With Friends Like Harper: how Nigel Wright went from golden boy to fall guy
With Friends Like Harper: how Nigel Wright went from golden boy to fall guy
With Friends Like Harper: how Nigel Wright went from golden boy to fall guy
The corporate insider Nigel Wright engineered Stephen Harper’s rise to prime minister and became his closest confidant. As chief of staff, he acted as a conduit between Bay Street and the PMO—until Harper thought he could make the Senate scandal go away by cutting Wright loose
For well over a century, the Albany Club, a four-storey neoclassical building on King East, has served as Canada’s bastion of big-C conservatism. It’s the place where Toronto’s business crowd hobnobs with provincial and federal Tory leaders over scotch and canapés. The most anticipated event on the Albany’s social calendar is its annual Sir John A. Macdonald dinner, a black-tie affair in which several hundred of the party faithful gather to hear a candid address delivered by a prominent conservative. Past speakers have included Bill Davis, Jim Flaherty and John Baird.
This year’s event took place on a chilly evening in mid-January. The honoured guest was the employment minister, Jason Kenney, who gave a speech about Conservatism in Canada that included a spirited defence of Bay Street’s own Nigel Wright—a respected corporate player who, eight months earlier, had stepped down from his role as Stephen Harper’s chief of staff. Sometimes people try to do the right thing in politics, Kenney said, and it doesn’t work out the way it should. His words brought the crowd to their feet amid thunderous applause, hooting and whistling.
Wright, of course, resigned after it was revealed that he’d written a $90,000 personal cheque to Mike Duffy, to cover the senator’s inappropriate expense claims. The deed appeared, on its face, harmless enough: Wright wanted taxpayers reimbursed, and Duffy didn’t have the money to do it. At first, Harper seemed to see it that way, too. But over the following six months, he distanced himself from Wright, ultimately portraying his former right-hand man as a deceitful plotter whom he’d in fact dismissed. Kenney, who is rumoured to have his eye on the prime minister’s job, was the first MP to break ranks with his boss. Referring to Wright, he told the media, “As far as I can tell, this was an uncharacteristic lapse of judgment.”
Wright has toiled tirelessly in the backrooms of the Conservative party machine for 30 years. He was one of Harper’s biggest supporters and an unofficial advisor since the late 1990s. They were close friends who respected and trusted each other. And then Wright was thrown under the bus.
On Bay Street, Wright’s friends are legion. The list includes some of the biggest names in Canadian business—Gerald Schwartz, Peter and Anthony Munk, the Jackmans—as well as many lesser-known but no less influential corporate leaders and political organizers. Harper’s treatment of Wright—and his inept handling of the entire ordeal—has forced many of them to re-evaluate the prime minister. Not only has the crisis challenged their perception of his political infallibility, but it has made them question his judgment. As one senior Conservative said to me, “If this is going to be a contest in terms of who Bay Street values more, I don’t like Harper’s odds.”
To the public, the Senate scandal is a baffling, sometimes comical tale of greedy, hyper-partisan politicians and of backroom hacks trying desperately to protect them. But to corporate and political insiders, it’s a story of personal betrayal—and a rift that has divided the Conservative party at the highest levels.
Stephen Harper and Nigel Wright were destined to run the country together. They were born four years apart (Harper in 1959 and Wright in 1963) and raised in similarly modest, close-knit, traditional families that valued hard work, personal responsibility and civic-mindedness. Harper grew up in Leaside and spent his teenage years in Etobicoke, where he attended Richview Collegiate and graduated with the highest marks in his grade. Wright, too, was a top student: he was part of an enriched program at Tecumseh Public School in Burlington, where he was raised. He and his brainy classmates carried briefcases to school and collected Red Rose tea figurines. They traded clever quips in the halls between classes and challenged teachers on the finer points of history and politics. He graduated from Lord Elgin High School a year early. Both Harper and Wright have been described by former classmates as smart, driven, respected and well liked. Everyone expected they’d go on to do big things.
