Nigel Wright testified today he paid $90,000 of Senator Mike Duffy's expenses while serving as the prime minister's chief of staff because he felt he had an "obligation" to fulfil an arrangement that he said he made with Duffy.

"I had an obligation to fulfil my end of the arrangement with him. I couldn't think of another way of doing it.

"I lived to regret that decision," Wright said in court.

Wright also testified that Prime Minister Stephen Harper wasn't informed that the Conservative fund was to be used in an initial plan to pay off Duffy's expenses, when they were believed to be only $32,000.

And Wright explained to the court what he meant when he wrote an email to Benjamin Perrin, the prime minister's former adviser and legal counsel, saying "we are good to go from the PM" about that initial plan.

He also reaffirmed what he said in a past statement, that Harper did not know Wright would be paying personally to cover those expenses. Wright's term as chief of staff ended weeks later when that information became public, though it is still unclear whether he resigned or was fired.

Wright testified Wednesday he initially thought Duffy owed $32,000 related to living expenses, and was "furious" to learn it was actually, according to an external audit, more than $90,000 for various expenses.

Duffy, who was in the courtroom and sat quietly with his wife beside him listening to Wright's testimony, has pleaded not guilty to 31 charges of fraud, breach of trust and bribery related to expenses he claimed as a senator and later repaid with the $90,000 he received from Wright.

Wright testified there had been ongoing negotiations with Duffy and his lawyer to reach an agreement in which Duffy would accept some responsibility for his inappropriate expenses, when they were believed to be $32,000. During those negotiations, Duffy had demanded a number of things, including that he would be withdrawn from an external audit process, that the party would agree he met the requirements to sit as a P.E.I. senator; and that he would be kept "whole" on repayment and his legal fees would be paid.

It's "quite the list of demands," Perrin said in an email to Wright.

Wright said that Conservative Senator Irving Gerstein, who was chair of the Conservative fund, had agreed they would cover Duffy's expenses.

Two men play for the cameras awaiting the start of Nigel Wright's testimony Wednesday. One, Peter Kizoff, a family doctor from Barrie, Ont., says he is a member of the Liberal Party in the riding of Simcoe North but paid his own way to Ottawa to protest Stephen Harper's "misuse of power." (Margo McDiarmid/CBC )

Wright testified that he then spoke with Harper about Duffy's expenses. Wright said that Harper wasn't informed that the Conservative fund would be used to pay off Duffy's expenses. Wright said he told Harper that Duffy would repay the expenses and that the party would say Duffy made a mistake.

He said Harper basically approved of the plan, and said that while Duffy may have been legally entitled to those claims, those expenses still may not have been viewed as appropriate.

"I told (Harper) that Sen. Duffy was agreeing to repay; I gave him — in very broad terms, not in detail — the media lines," Wright testified.

"I think what I stressed with the prime minister was that we believed and the government would be saying, Sen. Duffy had possibly made a mistake in his claims ... as opposed to wrongdoing and that he would repay them."

'Good to go'

Referring to the "good to go" email, Wright said he meant he had raised the points he wanted to with the prime minister, and they could go ahead with the plan to have Duffy admit to mistakes and see the money repaid. But, he said he wouldn't typically inform Harper about the involvement of the Conservative fund in payment for these kinds of issues.

But the whole plan came undone when the true outstanding expense amount was revealed. At that point, Gerstein said the party fund would not cover Duffy's expenses.

Former Harper Chief of Staff Niegl Wright tells reporters he thinks the answers should be given in court. 0:43

That's when Wright decided to personally intervene using his own money to cover the outstanding expenses. He said Duffy had already committed to "one course of action" in terms of acknowledging that unintentional mistakes had been made regarding the expenses, on the understanding he, Duffy, would be "made whole," meaning that Duffy would not be out of pocket.

"If it became public, I thought it would be somewhat embarrassing," Wright said. "But there were a whole lot of connotations associated with it that I didn't really think through. If I had, I might not have done it."

Nigel Wright, former chief of staff to Prime Minister Stephen Harper, makes his way through media as he arrives to testify at the trial of embattled Senator Mike Duffy in Ottawa. (Justin Tang/Canadian Press)

Testifying in the afternoon, Wright responded to a question from Crown prosecutor Jason Neubauer about whether he told Harper of his intention to personally pay the $90,000, by replying, "No."

The Crown wrapped up its questioning of Wright shortly after 3:30 p.m. and court adjourned until Thursday, when Duffy's lawyer, Donald Bayne, will get his chance to cross-examine.

Wednesday marks the 37th day of the judge-only trial, which last sat on June 18, the start of the second hiatus of the high-profile trial that began April 7 in the Ontario Court of Justice in Ottawa. This third phase will continue until Aug. 28, and, with more time assuredly needed, break until it resumes again in mid-November.

After the first morning of testimony in the Duffy Trial from his former Chief of Staff Nigel Wright, Harper gives his reaction. 2:15

In his opening statement of the trial, Duffy's lawyer, Donald Bayne, accused Wright of leading a scheme that would force Duffy to admit he made mistakes regarding his Senate expenses and make it appear he had repaid $90,000 to stem the political fallout.

Email evidence submitted by the Crown Aug. 12