Michael Ignatieff taking illegal donations?

(The Liberal Party says the National Post got it wrong and they respond in the update)

That’s the conclusion one may come to if one reads Don Martin’s latest column in the National Post. However, it seems that Don doesn’t come upon the conclusion himself. The fundraising numbers for the last quarter of 2008 have come out and the story is the same, yet this provides fodder for political columnists since money is important in politics to build well-oiled political machines. The Conservatives are flush with cash rounding out 2008 with $21 million while the Liberals with about $6 million. Yesterday, I spoke with Jack Layton and the NDP leader was astonished that his party posted 90% of the Liberal total, though he sounded like he was chastizing the Liberals rather than bragging about his own party’s strength.

These particular paragraphs of Don Martin’s piece stand out,

The other glimmer of Liberal hope is political weaponry they have purchased from the Barack Obama campaign.

Specifically, they have purchased computer programs and donor-targeting technology at a discount from the friendly U. S. Democrats and plan to unleash hundreds of gigabytes at crafting a master list of donors while combing the country for new support.

It looks like the Liberals are starting to get their game in gear, or are they? Last summer, I met a member of Obama’s senior staff at a web 2.0 conference in New York City. The staffer told me that the Liberals had once contacted the campaign to adapt some of their fundraising capacity. The result? The Grits never followed up. According to Martin’s piece, Ignatieff’s team finally did and they got a discounted rate.

But it is this discounted rate which may pose a problem for the Liberal party.

What does the Elections Act say about discounts?

“commercial value” , in relation to property or a service, means the lowest amount charged at the time that it was provided for the same kind and quantity of property or service or for the same usage of property or money, by

(a) the person who provided it, if the person is in the business of providing that property or service; or

(b) another person who provides that property or service on a commercial basis in the area where it was provided, if the person who provided the property or service is not in that business.

“non-monetary contribution” means the commercial value of a service, other than volunteer labour, or of property or of the use of property or money to the extent that they are provided without charge or at less than their commercial value.

Ok, so the Democrats allegedly provided a non-monetary contribution because they sold computer programs to the Liberals at a discounted (less than commercial value) rate.

When an official agent receives a non-monetary contribution from a donor, the official agent must obtain complete documentation about the commercial value of the goods or services donated, and the name and address of the donor, so that the contribution may be (subject to its commercial value) reported in the Candidate’s Electoral Campaign Return (EC 20120) as a contribution and as an expense. “Gifts and other advantages” are reported separately in the Candidate’s Statement of Gifts or Other Advantages Received (EC 20053)

So, do the Liberals have to fill out some forms? No! Thankfully, they’ll save some time because the contributions themselves are ineligable.

404.(1) No person or entity other than an individual who is a citizen or permanent resident as defined in subsection 2(1) of the Immigration and Refugee Protection Act shall make a contribution to a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant.

The Liberals as a registered political party appear to be taking non-monetary contributions from foreigners to raise more money in Canada. If Don Martin’s account is true, the Liberals aren’t playing by the rules. This should raise some serious questions about the judgement of Michael Ignatieff.

Liberals receiving discounts from the Barack Obama campaign?

No, they can’t.

UPDATE: And they didn’t according to Liberal Party spokesman Daniel Lauzon. Daniel writes:

You should note that the Liberal Party has not, in fact, purchased software from the Obama campaign or any other supplier. Though we are currently exploring options for more powerful software – including products like those used by our friends to the south – we have not made a purchase, let alone at a discount.

The statement appears to stem from an interview granted yesterday, and I am in the process of clarifying this unfortunate misunderstanding.

I hope this clears things up. I appreciate your cooperation in clarifying this matter for your readers.

Is s.329 of the Elections Act quixotic?

Section 329 of the Elections Act reads,

“No person shall transmit the result or purported result of the vote in an electoral district to the public in another electoral district before the close of all of the polling stations in that other electoral district.”

The polls in Newfoundland and Labrador close at 8:30pm local time whereas those in BC close at 7pm. In reference to the Eastern time zone, those eastern polls close at 7pm and those polls on the west coast at 10pm. Therefore, it is technically illegal to broadcast results of any poll between 7pm and 10pm tonight though results should be available as early as 7:45pm.

In this age of new media, bloggers, facebookers and twitterers are expected to operate in the framework of an antiquated law. When this provision of the Elections Act was written, the intent of the law was to prevent television networks from broadcasting results in Newfoundland to British Columbia in order to prevent BC voters from having results before they cast their own ballots. Now that new media offers populist broadcasting to everyone with a mobile phone or a computer, how will Elections Canada enforce this provision of the Elections Act?

In my opinion, this section is a violation of free speech. Yes, I understand the reasoning behind it, yet I do believe that the law does not reflect reality in this age of self-broadcasting. Laws should be enforceable because when it is impossible to enforce a law, a law ceases to have effect. If the purpose behind the law is valid (to prevent “specially informed” voters), a more realistic method of achieving it is required. It is much more reasonable to close all polls at the same moment no matter the time zone.

