was a lack of clarity in the Senate's rules on residency and housing allowances.

Senate Ethics Officer Lyse Ricard declined comment on whether the gift broke Senate conflict-of-interest rules.

The only exception to the Senate ban on taking gifts is for those given "as a normal expression of courtesy or protocol, or within the customary standards of hospitality that normally accompany the senator's position".

Private ethics watchdog Democracy Watch issued a statement saying that in its opinion Duffy violated the Senate conflict-of-interest provision, and that Wright may have violated federal law.

MacDougall declined to provide comment from Wright.

($1=$1.02 Canadian)

(Editing by Janet Guttsman; and Peter Galloway)