Victory in the in-and-out saga. Federal court rules for CPC.

In a decision that is certain to rattle Marc Mayrand at Elections Canada, the Liberals which prosecuted “trials” of Conservative election financing in Parliamentary committees and media observers that believe the worst about the Conservative Party, the Federal Court decided in the matter of L.G. Callaghan and the Chief Electoral Officer of Canada.

The question before the court was whether or not Elections Canada could legally refuse to certify, for the purposes of reimbursement under s.465 of the Elections Act, the claimed advertising expenses on the ground that it is not satisfied that the expenses have actually been incurred by the candidates themselves.

Here is the decision from the Federal Court:

The court decided that Mayrand inappropriately withheld expenses from Conservative candidates suggesting that these candidates in fact incurred those expenses, rather than the party. This means that the party has come in under the election spending limit (nationally) which is at the heart of this in-and-out debate. If the party has come under the legal limit, what else is there to talk about?

So far, Liberal MP Dominic LeBlanc has not provided comment. Here’s what he said on April 15th, 2008:

Mr. Speaker, the Conservatives are hiding the truth from Canadians. They filed a bogus civil suit against Elections Canada. They know very well that the RCMP never executes search warrants in civil cases. This morning, the RCMP executed a warrant in a quasi-criminal case.

How is it that the government does not know the difference?

I’ll post reaction from key players as it comes in.

Nova Scotia NDP scandal and who knew what when?

Nova Scotia is electing a government next week and you may know that the Nova Scotia NDP has a competitive shot at forming the next government in that province. For those that have been following the race, you’ll know that the Nova Scotia NDP has caused a bit of scandal that is starting to peak as we ramp up to e-day on Tuesday.

The NDP is a funny animal; the party is a national organization unlike other parties. The NDP in each province is the same organization as the NDP federally. This is different from the Conservative party, for example, which is exclusively a federal party. Yes, there are provincial sister organizations, but not branches. This could theoretically allow the NDP the potential to play a bit of a shell game when it comes to finances.

The provincial NDP has been caught in a funding scandal during this election regarding a massive influx of money on a single day of the campaign. The hive-like organization of the NDP spreads down to its union affiliates as well. On April 9th, a resolution at the Mainland Nova Scotia Building and Construction Trades Council was passed to reimburse member unions for their individual $5,000 donations to the NDP. Essentially, this packed the contributions into a $50,000 envelope and this was passed onto NDP party HQ. The scandal here is that what was essentially a $50,000 donation was made to look like 10 individual $5,000 donations (including one from the organizing union). The NDP received the cheques on the week of May 5th. Prior to this, they received a phone call to let them know these donations were coming.

The scandal broke on May 30th when a reporter got wind of what happened and called the NDP party office asking them about the donations. The party claimed to be unaware of the cheques. Two days later, the party felt it necessary to call a press conference to declare that they would return $45,000 worth of donations.

On June 3rd, Ed Wark, the NDP’s official agent, said he knew a sizable amount was coming from the trades council and nine unions after a phone conversation with union president Cordell Cole. This is a direct contradiction of Darrell Dexter’s story on Monday that the NDP just found out about these donations on the weekend. It is simply unbelievable that the NDP received $50,000 in one day after a single phone call from a union president and they claim that no one raised any questions. The Chief Elections Officer said “It appears that the contributions by the individual trade unions were improper because it was not money belonging to the trade unions – that it was being reimbursed by the umbrella organization to the individual unions,”

The next day, PC Premier Macdonald puts pressure on candidates to release full lists of donors. NDP leader Dexter agrees but refused to return the $5,000 from the Mainland Nova Scotia Building and Construction Trades Council. On the 5th, Dexter releases a two and a half page document of donations to the NDP. This apparent demonstration of accountability came a full five days after the scandal broke. The document itself shows nine union contribution (remember that nine other union contributions were returned). This means that the NDP stood to net double in their union contributions column if this scandal had not been brought to light. Further, the list of donations does not declare individual donors.

The scandal for the man who could become the next premier of Nova Scotia on Tuesday is that he and his party feigned ignorance of the massive $50,000 influx of money. In fact, on the day they were unaware of the union donations, they were aware that this was their best day for donations. Also, consider that a union rep called ahead to let the NDP know they’d be receiving the $50,000 envelope. How can Dexter or the NDP claim ignorance of the donations until an outside source was able to ask them tough questions regarding election financing?

