OTTAWA—Nigel Wright has flatly denied one of the most politically corrosive allegations to emerge from the Mike Duffy spending scandal: that Stephen Harper’s top PMO aides orchestrated a whitewash of an independent audit of the delinquent senator’s residency expenses.

Facing his third day of aggressive cross-examination, Wright, who was Harper’s chief of staff at the time, said he did not “direct” either foot-dragging senators or the audit firm of Deloitte to clear Duffy of wrongdoing.

He told the judge-only trial he was not trying to impose “a certain outcome” — namely, to shield Duffy from the audit — but was simply trying to ensure that the senators who had ordered the audit would speak to Deloitte and drop Duffy from the review once he agreed to repay.

Wright portrayed this administrative resolution, first proposed by Sen. David Tkachuk, as part of an “obligation” the Conservative government made to Duffy when it demanded the Prince Edward Island senator, a longtime Ottawa resident, repay thousands he felt he shouldn’t have to.

Emails, now in evidence, from Duffy’s former lawyer Janice Payne show she included Duffy’s withdrawal from the audit as one of five conditions Duffy negotiated with Wright and the Prime Minister’s Office before agreeing to go on TV and concede anything.

At Monday’s session of Duffy’s fraud trial, Wright appeared to concede several of the conditions laid out by Payne had previously been raised in discussions with Conservative Senate leaders or the PMO.

He remained calm and spoke steadily but was on the defensive throughout in testimony that canvassed what happened in February and March 2013 as the Senate spending scandal ballooned.

The suggestion that an outside audit may have been altered for political reasons is damaging not only to the Conservative brand — built on purported transparency and accountability — but is professionally damaging to an international financier of Wright’s standing.

Wright, who remains in high regard on Bay Street as an ethical straight shooter, returned last year to the private equity group Onex after he left the PMO when his $90,000 cheque to Duffy became known. Political friendships and loyalties aside, he has a lot personally riding on the judge’s findings.

Outside the courtroom, the testimony continued to dog Harper on the campaign trail Monday. The Conservative leader, now in his fourth reelection bid, blamed Wright directly for his role.

“When I learned of Mr. Duffy’s expenses, I told him that those expenses could not be justified and should be repaid,” Harper told reporters in Fredericton. “He didn’t do that, partially because of Mr. Wright that he didn’t do that. So they have been held responsible.”

Inside the court, Wright told the trial he did not meddle in the audit and did not “lie to the prime minister” about the source of Duffy’s repayment although he did withhold the fact that initially Conservative party funds were to be used to repay Duffy’s disputed housing expenses.

Wright said he did not believe the source of Duffy’s repayment funds was a “significant” element of what he needed Harper to approve when they met Feb. 22, 2013 in Harper’s office — just the two of them — to go over the PMO plan to resolve Duffy’s and the government’s woes.

Wright said Harper had to give the green light to media lines and the political push to force a recalcitrant caucus member, Duffy, to repay money he felt he didn’t owe — especially if other caucus members and senators might land in the same boat.

“I don’t feel it was a lie. It just wasn’t on my list of things I felt I had to check with him,” he testified.

Wright said he later “lost confidence” in Tkachuk’s ability to deliver on his commitment to PMO and to Duffy that if Duffy repaid the money, then the review of his residency declaration, ordered by a subcommittee chaired by Tkachuk, would be dropped.

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Wright compared the situation to a “client” — the senate subcommittee — changing instructions to a “contractor”: Deloitte. Those discussions, he said, are always “private.”

Wright said he knew that top Conservative fundraiser Sen. Irving Gerstein had senior contacts at Deloitte — it audits the Conservative Fund Canada, which Gerstein chairs — but he did not ask him to influence the firm’s Senate audit. Wright said he just wanted him to be a conduit to kick-start communication.

“I hadn’t briefed Sen. Gerstein on particular outcomes or anything like that,” said Wright. “I just wanted him to fix the broken telephone problem.”

Duffy’s lawyer Donald Bayne scoffed at Wright’s explanations: “You definitely wanted him to fix something.”

Asked why he didn’t simply let Duffy defend his actions in front of Deloitte auditors, Wright said Duffy wanted to argue that his primary residence was in Cavendish, P.E.I., based on his days on the island, when nobody in PMO believed it was his “true home.”

Wright said he believed it was better for Duffy to say he had made a mistake and to suggest publicly that it was he repaying the disputed expenses.

“Better for whom?” Bayne asked.

“Better for him, better for the government.”

“Why is it better for him? He didn’t want to do this in the first place,” Bayne said.

“Sen. Duffy did want to do this. He agreed to it,” Wright said emphatically.

Duffy, on trial on 31 counts of breach of trust and fraud charges connected to living, travel and contracting expenses, has pleaded not guilty to accepting a bribe in connection with the $90,000 payment from Wright. Wright was investigated by the RCMP but never charged.

The suspended senator sat impassively in court Monday as Bayne continued to make his case that the PMO “forced” him to “capitulate” to a “repayment scenario” that was all about political damage control. At times Duffy scribbled notes in a reporter’s notebook. At breaks, he was in a good mood, chatting with certain reporters, smiling at well-wishers.

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