Mike Duffy trial: Former head of Senate finance testifies for 2nd time

The former head of Senate finance returnedas witness at the trial of Senator Mike Duffy today, and acknowledgedthat policies around travel and expense claims were outdated and riddled with "risk areas."

Nicole Proulxwascross-examined by Duffy's defence lawyer, Donald Bayne, who was going over details of a 2009 audit that flagged outdated, inadequate and non-existent policies around expense claims and service contracts.

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It also found that policies were not well communicated or understood by "users" that included senators and their staff.

"Would you agree that is a critically important audit finding?" Bayne asked in the Ottawa court.

"That is a very important finding, yes,"Proulxsaid.

Bayne suggested the rules and policies should have been clarified before putting someone in a prisoner's box.

"You don't fault people without clear rules," he said.

Bayne's line of defence rests heavily on the argument that Senate policies and rules were loose and unclear, and that Duffy did not break the law handling his expenses and office budgets.

Proulx first appeared as a witness inApril but testimony was suspendeddue to a legal question on whether anotherinternal Senate reporton residency requirements should be admissible.

Ontario Justice Charles Vaillancourttabled a decision Thursday finding that the report isprotected by parliamentary privilege.

Proulx was also asked about the oversight process for the service contracts, and specifically about contracts awarded to his friend and former colleague,Gerald Donohue and Maple Ridge Media.

While the rules specify that services must be to fulfilparliamentary functions, Proulx said it was up to the senator to confirm that services were rendered to his or her satisfaction.

In earlier testimony, Proulx went over the $65,000 worth of contracts Duffy entered into with Donohue. She told the court that Duffy did not have any discretion to alter the nature of the work set out in contracts signed with Donohue.

Duffy has pleaded not guilty to 31 charges of fraud, breach of trust and bribery related to Senate expense claims and a $90,000 repayment made with a cheque from then-prime minister Stephen Harper's chief of staff, Nigel Wright.

Donohuebeganhis own testimony Thursday by video link from his home in Carp, Ont.He told the court he received payments for work for Duffy to his wife's companiesMaple Ridge Media and Ottawa ICF.

Donohue has never been an owner, employee or authorized cheque writer for the companies, but said it would be a Revenue Canada "disadvantage" to have the payments come directly to him. He also testified Thursday that he cut cheques to third-party individuals and companies through his wife's companies for services as "instructed" by Duffy.

The Crown has alleged the contracts were set up so Duffy could funnel cash to favoured contractors, some of whom provided services that were not allowable under Senate budget rules.

Donohue's testimony was paused until Monday because of technical problems.

The Crown has alleged Duffyused Donohue as a middleman to expenseinappropriate or non-parliamentary services.

Court has heard that Donohue issued cheques for services expensed by Duffy that included payments to an office volunteer, a makeup artist, a photo processing firm and a personal fitness trainer.Proulx testified thatbills for makeup, personal fitness and personal and family pictures do not fall under parliamentary business and can't be expensed.

She also told court thatshe rejected a claim by Duffy in 2009 requesting compensationfor makeup servicesheused before posing for aSenate portrait, and wrote to Duffy explaining why the claim was turned down.

Court has adjourned and will be back Monday at 1:30 p.m. to hear more testimony from Donohoe via video link.

The Duffy trial wraps up for the week

9 years ago

Duration 1:14

Duffy's lawyer Donald Bayne and witness Nicole Proulx leave the Ottawa courthouse.