UPDATE 1-Canadian PM says growing expenses scandal a distraction

Tue May 21, 2013 2:03pm EDT
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* Crisis is biggest to hit Conservatives since 2006

* Conservatives fear scandal will damages party's reputation

* Polls show party trailing Justin Trudeau's Liberals

By David Ljunggren

OTTAWA, May 21 (Reuters) - Canadian Prime Minister Stephen Harper on Tuesday dismissed a mushrooming expenses scandal as a distraction, but also said he was "very upset" that members of his Conservative Party had apparently tapped the public purse for personal gain.

Harper, facing the biggest crisis since he won power in early 2006 with promises to clean up government, urged legislators to focus on the economy, which the Conservatives see as their strongest suit.

"We have an active and important agenda on the issues that matter to hard-working Canadian families ... when distractions arise, as they inevitably will, we will deal with them firmly," Harper told his Conservative caucus.

"But we cannot lose sight of our top priority."

In a widening spending scandal that is being investigated by ethics commissioners, three Conservative senators have stepped down to sit as independents after audits indicated they claimed expenses to which they were not entitled.   Continued...