The widening Senate scandal that the prime minister flippantly tried to dismiss as a "distraction" just days ago has instead become arguably Stephen Harper's worst hour.

The question is no longer only whether taxpayers have been stiffed by the expense-account hijinks of a few senators feeling overly entitled to their entitlements.

At risk is Harper’s own credibility, with his apparent mismanagement of the growing political crisis having already provoked rare public criticism from members of his own cabinet, caucus and Conservative party core.

Most of this political disaster revolves around a mysterious $90,000 personal cheque from Harper’s chief of staff, Nigel Wright, to help Senator Mike Duffy repay four years of invalid expense claims.

The money given to Duffy in March this year was apparently a "gift" with no repayment expected.

Equally mysterious, the prime minister claims he knew nothing of the deal between his closest adviser and the Conservative senator.

No one has yet offered a plausible reason why Wright — a cautious, diligent, highly successful former business executive — would give Duffy a $90,000 personal gift to solve a political embarrassment in the Senate.

And if a prime minister known as a micro-manager and control freak claims he didn’t know about this extraordinary deal, average Canadians might be excused for wondering why he didn’t know.

The path not taken

It all could have gone down differently.

The day the story about Wright's cheque broke, Harper could have called a news conference to announce he had sacked Wright, was kicking Duffy out of the Conservative caucus, and was turning the whole deal over to the RCMP and the federal ethics commissioner.

Instead, Harper’s office proclaimed that the PM had full confidence in his chief of staff, and waited five days to confirm Wright’s resignation.

ESSAY: Why political scandal is harmful for the country

Harper never did call in the Mounties, and it was the opposition that triggered a probe by the ethics commissioner.

This week, six days after the $90,000 Wright-Duffy deal broke in the media, reporters were finally summoned to hear the prime minister supposedly confront the issue in a special address to his Conservative caucus.

Instead, Harper never mentioned Wright, Duffy or the $90,000 payment.

Instead, he used his MPs and senators and the media in the room as props for a photo-op and a lot of hyper-partisan rhetoric.

Then, Harper simply left town and flew to Peru on a trade trip that could have easily been handed off to one of his ministers.

Scandal not blowing over

The whole episode left many Conservative MPs and cabinet ministers openly furious over what they regarded as a wrongheaded strategy to simply shrug off the whole thing and hope it would blow over.

But it didn’t, and it hasn’t.

Now it turns out Wright — and perhaps others in the prime minister's office — were consulted by Conservative senators involved in doctoring a Senate report on Duffy's expenses.

If Harper didn’t know about any of this, he should have.

More than a year ago, Auditor General Michael Ferguson very publicly raised red flags about a lack of documentation to support some unnamed senators' expense claims.

And Duffy's case was hardly hidden from the PMO.

The former broadcaster had lived in Ottawa for more than 30 years, and had a cottage in Prince Edward Island when Harper appointed Duffy to the Senate as a member for P.E.I. in 2008.

If Duffy had declared his home in Ottawa as his "primary residence," he would not have been entitled to any housing or travel allowances.

But by claiming his P.E.I. property as his primary residence, Duffy got it all: a housing allowance to live in his suddenly "secondary" Ottawa home, almost $90 a day for other living costs while he was in the capital "on Senate business," and taxpayer-funded trips to P.E.I. and back.

In four years, he claimed almost $90,000, plus dozens of free trips between Ottawa and P.E.I. for himself and his wife.

Yet, until six months ago, no one in high office apparently raised an eyebrow.

Ditto for Liberal Senator Mac Harb and Conservative Senator Patrick Brazeau who had made similar arrangements after going to the Senate.

It wasn't until the media subsequently raised questions late last year about Brazeau — then Harb, then Duffy — that the Senate finally called in the private auditing firm Deloitte.

(Conservative Senator Pam Wallin also came under scrutiny for her travel claims, a probe that continues.)

Duffy neglected to mention Wright's generosity

According to Senate documents, on Feb. 14 this year, Duffy's case was sent to Deloitte for a full audit of his housing and travel claims.

A week later, Duffy told CBC he and his wife were voluntarily repaying just over $90,000 in housing allowances.

He neglected to mention they would be paying with money from the prime minister's chief of staff.

In any case, Duffy's repayment didn’t stop the audit.

Sometime in late April, Deloitte submitted its findings to the Senate, and a report was prepared by the sub-committee that first sent Duffy's file to the auditors.

On May 7, the Senate sub-committee of two Conservative senators and one Liberal approved a damning draft report, saying there was no justification for Duffy's having claimed his Ottawa home as a secondary residence.

But a funny thing happened on the way to the Senate — the two Conservatives agreed to doctor the report.

Two days later, in the official report to the Senate, all references critical of Duffy had been deleted.

This week, one of the Conservative senators involved in altering the report admitted he discussed Duffy with Harper’s chief of staff, Nigel Wright, generous donor of the $90,000 gift cheque two months ago.

"I would have been having a number of discussions with Nigel," Senator David Tkachuk said.

"He didn’t tell me to do anything really. We discussed Mike [Duffy] and the situation he was in.

"I mean the Prime Minister’s Office was very concerned about this. They don’t like this scandal going on. It was hurting us politically."

Clearly, it still is.