What is to stop an Atlantic Canadian from updating her twitter status as to the result of her Newfoundland riding? Or the Prince Edward Islander from posting who is in the lead on his Facebook wall? Since the possible forums for national broadcast have gone from a limited three television networks to practically limitless social media outlets, this particular provision of the Elections Act is de facto unenforceable.

And who is responsible for the rebroadcasting of early results? Do I shut down Blogging Tories for three hours this evening because a blogger whose RSS feed I aggregate there may put me in violation of the Act? Is the situation similar for Google Reader and iGoogle which both act as an RSS reader? More broadly, will Google shut down its Blogger site to Canadian IP addresses? Will Twitter face sanction because a Canadian might convey information to another Canadian through its American-hosted service?

Indeed, the law does not reflect reality and must be changed. What remains to be seen is whether change will come from mass social media violation of s.329 or through the legislative process.

Anthony Rota’s controversial ad

Why is it controversial? The ad was published in the North Bay Nugget on September 23rd, 2008 (during the writ period) and it doesn’t appear to contain the words “approved by the official agent for Anthony Rota”. If my eyes do not deceive me, this would be in contravention of s.320 and s.321 of the Elections Act.

Those sections are,

320. A candidate or registered party, or a person acting on their behalf, who causes election advertising to be conducted shall mention in or on the message that its transmission was authorized by the official agent of the candidate or by the registered agent of the party, as the case may be.

321. (1) No person shall knowingly conduct election advertising or cause it to be conducted using a means of transmission of the Government of Canada.

(2) For the purpose of subsection (1), a person includes a group within the meaning of Part 17.

This appears to be an ad authorized by Anthony Rota as an MP. If that’s the case, he’s advertising himself (he’s now a candidate) using his MP office.

UPDATE: Rota’s campaign explains that the ads were bought prior to the writ drop. According to them, this makes it legal. Since Rota couldn’t have known when the writ period was going to be, this is an understandable oversight. However, according to my reading of the law, the act is clear on these two sections. Rota should have cancelled the ads. I wouldn’t accuse Rota of cheating because of this. Instead, I’d chalk it up to an unfortunate coincidence that could be interpreted as a violation of the Act.

Elections Canada disagrees and claims that the content doesn’t appear to be election advertising. Then again, Elections Canada is quite a subjective arbiter on what constitutes election advertising and in who’s name elections advertising is done (MP/candidate and federal/local). I suppose the Prime Minister now has the green light to circumvent the spending limit by buying the back page of every single paper in the country (with taxpayer money, natch) to say “Hi, I’m the PM” and as long as he doesn’t say “Vote for me, I’m the PM”, it’s all good.

Is Andrew Telegdi violating the Elections Act?

Take a look at the website of Liberal candidate Andrew Telegdi as it appeared last night:

So, what’s the matter with Telegdi’s website?

Aaron Wudrick, the campaign manager of Telegdi’s Conservative opponent (and Blogging Tory) forwarded an email that he sent to the commissioner.

What are sections 320 and 321 of the Canada Elections Act?

320. A candidate or registered party, or a person acting on their behalf, who causes election advertising to be conducted shall mention in or on the message that its transmission was authorized by the official agent of the candidate or by the registered agent of the party, as the case may be.

321. (1) No person shall knowingly conduct election advertising or cause it to be conducted using a means of transmission of the Government of Canada.

(2) For the purpose of subsection (1), a person includes a group within the meaning of Part 17.

As for s.320, Wudrick is referring to the absence of “Paid for by the official agent for Andrew Telegdi”. Now, this may be the case because Telegdi appears to be using his MP website for the purposes of “re-elect[ing] Andrew Telegdi”. According to Wudrick, we are led to infer that this is his MP site because of the links to constituency office information and constituent services. If this is so, his website is paid for the people of Canada and not by his campaign and that’s where he runs into trouble with the next section of the act. Section 321 states that MP websites cannot be used for election advertising.

As of this afternoon, Telegdi’s site now features “Paid for by the official agent for Andrew Telegdi” but the site still contains constituency service information is a conflict with someone that is now simply a candidate and not an MP according to Wudrick.

UPDATE: Some eagle-eyed viewers have pointed out that Pierre Poilievre’s election site contains constituency service information. I’m not convinced that the display of such information is against the Act, though to have an election site that advertises constituency information and the candidate without it being labelled as paid for by the official agent of a campaign is certainly problematic for a campaign. I called Poilievre and he confirmed that his site is in accordance with the Act as it is in compliance with s.320. Indeed, from what I understand, he could advertise Telegdi’s constituency services if he wanted.

Liberal fundraising, alive and well!

Just landed in my inbox, this alleged Liberal fundraising flyer:

According to the flyer, items to be auctioned off to raise money for eight Ottawa-area federal Liberal riding associations include among other things:

– Golf with Paul Martin
– Hockey tickets with Ken Dryden

It is specified that “the sky is the limit” during the auction and according to the flyer, “A successful bid does not count as a political contribution and is not eligible for a receipt for income tax purposes” and conveniently, “your successful bid will not affect your annual political contribution limit of $1100.” And “bids” from corporations? Why not!