Harper arrived at Trinity College at U of T in 1978, but he only stayed a couple of months, deciding instead to move to Edmonton to gain work experience. He took a job with Imperial Oil (his father was an accountant with the company in Toronto). Wright arrived at Trinity in 1980 at age 17. He was small in stature and courteous but highly ambitious. It was during his time at U of T that he began attending St. Thomas’s Anglican, where he continues to worship and has served as a warden and subdeacon. Always an early riser (“He never seemed to need much sleep,” says his younger sister, Karen), Wright also began a daily running regimen that today has him covering 20 kilometres most mornings.
A member of the Young PCs since high school, Wright joined U of T’s Campus Conservatives and was quickly spotted by Tom Long, then president of the Ontario PC Campus Association. The two became good friends, and Wright later succeeded Long as head of the organization. Early in 1983, they ran Brian Mulroney’s youth campaign at the Conservative leadership convention in Ottawa. For many conservatives, backing the centrist Mulroney was a Faustian bargain. They worried that he would loosen the party’s right-wing underpinnings, but if they wanted to beat the Liberal juggernaut, going back to Joe Clark wasn’t an option. That September, Wright started law school at U of T, but took a break from his studies when Mulroney won a majority government, to work in the Prime Minister’s Office as a speech writer and an assistant to Charley McMillan, Mulroney’s policy advisor.
Long and Wright went to Ottawa as part of a large new cohort of young Conservative political aides. They shared an apartment and began organizing dinner parties for which they’d bring in notable speakers—the automotive magnate Frank Stronach, pollster Michael Adams, the Quebec senator Jean Bazin—and steadily pushed their way into the Conservative party’s inner circles.
By then, Harper was himself in Ottawa. He discovered politics at the University of Calgary, where, following his stint with Imperial Oil, he studied economics and began cultivating his famously obsessive hatred for the Liberals. Like Wright, he became president of a PC Youth club, and went to work as an aide to Jim Hawkes, the Conservative MP for Calgary West. He followed Hawkes to Ottawa in ’85 but quickly became disenchanted with the political scene and the Mulroney government. After returning to Calgary to work on his master’s, he was hired by Preston Manning’s fledgling Reform party as its first policy advisor.
Wright finished his law degree, then a master’s at Harvard, before taking a job at the corporate law firm Davies, Ward and Beck, where he stood out for his ability to quickly analyze information and wrangle large, complex deals. One of his biggest clients was Onex, the private equity firm that, with its combined subsidiaries, is considered the biggest private-sector employer in the country. Onex is run by Gerald Schwartz, at the time a committed Liberal and a powerful political organizer (as well as the husband of Indigo CEO Heather Reisman). Wright helped the company with several high-profile deals, including the takeovers of Celestica, Imperial Parking and Lantic Sugar. Whatever their political differences, Schwartz was blown away by Wright’s business acumen.
In the ’93 election, the federal PCs were reduced to a miserable two seats and Kim Campbell lost her briefly held position as head of the government. Wright, who’d worked on Campbell’s leadership campaign, was devastated. The collapse of the PCs was hastened by the rise of Manning’s Reform party, which won 52 seats—one of them held by the 34-year-old economist Stephen Harper. Wright pegged Harper, who was young, smart and more or less bilingual, as a possible central figure to help bridge the various factions of the party. He organized a lunch at a Toronto restaurant to introduce Harper to a small group of Ontario Conservatives and business acquaintances. Wright thought it was important to open up a dialogue between Ontario and Alberta. If there was going to be any chance of a union, the two sides had to get to know one another.
In 1997, Schwartz wooed Wright to join Onex. Working at the corporation put him at the centre of the Canadian deal-making universe, that powerful junction where Bay Street and Parliament Hill intersect. Wright was instrumental in building the company’s aerospace division, working on intricate deals, often involving regulated business. His knowledge of political and government processes was a major asset. And he had a natural talent for sniffing out opportunities that would make the company a lot of money. He oversaw Onex’s acquisition of Boeing’s airframe manufacturing business—later renamed Spirit AeroSystems—a complicated 15-month transaction involving multiple supply agreements and several union contracts. He faced the unions head-on, negotiating their approval of a new five-year contract that reduced pay by 10 per cent in exchange for stock options and a renewed pension plan. He travelled constantly, mostly in North America and Europe, and reportedly had a salary of $2 million.