Complaint of Garth Turner’s trust fund forwarded to Elections Canada

About a year ago, I wrote of Liberal MP Garth Turner collecting money in a unconventional way. Garth Turner was asking contributers via his website to donate to “Garth Turner Campaign, in trust”. We learned then that this may run afoul of the Elections Act because of a recent Federal Accountability Act amendment.

Here is what Turner asked of his website visitors:

Two days ago, I learned from Will Stewart, President of the Conservative Halton electoral district association, that a resident of Halton lodged an official complaint with Elections Canada via registered mail regarding Turner’s request for money to be donated in a trust fund.

Regarding the incident, here’s what I wrote on October 28, 2007,

From Elections Canada, we learn that:

…as of June 12, 2007, as a result of changes made by s. 44(2) of the Federal Accountability Act to s. 404.2 of the Canada Elections Act, transfers of trust funds to candidates from registered parties and registered associations will be prohibited.

It seems that when an election is called, the federal accountability act prohibits the transfer of money from an electoral district association’s or party’s trust fund to a candidate. If this is so, who holds this money in trust? Is it “Garth Turner campaign” (whatever that entity is) or “Garth Turner”? If the account is to be used to elect Garth Turner, it would be useless for the EDA to hold it because of the new changes governed by the FAA. But yet, outside of an election, all funds must be donated to the EDA.

furthermore (from Elections Canada),

A contribution made from a trust fund is treated as a contribution from the trustee.

When a registered party, registered association, candidate, leadership contestant or nomination contestant receives a contribution paid out of funds held in trust, the trustee is reported as the contributor and the contribution counts towards his or her contribution limit.

Therefore, only a trustee who is an individual may make a contribution from a trust fund.

So, Garth is encouraging people to write cheques to “Garth Turner campaign, in trust”. What does this mean? As is the general understanding, and confirmed by Elections Canada, funds held in trust become the property of the trustee. Contributions from trust funds are treated as contributions from the trustee. So, if a candidate were to able to transfer money out of a trust fund to fund their campaign, the maximum they could withdraw would be the maximum contribution amount allowable by an individual (ie. the trustee) per year, which is $1,100. If Garth collects $50,000 into a trust fund from donors, it becomes the property of that trust’s trustee and subsequently, that trustee can only give $1,100. But, can money even be transferred out of a trust (with many contributors) for the purpose of an election campaign?

Trusts are dubious because of the exchanging of money through an intermediary (the trust/trustee). For example, if I wanted to give a political party $100, I couldn’t give it to my friend to donate that money for me. My friend would have to do that in his name because he is the one handing over the money. Again, the nature of trusts is that the money held in trust becomes the property of the trustee and therefore contributing from that trust becomes a donation from the trustee and not the variety of individuals who gave money to put into that trust.

But, as we read on, this becomes clearer. Elections Canada states that indirect contributions are prohibited,

An individual may not collect funds from others in a trust for the purpose of making contributions to registered parties, their associations, candidates, leadership contestants or nomination contestants. (s. 405.3 Canada Elections Act)

This is because individuals cannot make contributions from funds given to them by others for the purpose of making contributions. This rule cannot be avoided by the individual collecting funds in a trust from which to make contributions.

The Liberals have been going on and on about money transfers from parties to candidates and from candidates to parties. Money transfers of this sort happen all of the time. However, according to section 404.2(2.2) of the Elections Act, this may not occur with respect to trusts.

A transfer of funds, other than trust funds, is permitted and is not a contribution for the purposes of this Act if it is

(a) from a registered party to a candidate endorsed by the party; or

(b) from a registered association to a candidate endorsed by the party with which the association is affiliated.

and according to Elections Canada,

A registered party, registered association, candidate, leadership contestant or nomination contestant may not avoid Canada Elections Act controls by collecting contributions directly in a trust fund.

Any such contributions remain contributions. They must be accepted by the relevant agent, put into the campaign account (*** ie. during a campaign, for a candidate as recognized by a returning officer during a writ period — Stephen ***) (if received by a candidate, leadership or nomination contestant) and reported as contributions.

Outside of a campaign, donations for the purpose of eventually electing somebody must be made to the Electoral District Association.

Why is Garth collecting money from his supporters into a trust?

Who owns (and therefore controls) the money in that trust since an EDA cannot transfer money from a trust to a candidate during a campaign?

How would a candidate expect to get more than $1,100 a year out of such a trust?

If a trust is made up of pooled money from a number of people, how can money be transferred to a campaign since indirect contributions are prohibited?