Well, that’s reassuring…

It would appear that the Liberals claim that the federal Elections Act doesn’t apply to this kind of political fundraising because the Liberals say so.

The Liberals used to “raise money” outside of the oversight of the Elections Act by giving hockey tickets to Quebec advertising executives. It’s good to see that if the Liberals go through with this fundraiser as described, they are opening up the process outside of that exclusive network to their Ottawa membership. If so, it’s too bad for Canadians that the Liberals think that circumventing the law is different from breaking it.

Wajid Khan out of caucus

Following this story in the Globe and Mail which broke a few hours ago, this press release just landed in my email inbox:

OTTAWA – Today, Member of Parliament Wajid Khan announced he is stepping aside from Conservative caucus. The decision was made following media reports that he may be charged under the Elections Act over matters dating back to the 2004 election, when he ran as a candidate for the Liberal Party.

“Although I have not yet been served with court documents, Given the circumstances, I am withdrawing from the Conservative caucus to sit as an independent MP. I have also offered the Prime Minister my resignation as his Special Advisor for Middle Eastern and South Asian Affairs.”

Wajid Khan MP
Mississauga Streetsville

What is Garth Turner doing?

As Halton MP Garth Turner stands in the House of Commons and acts offended by the so-called “In and Out” scandal with which the Liberals are trying to tar the Conservatives, he may want to check his own behaviour as his own financing may be in question.

On Garth’s website, where you can donate, the following information appears:

garth-donations.jpg

There are two questionable items in this information, particularly:

  • Cheques are to be made out to “Garth Turner campaign, in trust
  • Garth is promising tax receipts for donations made in this way

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?

UPDATE 10/29, 11am: Garth has changed his website. It now asks cheques to be made out to “Halton Liberal Association – Garth Turner Campaign”.

garth-donations-2.jpg

Will Garth have to return all of the cheques made out to the trust fund?

How will any donor to the trust receive a tax receipt?

What if he has already cashed the cheques and the money has already accrued interest?

Why was a trust fund set up in the first place?

Manufactured scandal

There is a faux controversy brewing in the media and among Liberal bloggers about Conservative ads that ran in the last election. As all parties do during elections, money was transfered between the national party and regional candidates. Conservatives ran their air war well and it was merely one piece of the strategy that paid off for the party that would form government after the contest on January 23rd 2006. Liberals allege that local campaigns funded “national” advertising and that the national campaign funded local ads which were national-like.

In the wake of this constructed controversy, Conservatives have responded by saying that “tag lines” in advertising attributed the ads to local candidates.

The Conservatives also claim that ads tag-lined with the names of local candidates ran locally. The Liberals, however, contest this local claim and also challenge the content of the ads and whether they are local in scope.

For all intents and purposes (but somehow is not approved under the Elections Act) a party could run 30 seconds of dead air and tag the ad to indicate that it was approved by the official agent for Jane or Joe Local, the Conservative/Liberal or NDP candidate. However, section 407 paragraph 1 of the Canada Elections Act states:

407. (1) An election expense includes any cost incurred, or non-monetary contribution received, by a registered party or a candidate, to the extent that the property or service for which the cost was incurred, or the non-monetary contribution received, is used to directly promote or oppose a registered party, its leader or a candidate during an election period.

Election expenses are incurred by local campaigns. Local campaigns bought local advertising to “promote or oppose a registered party, its leader or a candidate during an election period”. So, 30 seconds of dead air wouldn’t be allowed… but, a commercial promoting Stephen Harper and/or opposing Paul Martin is certainly allowed if it is paid for and tagged by the local campaign.

The Tories have kept their noses clean by purchasing separate ad buys for the national and local campaigns (national ads purchased by the national campaign and local ads purchased by the local candidates).

The Liberals may dispute the separate nature of the advertising purchases.

Here’s a signed letter from the advertising company commissioned by the Tories during the 2005/2006 writ period.

aff-thumb.jpg
Click to enlarge

In the letter, it states:

– Advertising buys for the national party were segregated from advertising buys for participating candidates. Retail Media was advised of which Conservative Candidates were interested in participating in additional regional media buys.
– Appropriate regional markets were identified for all participating candidates and specific media buys purchased in those markets.
– Appropriate tag lines were used in all advertisements identifying on whose behalf the advertisement was authorized.
– Appropriate invoices reflecting goods and services rendered were separately issued to participating Conservative Candidates and to the registered party based on the 4 segments identified.

and those 4 segments were:
– Media Buy – rest of Canada (excluding Quebec) – Registered Party
– Media Buy – Participating Candidates
– Media Buy – Quebec – Registered Party
– Media Buy – Quebec – Participating Candidates

So, the Conservative Party (national campaign) and the candidates (local campaign) were separately invoiced. It seems that all of the t’s were crossed and i’s dotted. Given that transfers of cash between local campaigns and the national campaign are perfectly legal, where’s the scandal here? Can somebody cite a section of statute or law that has been broken here?