Over the next few years, both Wright and Long tried several times to convince Harper, who’d returned to Calgary to run the right-wing think tank the National Citizen’s Coalition, to get back into politics; the first time, it was to replace federal PC leader Jean Charest in ’98. They felt strongly that he was the right man to unite Conservatives, but Harper refused. He was disillusioned by his time in Ottawa—he resigned his Reform seat after three years, upset with Manning’s populist leanings—and was loath to re-enter politics while his kids were still young.
In 2000, Wright, Long and then–provincial Tory minister Tony Clement helped found the Canadian Alliance—a new party conceived to bring east and west together. Again Wright and Long, over many phone calls and meetings, tried to persuade Harper to lead it. Gerald Schwartz recalls poking his head into one of the lunchrooms at Onex in search of Wright around this time and finding him sitting at a table with a guy he didn’t know. “Oh, hi Gerry,” Wright said, “I want you to meet my friend Stephen Harper.”
Stockwell Day became the first head of the Alliance, but when the jet skier’s leadership was contested in 2001, Harper finally agreed it was time. He became leader of the Alliance in March 2002, then merged the Alliance with Peter MacKay’s PCs the following year. To a large extent, Harper owed his place as leader of the new Conservative Party of Canada to Wright, who had backed him the whole way. With his deep business connections and capital market experience, he gave Harper some much-needed Bay Street cachet, making the western reformer palatable to the Ontario wing of the party.
In 2003, Wright, along with Irving Gerstein, the former president of Peoples Jewellers, and Gordon Reid, founder of the Giant Tiger discount chain, established the Conservative Fund Canada. The CFC would become Harper’s greatest weapon in his war to eviscerate the Liberal party. Gerstein revolutionized the way Canadian political parties raise money—soliciting small individual donations, at the grassroots level—and the Conservatives became far and away the wealthiest party.
It is impossible to overstate the impact of fundraising on the Conservatives’ success. Gerstein enlisted 100,000 donors who would give $50 or $75 each to ensure their man would do what he was elected to do: make government more accountable, lower taxes, build more jails. The donors became known as “the base,” a term bandied about so often that it has taken on a dehumanized, sci-fi overtone, like the Borg in Star Trek. Pleasing the base became the Harper government’s top priority.
Wright worked hard behind the scenes to represent the interests of the east and of Bay Street. He co-chaired big fundraising parties in Toronto, before there were spending limits and political donations had to be declared. In 2003, he and the journalist Linda Frum, along with Tom Long, Fred Eaton and Peter Munk, organized gala events where Toronto power brokers paid $1,000 each to meet the emergent Stephen Harper. One Royal York party alone raised $1 million. Linda Frum was ultimately rewarded for her efforts with a Senate seat.
As for Wright, he continued to advise Harper as he rose from opposition leader to prime minister in 2006. In 2010, Wright took a leave of absence from Onex to become Harper’s chief of staff. He kept his Toronto house, a $4-million renovated Victorian in the Annex, and bought a $700,000 condo on Sussex Drive, just across the Rideau Canal from the Parliament Buildings and a short stroll from his office in the Langevin Block. His new boss, he would tell a federal ethics committee, was a man “whose values align with mine in every conceivable way.”
The majority of Canadians have never really warmed to Stephen Harper. They find him too stiff. Cold. Calculating. His authoritarian style of governing makes people uneasy. When he takes a position on an issue, he is locked in cement. And even when he’s willing to compromise, the gesture comes off as politically expedient rather than genuine. After all, it took Harper 10 years to wrest control of the country from the Liberals, and he isn’t about to give it up. He is a shrewd tactician who has led his party through two minority governments with a win-at-all-costs attitude.
Not that Harper would care about his reputation. As one long-time Conservative remarked to me, he may be the only politician who genuinely doesn’t think that being liked is part of the job description. It’s no surprise, then, to hear people in Ottawa say the PM doesn’t have many friends. His past is littered with former allies and mentors—Jim Hawkes, Preston Manning, Tom Flanagan—who no longer conformed to the Harper ideology. Wright was reportedly one of the few people Harper completely trusted.
Wright took a significant pay cut to become chief of staff (his government salary was estimated at $300,000), and declined to file any expenses for meals, flights or hotels. He believed he shouldn’t charge taxpayers for expenses if he could afford to cover them himself.
