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A view shows the Senate Chamber on Parliament Hill in Ottawa January 17, 2011.CHRIS WATTIE/Reuters

An internal Senate review has cleared all but three members of improperly claiming a housing allowance and recommended new rules for future claims, as the Red Chamber tries to stamp out criticism over its members' spending habits.

The Senate has come under intense scrutiny in recent weeks after external auditors were called in to look at housing claims made by three senators. A fourth senator, Conservative Pamela Wallin, faces a separate audit of her travel claims.

The Senate committee on internal economy, which has been examining the issue since December, announced on Thursday that an internal probe raised no further questions.

"They found no irregularities as a result of the documentation that was filed or as a result of interviews that were held with several senators," Liberal Opposition Leader James Cowan said outside the Senate chamber. "So I'm obviously pleased that that has happened. It's exonerated many of my colleagues."

Senators can claim a housing allowance of up to $22,000 a year if their primary residence is outside of the National Capital Region and they travel to Ottawa for work.

Conservative Senator Mike Duffy, independent Senator Patrick Brazeau and Liberal Senator Mac Harb each claimed the allowance despite evidence suggesting that all three spend most of their time at a residence in or near Ottawa.

Two more senators were interviewed this week by members of the Senate committee after they failed to produce records proving that they are eligible to claim a housing allowance. Conservative Senator Dennis Patterson, who represents Nunavut, and Liberal Senator Rod Zimmer from Manitoba were cleared after speaking with the committee, which means their claims will not be subject to a formal audit.

"Both explained to the complete satisfaction of the interviewers that their travel claims were in order," states a report tabled Thursday by Senator David Tkachuk, who chairs the internal economy committee.

The Senate committee in charge of the review recommended new rules that would require senators who want to collect a housing allowance to show a driver's licence, health card and some tax information each year to prove that their main residence is outside the Ottawa area. It also suggested that the Senate standardize its terminology and review the policy on senators' travel.

The committee did not address questions about whether all sitting senators are, in fact, residents of the province or territory they represent. Mr. Duffy drew attention, in part, because he represents Prince Edward Island but has spent decades living and working in Ottawa. He has promised to return the money he claimed for his Ottawa home, saying he may have made a mistake when filling out expense forms.

NDP MP Charlie Angus slammed the Senate report, saying it did not deal with the more fundamental question of senators' residences and whether someone who lives mostly outside of the province or territory they represent should be allowed to sit in the Senate.

"There's clearly a huge problem in there but we have the senators circling the wagons protecting themselves," he said outside the House of Commons. "We need real accountability and nobody's going to fall for this kind of attempted rearguard action."

Government Senate Leader Marjory LeBreton said senators' residency is determined based on a declaration senators must sign that indicates the jurisdiction they represent.

"All of the other issues of residency that have evolved over time in terms of expenses really, truly need to be clarified," she said.

A separate, internal audit looking into all aspects of Senate administration is expected to be completed in the coming weeks, Ms. LeBreton said.

"They will be making recommendations and we may very well have to refer a lot of these rules and regulations to various committees … and maybe they're going to have to rewrite the rules."

She said she did not know when the results of the external audits would be available. "I desperately want this cleared up, I can assure you," Ms. LeBreton said.

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