Ben Perrin didn’t just put Stephen Harper’s closest adviser in the room – he described where Ray Novak sat, and the lack of reaction on his face.

Mr. Novak was told in person twice that it was Nigel Wright who would pay the $90,172.24 expense tab owed by Senator Mike Duffy, Mr. Perrin, the former legal counsel in the Prime Minister’s Office, testified at Mr. Duffy’s fraud and bribery trial on Thursday.

It was testimony that added weight to a question that has bedevilled Mr. Harper and his re-election campaign.

Mr. Harper’s campaign spokesman, Kory Teneycke, has insisted that Mr. Novak did not know that it was Mr. Wright who paid until it was reported by CTV News. The government had said Mr. Duffy paid back the expenses.

What Mr. Novak knew is now an issue both because he is Mr. Harper’s current chief of staff, and because he is known to be so close to the Conservative Leader.

Mr. Teneycke, notably, said last week it is “unfathomable” that Mr. Novak knew about the payment but did not tell Mr. Harper. And Mr. Harper has always stated he did not know about Mr. Wright’s payment until it was revealed on the news in May, 2013.

On Thursday, Mr. Harper said he has confidence in everyone who is still working for him – and continued to assert that Mr. Duffy and Mr. Wright, his former chief of staff, were the two people responsible for the affair.

Mr. Perrin’s testimony was, effectively, a confirmation of what he was expected to say: He had told RCMP investigators that Mr. Novak knew about the payment, and his statement to police was read at Mr. Duffy’s trial on Tuesday.

But on Thursday, he described the circumstances in person, in court, and in some detail.

He recounted Mr. Novak was present at a brief meeting before a scheduled call with Mr. Duffy’s then-lawyer, Janice Payne, in March, 2013, a month after Mr. Duffy had announced on TV that he would repay the $90,000 he claimed for living expenses.

Mr. Wright was seated at his desk in his office when Mr. Perrin walked in, he testified, and then Mr. Novak came in and sat at the head of a boardroom table. Mr. Perrin started to deliver bad news: that Mr. Duffy was thinking of backing out of repaying the expenses, and letting auditors decide if he owed the money.

“At this point, Mr. Wright interjected and said that Senator Duffy will be going ahead with repaying his expenses, because I will be paying for them,” Mr. Perrin testified. “That was the first time that I had heard that, so I was quite surprised by that statement from him.”

He added: “Because it was so surprising to me, I immediately looked to my right to see Mr. Novak’s reaction to that information. And he didn’t have any reaction to that information.”

Mr. Perrin described who sat where, adding he remembered it “very vividly” because he rarely went to the chief of staff’s office. And he said Mr. Wright raised the same information, in Mr. Novak’s presence, on the 15- to 20-minute call with Ms. Payne that immediately followed, when Ms. Payne, as expected, suggested Mr. Duffy might not repay.

“Then Mr. Wright said to her, ‘Well, Senator Duffy is going to go ahead and repay that money because it’s coming out of my pocket.’ He stated it very matter-of-factly. And what surprised me is that without skipping a beat, then Mr. Wright and Ms. Payne proceeded to then discuss how this funding would be provided from Mr. Wright to Senator Duffy.”

Mr. Perrin testified later that Mr. Novak did not speak, but was “present throughout the call.” That contradicts Mr. Wright, who testified that he recalled that Mr. Novak went in and out of his office during the call.

Mr. Perrin also testified that once Mr. Wright mentioned he would pay, Ms. Payne did not say anything further on the call about Mr. Duffy backing out of repayment and letting auditors judge his housing-expense claims.

The former PMO legal adviser’s testimony indicated he wasn’t privy to all the conversations about the expense issue, despite playing an extensive role in last-minute negotiations with Ms. Payne before Mr. Duffy made his public pledge to repay.

Mr. Perrin also testified he was “taken aback” when, in a decision related to the Duffy affair, Mr. Harper decreed that anyone who owned property in a province met the constitutional residency requirement to represent the province in the Senate.

This came during Mr. Perrin’s first contact with the Duffy file, in February, 2013, when he was asked to examine legal interpretations of the constitutional residency requirement.

Mr. Duffy was worried that if he conceded, for expense purposes, that his primary residence was not in Prince Edward Island, then he might not meet the residency requirement and lose his Senate seat. Mr. Perrin testified he understood that was an obstacle to Mr. Duffy agreeing to repay housing claims, and that the goal in his review was to provide an interpretation that would not disqualify any senators.

But after reading a briefing note on potential interpretations, Mr. Harper shut down the discussion, ruling that any senator who met another requirement that they own $4,000 worth of property in the province was also a resident.

“I was taken aback by the Prime Minister’s decision that if you simply owned $4,000 of real property that made you a resident,” Mr. Perrin testified. “To me, both legally and practically, it seemed untenable. I would not be able to consider myself a resident of Nunavut, having never visited there, simply by buying $4,000 of property.”

He wrote an e-mail stating that, from a legal point of view, it didn’t make sense to interpret the one Senate eligibility requirement, for residency, as a repeat of another, for property. He testified he tried to “diplomatically” convey, citing legal texts, “that the view taken by the Prime Minister was not consistent with basic legal interpretation principles and that I didn’t agree with it.”

But Mr. Harper had made a decision. It allowed PMO staff to reassure Mr. Duffy, and Mr. Harper later conveyed that position publicly in the Commons.

OTTAWA — The Globe and Mail
Published Thursday, Aug. 20, 2015 5:07PM EDT
Last updated Thursday, Aug. 20, 2015 10:24PM EDT