In Ottawa, Wright was the PM’s lead advisor and the main switchboard for the entire government, as well as the primary point of contact for everyone outside of government, acting as a buffer and mediator between them and the PM. In this, Wright excelled. He was one of the few people in government who understood the private sector and the workings of the broader economy. In the one-industry town that is Ottawa, ministers are prone to look at issues through a narrow political lens, and business executives, particularly in Ontario, were thrilled to see someone with Wright’s experience bringing credibility to the PMO. Wright understood the concerns of large, publicly traded corporations and the implications of turning down this proposed merger or approving that acquisition.
When Harper finally won his long-coveted majority in May 2011, Wright’s responsibilities increased tenfold. On any given day, the prime minister’s chief of staff would be actively managing dozens of files. Wright contributed to important public policy—on foreign ownership rules, competition in the telecom sector and especially CETA, the free trade deal with Europe. When the Idle No More protests for First Nations sovereignty reared up in the fall of 2012, Wright quickly recognized that it could help the government if managed correctly. He saw that the impasse was largely bureaucratic, so he persuaded Harper to create some high-level committees, which he then sat on and personally nudged toward resolutions. Ultimately, Wright gets the credit for pushing the treaty implementation process further than anyone in the PMO before him.
He was by far the most effective chief of staff the Harper government had seen. But there was one file he couldn’t master.
The Senate scandal was in many ways a trap of the Harper government’s own making. One of the first pieces of legislation Harper enacted upon being elected was the Federal Accountability Act, drafted in response to the sponsorship scandal under Jean Chrétien. Though well intentioned, the Act had a few unintended side effects. Restrictions on political staffers’ employment options post-government (a one-year ban on any professional dealings with government and a five-year ban on lobbying) were meant to prevent political back scratching but created a huge disincentive for experienced, mid-career professionals who might otherwise consider a tour of public duty. This helps explain why Harper has largely surrounded himself with young, relatively inexperienced staffers for whom love of the party trumps any other type of reward.
Wright, with his professional experience and personal wealth, was an exception. In the PMO he oversaw a team of approximately 100 people, but his core staff had grown up (politically at least) in the shadow of the prime minister—a loyal army of Harperites who would go to any length to protect their boss. Through this group, the prime minister is known for exerting near total control over his caucus members in both the House of Commons and the Senate. He is particularly autocratic when it comes to communication; nearly all government messaging—from ministers, senators, even representatives in Foreign Affairs—must be cleared by his office. The Harperites are deeply mistrustful of the public service, the media and anyone who isn’t a card-carrying Conservative.
Another side effect of the Act was that it made Harper the national poster boy for integrity and accountability—and he hasn’t measured up to his own standards. He promised not to appoint any new senators, then appointed a record-breaking 18 of them in a single day in 2008—including Irving Gerstein, Mike Duffy, Pamela Wallin and Patrick Brazeau. Duffy and Wallin were prized by Harper as boldface names who’d assist with party fundraising; they were joined in the Senate the following year by Doug Finley, a Conservative backroom operator who’d helped mastermind Harper’s election wins. Although Harper promised to reform the Senate, the Conservative-led upper chamber has fallen prey to the same patterns of patronage and partisanship that plagued previous prime ministers.
The Senate scandal’s roots go back to 2010, when Ernst and Young released a report on senators’ expenses. Up until then, expense filing had been more or less an honour system. Senators were not even required to submit receipts for most expenses. Ernst and Young warned that there wasn’t sufficient transparency or oversight. The rules were changed so that every senator’s expenses would be disclosed on a quarterly basis.
When the new system was rolled out, journalists who had been covering Parliament Hill for decades zeroed in on the housing expenses of one senator in particular, Mike Duffy, who represented Prince Edward Island. Duffy had been a journalist himself and had lived mainly in the Ottawa area since the ’70s. On December 3, 2012, Glen McGregor, a reporter with the Ottawa Citizen, ran a story questioning why Duffy had been claiming a monthly allowance of approximately $900 for his Ottawa home, as if it were his secondary residence. By McGregor’s count, Duffy had claimed $33,413 in housing expenses since September 2010.
