June 9, 2015 / 7:34 PM / in 2 years

Canada Senate scandal report puts pre-election pressure on Harper

OTTAWA, June 9 (Reuters) - Members of Canada's Senate improperly spent almost C$1 million ($810,000) in just two years, according to a report released on Tuesday that is expected to pressure Conservative Prime Minister Stephen Harper ahead of October's general election.

After receiving the report from Auditor General Michael Ferguson, the Senate last week referred the cases of two sitting and seven former senators to police for criminal investigation.

The watchdog's report follows a spending scandal involving members of the Senate, who are appointed to Parliament's upper chamber by the prime minister of the day.

The 105-member Senate, officially charged with reviewing legislation passed by the lower house, has historically been criticized as a dumping ground for political operators. The recent scandal has pushed it deeper into disrepute.

Justin Trudeau, leader of the opposition Liberals, kicked all his party's 29 senators out of caucus last year as the scandal spread.

Ferguson's investigation uncovered C$992,663 in irregular spending and expense claims made by 30 current and former senators. Eight of those senators were appointed by Harper, who is trying to pull off a rare fourth consecutive election victory in October.

Opposition parties say the scandal makes a mockery of the promise Harper made when he took power in 2006 to increase accountability. Polls show he will struggle to win another majority.

"Not all senators' expenses ... were properly controlled or incurred for parliamentary business and with due regard for the use of public funds," said Ferguson, who examined spending from April 2011 to March 2013.

Two of the 30 senators in question are Leo Housakos, speaker of the chamber, and Claude Carignan, government leader in the Senate.

Both are Harper appointees, as is Senator Mike Duffy, who is on trial facing charges of bribery and improper spending. Ferguson's report did not cover Duffy.

Harper's chief of staff resigned in May 2013 after it emerged he had secretly given Duffy a C$90,000 check to help cover expenses Duffy was deemed to have claimed improperly.

Harper insists the scandal has nothing to do with him and that those found guilty should be punished. The opposition New Democrats, who have never held power federally and therefore have never appointed a senator, say he is deeply implicated.

"Canadians have the right to clear answers," party leader Thomas Mulcair said Monday. "It's their money that is at stake. We're talking about people the prime minister nominated."

One of the two sitting senators whose cases will be examined by police is Harper appointee Pierre-Hugues Boisvenu. The other, Colin Kenny, was named by the Liberals when they held power.

Housakos said he accepted Ferguson's recommendation that more spending controls be imposed. He said the chamber has started tightening rules.

"We must hold ourselves to the highest possible standard," he told reporters.

Prosecutors say Duffy illegally charged a raft of personal and Conservative Party expenses to the Senate. Duffy's lawyers say spending rules at the time were so vague that the expenses should be considered legitimate.

$1=$1.23 Canadian Editing by Jeffrey Hodgson; and Peter Galloway

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