If during a writ period, only a campaign can issue tax receipts and if outside of a campaign, only an EDA can issue tax receipts, how can “Garth Turner campaign” hope to give tax receipts to donors as his website claims?

How much money has Garth Turner collected in trust?

Here’s what Garth had to say about this:

Mr. Taylor has written a blog of copious length after looking at my fund-raising web site (www.garthturner.com). He saw that in addition to credit card donations, I was accepting cheques, made payable to “Garth Turner Campaign, in Trust.” From that he made the assumption (since he did not call me) that I had opened a trust account, and wondered then how the new election financing rules would allow donors to get a tax receipt. I won’t trouble you with all the grinding details, since you can read them on Mr. Taylor’s blogette for yourself (www.stephentaylor.ca). But you can see from his effort on this that he thinks it’s a big deal. Maybe it is. Beats me.

…I did not think to change the wording on my website from the Garth Turner campaign to the Halton Liberal Association, so cheque-writers would face no delays or hassles in getting tax receipts. Whoops. Screw up. Enter Stephen Taylor and his “clean government” buddies to shoot my butt off.

So, what have I learned in the last twelve hours?

First, the website wording was changed. I learned not to ignore that. Second, I spent lots of time talking to a flinty-eyed party regulatory guy about campaign financing. I learned I do not want to be a regulatory guy. Third, I learned that even if the Lib riding association was dysfunctional, I had to turn over the meager amount of money in my indie campaign account. Fourth, I learned this will take some days, weeks maybe, to sort out since every donation of five or ten bucks, made over PayPay, by credit card, or cheque, will have to be reviewed. After all, the guardians of Clean Government are out to bury me &emdash; once they dig themselves out. I have learned there’s a big controversy raging about whether or not political candidates can even raise money online through portals like PayPal. It’s the Internet thing, you know, the devil’s invention.

And I’ve learned I am apparently not dead yet.

For that, Mr. Taylor, I thank you.

Daniel Hurley billed taxpayers for past election-related expenses

Daniel Hurley is the candidate for the Liberal Party of Canada in Winnipeg Centre.

From Hurley’s biography,

Dan Hurley also has extensive parliamentary and government experience, previously serving as chief of staff to the Hon. Stephane Dion, while he was Canada’s Environment Minister and as President of the United Nations Climate Change Conference. During that time, Dan used his organizational and diplomatic skills to support Stephane Dion’s efforts to bring the Kyoto Protocol into force and to move the international community forward on climate change.

During the last election, Hurley as Dion’s chief of staff, expensed a trip to Edmonton that he took with the now current Liberal leader. The problem is that he went on this trip during an election, he billed it to the taxpayer and listed the purpose of the trip as “travel with Minister for electoral campaign”.

The expenses are listed on Environment Canada’s proactive disclosure website:

Hurley billed $1,161 for flights, $219.20 for accommodations and $166.60 for meals and incidentals for a total of $1,547.56 to travel with Dion during the past federal election between December 15-17, 2005.

The Edmonton Journal states,

“Stephane Dion, the federal environment minister, spent a long Friday in Edmonton beating the drum for local Liberal candidates.” (December 17, 2005)

According to section 6.1.3 of Treasury Board Guidelines for Minister’s Offices,

Expenditures incurred by the chief of staff should be authorized by the minister or the minister’s senior delegate for financial matters.

So, this raises a few questions for Stephane Dion:

Since Dion personally signed off on Hurley’s expenses for accompanying him during an election campaign for “travel with Minister for electoral campaign”, does Mr. Dion think that it’s acceptable for the taxpayer to foot the bill for Liberal election-related expenses?

Will Dion, Hurley or the Liberal Party of Canada refund the Canadian taxpayer $1547.56 with interest?

Will Hurley be asked to step down as the Liberal candidate in Winnipeg Centre?

We’ve seen taxpayer dollars going to fund Liberal campaigns before, is this more of the same from the Liberal Party?

ADDITIONAL THOUGHTS: Of course, staff are allowed to accompany a minister for ministry-related business and file expenses — even during an election campaign — so long as they are doing government work. However, we must take Daniel Hurley’s disclosure at face value when he states that he traveled with Dion “for electoral campaign“. Hurley either made a terrible mistake by filing expenses to the taxpayer for an election campaign or he improperly worded his expense form.

That carbonzero logo raises some questions

Here’s a picture of Liberal leader Stephane Dion’s plane:

Allow me to draw your attention to the “carbonzero” logo that is displayed on the fuselage.

What is carbonzero?