Duffy quickly dashed off an email to some of his colleagues, including Nigel Wright, whom he’d known through federal Conservative circles since the 1980s. The email’s subject line was “Smear—Background FYI,” and it suggested the basis for the article was a personal vendetta dating back to McGregor’s time as a staff member at Frank magazine. Wright emailed back to say it was his understanding that Duffy had complied with the rules.
But it soon became clear to Wright that this wasn’t a smear and that Duffy had been claiming housing expenses he wasn’t entitled to. Suddenly what had seemed a small story in the Ottawa Citizen began to threaten the prime minister’s reputation as a leading proponent of Senate reform. Duffy’s expenses had become a regular topic in question period, and reporters were hot on Pamela Wallin’s trail over apparent irregularities in her travel expense claims. The unimpeachable Wright, the man countless friends describe as almost pathologically ethical, went into party-preservation mode, trying to protect its leading fundraisers, its loyal senators and the prime minister himself. Such profligacy would not go over well with the base.
Wright made it his mission to convince Duffy to pay back the funds. It wasn’t easy. One day Duffy would agree to repay; the next, he’d outline all the reasons he shouldn’t have to. Wright told Duffy that repayment wasn’t a legal issue but a moral one. Meanwhile, he was also trying to coordinate the actions of the Conservative senators, who by then had sent Duffy’s questionable expense claims to Deloitte for an independent audit. Wright was almost certainly overstepping his bounds as chief of staff, but his extraordinary relationship with the prime minister gave him extraordinary powers—and a great deal of leeway in putting out fires. He worked hard to ensure that everybody—in the PMO and the Senate—stayed on message. In one email exchange, he asked Patrick Rogers, his parliamentary affairs manager, to help keep everyone in line: “Can the [Senate] leadership PLEASE coordinate every move with us before taking ANY steps?”
On February 13, 2013, following a Conservative caucus meeting, Wright watched Duffy approach Harper. He moved to intercede. When Wright got there, Duffy was busy defending his housing expenses to the prime minister, claiming he lived in P.E.I., that he’d never been challenged on his claims before and that he shouldn’t have to repay the money. Wright told Harper he disagreed. According to Wright, Harper listened to both positions before siding with his chief of staff. He said Duffy couldn’t have incurred expenses on Senate business in Ottawa, because he primarily lives in Ottawa, and the public wouldn’t expect nor accept such claims.
Wright, increasingly exasperated by Duffy and his refusal to repay, found a solution that worked for both of them: he called his old friend Irving Gerstein and asked the Conservative party to cover Duffy’s expenses. Gerstein agreed. On February 22, Duffy, knowing about the arrangement with Gerstein, appeared in the CBC’s Charlottetown studio and admitted he may have made a mistake, citing unclear rules around Senate expenses. “My wife and I discussed it,” he said, “and we decided that in order to turn the page, to put all this behind us, we are going to voluntarily pay back my living expenses related to the house we have in Ottawa.” He said he hoped Islanders and Canadians were reassured that old Duff, “the Duff they’ve known and trusted,” would never do anything wrong.
Just four days after Duffy’s admission, Wright—the man who declined to expense his own legitimate costs—discovered that Duffy’s claims weren’t limited to housing. They included travel, per diems, even charges for meals he’d eaten in his own home. Wright was beyond furious. “This will all be repaid,” he said in an email to his assistant. The amount Duffy owed, we now know, was $90,172.24—the grand total of allowances claimed since he’d joined the Senate.
When Gerstein heard Duffy’s expenses had tripled, he informed Wright the Conservative Fund would no longer be covering the liability. Fearing that the whole deal would fall apart and the PMO would have a bigger mess on its hands, Wright made the fateful decision to cover Duffy’s repayment himself.
That cheque was a gift to the opposition and the media. While NDP Leader Thomas Mulcair hammered Harper throughout the spring session about the Senate’s residency requirements, journalists demanded explanations for how and when Duffy had repaid the money.
People close to the prime minister were becoming worried about the way the crisis was being handled. Linda Frum was concerned enough that she sent an email to Harper’s principal secretary, Ray Novak, who forwarded it to Wright. “Feel compelled to speak out,” Frum wrote. “By protecting our own we are making…PM look terrible…. I feel safe in telling you that our caucus would support forced resignations. These are my friends so this is painful to even write. But PM’s reputation—and that of Sen caucus—going down in flames.”
