PMO warned ethics watchdog on Carson

Stephen Harper's former chief of staff wrote the ethics commissioner in 2009 to warn her of a possible conflict of interest involving Bruce Carson, then an adviser to Harper and now under investigation for alleged influence-peddling and illegal lobbying.

Conservative campaign officials released two letters late Wednesday after CBC News reported earlier in the day that Harper's then-top aide, Guy Giorno, contacted ethics commissioner Mary Dawson on Carson.

The first letter sent in January 2009 alerted the commissioner to a potential conflict of interest about an email apparently sent by Carson. The email in questionlobbied for a $25-million grant for a Calgary research institutehe was onleave of absence from heading, andwhile he was working in the Prime Minister's Office.

Giorno's letter outlined to Dawson the steps the PMO had taken to address the potential conflict of interest with Carson and the grant request from the newly-created think tank, the Canada School of Energy and Environment.

Carson, who continued to work for Harper for a month after the email before returning to the institute, said the email was sent in error by his office there.

The Harper government subsequently approved a $25-million grant for Carbon Management Canada,another research institute chaired by Carson.

A second letter sent by Giorno to the commissioner outlined additional steps taken to remove Carson from potential conflict in the pre-budget process. Giorno is currently the Conservatives' national election campaign director.

Not long after Giorno contacted the ethics commissioner, sources say, a third letter about Carson was sent to Dawson, that one from a senior deputy minister in the Harper government.

All three letters pre-dated Carson's current problems by two years.

Last month, the Prime Minister's Office called in the Mounties to investigate allegations Carson may have illegally lobbied the government in 2010 on behalf of a water-filter company employing his girlfriend, a 22-year-old former prostitute.

When that story broke, Harper and his senior staff all said they had no prior inkling there was anything amiss about Carson.

The relative hail of mail to the ethics commissioner about Carson adds another bizarre twist to the unfolding saga of the convicted fraudster who became one of Harper's most trusted advisers.

The fact two of those letters came from Harper's then chief of staff is also bound to raise new questions about how much the prime minister knew of his former aide.

NDP Leader Jack Layton was the first leader to react to the CBC News report as he was campaigning in Northern Ontario.

"If these new revelations are as they have been reported, then naturally it underlines the concern we all have about where the prime minister was on being tough on crime in his own office,"Layton told reporters Wednesday evening.

"We'll have to see where this all goes."

Harper has said he was aware only that Carson had been sent to jail and disbarred as a lawyer for fraud more than 30 years ago.

The prime minister said he was under the impression Carson had since become an upstanding citizen with an exemplary career in government and politics.

In fact, by the time Carson became a senior adviser to Harper in 2006, he had been convicted on another three counts of fraud, had gone bankrupt twice and was repeatedly in arrears on his taxes up to and including the time he was working in the Prime Minister's Office.

Giorno did not respond to requests for an interview, and the ethics commissioner is prohibited by law from discussing the details of any such correspondence.

However, in a written response to the CBC, Dawson's spokesperson Jocelyne Brisbois said that in cases like this, the commissioner would have responded directly to the writer, in this case Giorno.

The subject of a letter, Carson in this case, may also be copied on correspondence "if there is a purpose served by doing so."

Brisbois added: "There is no obligation for the commissioner to copy the prime minister."

One thing that was no secret in Ottawa's official circles in 2008 was Giorno's intense dislike of Carson.

The feeling, by all accounts, was mutual, with a long history of bad blood between the two dating back to their days at Queen's Park.

By the time Giorno took over as chief of staff in the early summer of 2008, Carson had been a senior policy adviser to Harper for almost four years, first in opposition and then in government.

Almost immediately after Giorno arrived in the PMO, he converted Carson's office into a common room for junior staffers.

Carson promptly left to become head of the Canada School of Energy and Environment, but had barely unpacked his bags in Calgary when Harper called the 2008 election and insisted his trusted adviser return to travel on the campaign plane. As soon as the campaign was over, Carson returned to Calgary to resume his position at the institute.

But six weeks later, he was back in the PMO to advise Harper during the coalition crisis that threatened to topple the newly elected Conservative government.

Documents show Carson officially left the PMO for good about two months later on Feb. 4, 2009.

Carson returned to the Calgary institute, which was supposed to be a co-ordinating agency for clean energy research.

The agency was set up as a private corporation and funded entirely with a $15 million grant from the federal government.

Almost immediately, Carson rewrote the mandate of the agency from that of a research institute to a centre devoted to promoting the Alberta oilsands and helping the Harper government navigate the politically treacherous climate change issue.

Sources say Carson was also officially retained as an unpaid adviser to the federal Environment Ministry.

That's when the third letter about Carson landed on the desk of the federal ethics and conflict-of-interest commissioner.

That missive was from the then deputy minister of the environment, Ian Shugart.

He declined to comment.