Mike Duffy defends arrangement to pay controversial expenses

Mike Duffy said hiring his colleague Gerald Donohue as a general contractor who then paid for some of the senator's expenses the Crown now contends were inappropriate was a valid payment structure.

"As long as it's Senatemoney for Senate work, it's all 100 per cent appropriate," Duffy told on Ottawa courthouse on Friday during his fourth day testifying at his criminal trial.

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"It's probably less costly and more efficient and with a lot lessrigmarole."

Duffy has pleaded not guiltyto 31 charges of fraud, breach of trust and bribery related to expenses he claimed as a senator and later repaid in March 2013 with $90,000 fromNigelWright, who at the time waschief of staff for then prime minister StephenHarper. The trial began in April at the Ottawa provincial courthouse.

Court has heard that a seriesof Senate research contracts worth $64,916.50 were awarded by Duffy to Donohue,mostly to perform editorial, research, consulting andspeech-writing services. It was out of this fund that Donohue, through his family-owned company Maple Ridge Media Inc. (which later became Ottawa ICF), paid out chequesfor other expenses claimed by Duffy.

It's the Crown's contentionthat Duffy set up afund withDonohuetopay for some inappropriate or non-parliamentary services expenses thatthe Crown sayswouldn't otherwise have been covered by Senate finance.

Duffy's lawyer DonaldBayneasked if he was attempting to defraudthe Senate byhaving people provide services for himunder a general contract type offormat.

"No," Duffy said, adding it was a common practice.

"Did youbelieve that structure was valid?"Bayne asked him.

"Exactly," Duffy said.

Duffy described Donohueas his most important adviser, and worth the money he himself received.

"He was number one," Duffy testified. "Because you name a topic and he had some background and could find more on it."

Duffy said Donohue, who he has known since 1988 when he was director of human resources at CJOH,was his "sounding board" who provided him withinvaluable advice. He said he spoke to Donohuemany times a week, and was in constant contact with him throughemail and telephone, as theydealtwith Senate issues.

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Duffy said much of that advice he received from Donohue wasnotwritten, which,according to Duffy, was acommon practice. He said it amounted to about 200 hours a year, which Bayne estimated ataround $30 an hour. Duffy suggested Donohue was a bargain, asconsultants on Sparks Street would make anywhere from $300 to $800 an hour.

Donohue, theRCMPallege, was awarded contracts and paid "an inflated rate for the type of service purportedly provided."

"Did you get value for the work?" Bayne asked Duffy.

"Not only did Iget value, the peopleof Canada were well served," Duffy said.

Pre-signed blank travel-claim forms

Earlier, Duffy testified thathe pre-signed someblank travel-claim forms to expeditethe process of getting his expenses in to Senate administration on time, saying it was a" very widespread" practice.

"In order to assist the staff to get this thingdone expeditiously, I pre-signed a batch of forms," Duffy testified in an Ottawa courtroom Friday. "As many of my colleagues did."

During the course of the trial, court heard thatDuffy hadpre-signed a stackof blank travel claims before any details about trips had been provided on the documents.

Duffy said from the first days of the Senate, senators were told to get their claims in on time or they may have to assume the cost. Senatorshad 60 days to submit a claim.

Duffysaid he submittedone claim for $5,000 or $6,000 that was nearly rejected because Senate financesaid they received ittoo late.

"Being told you're within a whisper ofbeingon the hook for six thousand bucks makes you certain to get your stuff in on time," he said.

'It was very widespread'

Asked byBayne how common it was topre-signtravel-claim forms, Duffy said, "It was very widespreadand it was all in aid of meeting the 60-day deadline."

Hesaidhe would also pre-sign cheques for his staff to pay for bills related to the Senate and its operation.

Bayne asked Duffy if he had any intention ofcommittingafraudulent scheme by pre-signing expense forms and cheques.

"None whatsoever," he said.

Costs of attending funerals

Duffy defended his travel expense claimsfor the cost of attending a number of funerals, saying that attendance was part of his duties as a senator.

Baynequestioned his client about a series oftrips he took forfunerals thathe attended in Prince Edward Island.

Duffy said someof the funerals were for distinguished Canadians, and thathe was representing the government of Canada.

The senator also testified that themain purpose of two other separatetrips, during whichhe attendedthe wake of his cousin and thefuneral foran acquaintance, was for public businessand to meet with regional representativesabout projects related to P.E.I.