On May 15, CTV reported that the $90,000 repayment had been a personal gift from Wright to Duffy—a fact the PMO confirmed. Harper issued a statement saying he had “full confidence” in Wright, and that Wright would remain his chief of staff. Within the next two days, Duffy and Wallin were forced to resign from the Conservative caucus. That Sunday, the day after his 50th birthday, Wright offered Harper his resignation. He then issued a statement: “In light of the controversy surrounding my handling of matters involving Senator Duffy, the prime minister has accepted my resignation as chief of staff. My actions were intended solely to secure the repayment of funds, which I considered to be in the public interest, and I accept sole responsibility. I did not advise the prime minister of the means by which Senator Duffy’s expenses were repaid, either before or after the fact.”
In the months following Wright’s resignation, the media hounded him—one TV reporter ambushed him on a dark Ottawa street while he was out for an early morning run—the opposition NDP derided him, the RCMP investigated him, and his former boss, Stephen Harper, shunned him.
If Harper had continued to back Wright—insisting that while his chief of staff had made a mistake, it was uncharacteristic—and accepted responsibility himself, much of the scandal might have blown over. Instead, when faced with mounting criticism from opposition parties and the media, Harper ramped up his denunciations. “There is one person responsible for this deception, and that person is Mr. Wright,” he told the House of Commons when Parliament returned after the summer break. Starting in late October, he did a series of radio and newspaper interviews in which he contradicted what had been reported about Wright’s resignation: “I had a chief of staff who made an inappropriate payment to Mr. Duffy. He was dismissed.” He said Wright’s actions made him feel a “sense of anger, betrayal, disappointment and deception,” and that it was time for “disciplinary action.”
In a misguided attempt to stem the controversy, Harper pushed the Conservative caucus to move a motion to suspend Duffy, Wallin and Brazeau from the Senate for two years without pay. The vote divided senators and alienated the lone Conservative dissenter, Hugh Segal, who took the principled stand that the vote was undemocratic. (Segal subsequently announced his retirement as a senator.)
When Harper appeared at the Conservative convention in Calgary in early November, he worked hard to limit the scandal’s impact on fundraising. He didn’t mention Wright directly and instead took aim at “the courts” and “the elites” for blocking Senate reform.
Wright’s friends on Bay Street were stunned by Harper’s reaction. “I don’t understand it,” says Gerald Schwartz. “This isn’t an issue of Bay Street defending one of its own. It’s an issue of whether a guy of enormous integrity and capability, donating himself to public service for two and half years, has been treated very shabbily.”
Wright has sat quietly by, listening to Harper’s repeated public condemnations. He listened to Tom Mulcair lambast the government over his alleged offences. He listened to the mudslinging in the Senate. And now he awaits word from the RCMP on whether he’ll be charged under three sections of the Criminal Code, one of which, Bribery of Judicial Officers, carries a jail term of up to 14 years. The law is designed to prevent the corruption of a parliamentarian for personal gain. But where was the personal benefit for Wright? What did he stand to gain? He certainly couldn’t have imagined how much he was about to lose.
Wright still lives in his Ottawa condo. With the exception of a few trips to Toronto and one or two abroad, he has been holed up in the nation’s capital, talking to his lawyers and avoiding reporters. While he hangs in this peculiar limbo, he maintains his routine of getting up at 4 a.m. to go running, attending church and handing out food at a homeless shelter. The latter isn’t an attempt to tidy his sullied image—Wright has been volunteering at homeless shelters for years. There are rumours that, once free of this ordeal, he’ll move to London to work in the private sector, or to Africa to do missionary work.
There’s a well-understood code in politics. While a chief of staff serves at the pleasure of the prime minister, that service comes with a certain loyalty and respect in return. Harper’s behaviour may not affect his support among hard-core Conservatives—his precious base—but in Ontario, the province that gave Harper his majority, many Tories are talking about sitting on their hands come election time in 2015. The bitter irony is that no one would be more distressed by this outcome than Nigel Wright.