Carbonzero is a company that provides carbon offsets. They were commissioned by the Liberals to provide offsets for that party’s travel during the campaign so that the Liberal could say they are “carbon neutral” during the election.

Here’s an information sheet provided by Elections Canada to reflect their interpretation of the Elections Act when it comes to “The Purchase of Advertising Space at Political Events”.

I’d like to highlight sections 6, 9, 11, 13 which read:

6. Corporations and other groups or associations sometimes offer to purchase “visibility” or advertisement space at political conventions or fundraising events. They may also offer to provide certain goods or services to attendees of these events.

9. Accordingly, when a corporation purchases advertising space at a political event, the political entity that sells it must be able to establish that the amount paid by the corporation represents the commercial value for such advertising (that is, the lowest price someone who is in the business of providing advertising would charge for this service in the area where it was provided).

11. Similarly, if the advertising space to be purchased constitutes banner space at a political event, the commercial value would be the lowest rate charged for equivalent visibility of commercial advertising placement in public areas such as bus shelters, billboards, etc.

13. The political entity must also be able to demonstrate that attendees of the event represent a market for the purchaser of advertising space. If this is not the case, the transaction would constitute a contribution.

Why is this law in place? Suppose I was a political party and my candidate was giving a speech. Suppose company X wants to advertise at my event by putting up a banner. Company X figures this is worth $50,000 and hands me a bag of cash. Elections Canada would raise a red flag on this practice. Did company X really receive $50,000 worth of advertising. If not, are they circumventing the corporate donations limit?

Back to “Profess-air” (the nickname of Dion’s campaign plane) and this election. I would argue that this election campaign constitutes a political event and I’d suggest that one of three scenarios exists here.

a) Carbonzero paid the Liberal Party to put their logo on the Liberal campaign plane.

or

b) Because Carbonzero reflects positively on the campaign and makes the point that the Liberals are carbon-neutral, the Liberals put the logo on their plane for free.

or

c) The Liberal Party paid Carbonzero to put their logo on their campaign plane.

The question is: who receives value for the display of the Carbonzero logo on the Liberal campaign plane and how is this value determined?

If the display of the Carbonzero logo is valuable to the Liberals, did they pay fair market value for its display? This may go above and beyond what the Liberals paid for carbon credits. If they didn’t, it may be argued that the difference represents a corporate donation.

If the display of the Carbonzero logo is valuable to Carbonzero, did Carbonzero pay fair market value to the Liberals for advertising their company on the Liberal plane and if not, does this reflect a corporate donation?

In my opinion, it’s best for political parties to stay away from sponsorship opportunities during elections because it is very difficult to determine the value of the market (the electorate, the news media?) and it is tricky to measure which party to the sponsorship agreement benefits and to what degree. Of course, this is possible to determine in everyday real-world scenarios, but this is one that is governed by Elections Canada.

“Tough talk” from Dion, until the headline question comes up

Today, Stephane Dion held a press conference in the National Press Theatre in Ottawa to address recent comments by the Prime Minister regarding the dysfunction of Parliament, particularly in reference to the Ethics committee which wrapped up a round of meetings last week without much accomplished.

The leader of the opposition started his press conference by responding indirectly to the Prime Minister’s ultimatum given in at the Conservative caucus retreat in Lévis, Quebec when the PM said that Mr. Dion has to “fish or cut bait”, meaning that Dion either has to instruct his members to contribute to a working atmosphere in Parliament or indicate to the PM that its time for an election. Dion made reference to fishing, cutting the fish, eating the fish and fishing for victory… or something. The Liberal leader was certainly fishing, however, not in the way the Prime Minister had hoped and rather was searching for a reason to defer ultimate judgment on this Parliament.

His tough words were empty as he told gathered reporters that the PM was wrong on climate change, irresponsible on the alleged Cadman affair, on the so-called In-and-out election financing scheme, but as Richard Brennan from the Toronto Star asked, why don’t you just say “bring it on”?

Dion was non-committal and responded that Canadians have indicated that they want an election, that there will be an election but there are by-elections to win first. Asked whether his indecisiveness will make him look weak to Canadians, Dion non-answered that his job isn’t to respond to the Prime Minister’s taunts but to replace him.

The opposition leader asserted that this is the most partisan government for some time and reflected a non-partisan tone claiming that while the Liberals are the party of multiculturalism and the Charter that no party has a monopoly on that. Similarly, on the topic of national unity, Dion responded that a right-wing government doesn’t make him feel less Canadian and that the Prime Minister should set a non-partisan tone on the unity file.

Despite these concessions, irresponsibility was the charge that Dion laid against the Prime Minister during the press conference and said that the PM’s tactics in the 39th Parliament were “unacceptable”.

Stephane Dion has had over 40 opportunities to offer more than words on the “unacceptable” state of Parliament.  Will he stop fishing and finally cut bait?

CH panel: Fall election?

Today I was on a panel with Mike Crawley, the President of the Ontario wing of the Liberal Party of Canada and with Wayne Marston, NDP MP from Hamilton East–Stoney Creek. We were chatting about a possible fall election and the dysfunction of the Ethics committee.

Click here to watch

Which NDP and Bloc candidate filings are under review by Elections Canada?

Today Marc Mayrand of Elections Canada hinted at the Ethics committee that filings from other parties were also under review by his organization that oversees elections. Currently, Elections Canada claims that the Conservative Party has run afoul of the Elections Act by the shifting of so-called expenses from the national campaign to the local campaigns. However, Elections Canada is only focusing their brutish efforts on the Conservative Party.

I decided to look into this and found that Elections Canada actually discloses via “creative” querying of their database which candidate filings are under review. If we access the contributions and expenses database on the Elections Canada website, we can compare submitted vs. reviewed filings from all candidates. There are discrepancies between both lists suggesting that Elections Canada is actively reviewing a number of filings from candidates of the 2006 General Election.

Data as submitted:

vs. data as reviewed:

Here is the NDP in BC:
Data as submitted:

Data as reviewed:

Nathan Cullen, Libby Davies, and Malcolm James are not on the “data as reviewed by Elections Canada” list while they are on the “data as submitted list”. These NDPers seem to have election filings that are under active review by Elections Canada.

NDP in New Brunswick:
Data as submitted:

Data as reviewed:

Alice Finnamore, Neil Gardner, and Yvon Godin seem to have filings that are under active review by Elections Canada.

NDP in Saskatchewan:
Data as submitted:

Data as reviewed:

Elgin Wayne Wyatt’s name is discrepant between filings submitted to and filings reviewed by Elections Canada suggesting this candidate’s filing is under active review by Elections Canada.

NDP in Ontario:
Data as submitted:


Data as reviewed:


Nirvan Balkissoon, Olivia Chow, Ed Chudak, and Sid Ryan have submitted their filings to Elections Canada but EC has not finished reviewing them meaning they have been flagged for some reason.

NDP in Quebec:
Data as submitted:

Data as reviewed:

Robert Donnelly, Anne Lesvesque, Isabelle Maguire, Ehsan Mohammadian, and Stephane Ricard have not had the reviews of their candidate filings completed by Elections Canada.

NDP in Alberta, Manitoba, Yukon, NWT, Nunavut, PEI, Nova Scotia, Newfoundland and Labrador:
no discrepancy between lists

The Bloc Quebecois only has one candidate from the last election that appears to be under active review by Elections Canada. Diane Bourgeois, according to the EC website, has submitted her candidate filing, however, its review has not been completed.

BQ in Quebec:
Data as submitted:

Data as reviewed:

In and Out common to all parties say Conservatives

The Hill Times had a cover story today describing an affidavit that the Conservative Party filed in Federal Court one week ago today.

The affidavit details examples of so-called in and out election financing by other parties. The HT story included a quote from Tory MP Tom Lukiwski,

In the affidavit, we listed more than 100 individual candidates from all three parties that did the exact same thing that we did in terms of how they entered into an agreement with their national parties on a regional ad buy. So in effect, regardless of the motion of Ms. Redman, we will now be able to take a look at the affidavits that have been presented and I would be fully prepared to bring forward witnesses and all of these candidates from the various parties and have them come forward and have them explain how they entered into this agreement and ask the question that if all parties were doing the same thing why is it that only the Conservative Party was being singled out?

The motion of Ms. Redman, the Liberal whip, was tabled at the Procedure and House Affairs committee asked the committee to investigate “In and Out” financing during the last election. The Conservatives believe that their affidavit shows that all parties participated in the financing practice which allowed individual candidates, in some cases, to participate in regional ad buys.

In discussions with some Conservatives I have heard that there is generally held belief among officials in the party that Elections Canada has been biased in its withholding of $1.2 million of rebates from the Tories. The Conservatives ask rhetorically what the key difference is between their “in and out” financing versus that of the NDP and Liberals. Some Conservatives believe that it is because of party stripe.

I have obtained a copy of the “Donald Affidavit” which describes examples of “in and out” ad buying by other parties.

Donald Affidavit (PDF)