Not enough room for Garth in parade

It appears that there will only be one jolly bearded man in a suit spreading cheer to the little ones in this year’s Milton Santa Claus Parade. That is, there will only be one that was invited.

My hometown’s local newspaper (full disclosure: years ago I was once a paperboy for the outfit), had the following story about Halton MP Garth Turner and the latest controversy he’s involved in.

Controversial Halton MP Garth Turner is butting heads with the Milton Santa Claus Parade Committee after learning the only politician allowed in the festive event this year is Mayor Gord Krantz

One of the parade organizers, Mike Ricker, had the following to say:

“It’s got to the point where I want to quit the parade. I’ve volunteered 200 or 300 hours this year. To throw our credibility down the drain… He just wants to promote himself rather than the well-being of the whole parade.”

Turner, Halton’s controversial [Liberal] MP, was told that there’s not enough room for him, for PC MPP Ted Chudleigh or for Regional Chair Gary Carr. Garth’s planned crashing of Milton’s Santa Claus parade will ruin the credibility of parade organizers with the other politicians that they’ve turned down, according to Ricker.

Isn’t this supposed to be for the children?

UPDATE: Garth has sent out this press release:

Garth Turner , MP Constituent Help Centre
Parade Day Open House

For immediate release

Milton – The office staff of Hon. Garth Turner, P.C., MP for Halton will be serving up hot apple cider and holiday greetings from their constituency office along the Milton Santa Parade route.

“Many businesses and services along Main Street have an Open House tradition where they invite family and friends to drop by during the parade. My office, thinks this would be a great way to celebrate the launch of the holiday season.” said Turner.

Parade watchers young and old are invited to drop by Garth Turner’s Help Centre at 86 Main Street East from 2:00 to 3:00 pm on Sunday, November 25th to warm up with a cup of cider.

-30-

Questions for Garth Turner

Sunday night, I broke the story that Garth Turner, Liberal MP for Halton was collecting funds from donors into a trust. As specified by Elections Canada, trusts are generally forbidden as one cannot pay out of a trust the many donations that went into a trust. Check the full story here.

Garth’s response was both predictable and unpredictable. Predictably, he alluded to some well-organized conspiracy that was out to get him and immediately claimed victim status. Unpredictably though, he acknowledged his mistake and has taken steps to significantly reconfigure how he will be collecting money in the future. However, there are significant questions that remain.

  • Since this comes on the heels of Liberal questions in the House about election spending, they have much to do to get their own campaign finances in order. This week, we’ve seen apparent campaign finance discrepancies by Bonnie Crombie (more on that soon), Blair Wilson and now Garth Turner. How can they criticize the Conservatives before they sort out their own affairs?
  • Since many cheques to Garth Turner were made out to “Garth Turner Campaign, in trust”, does this mean that he’ll have to return all of that money? All cheques should have been made out to the “Halton Federal Liberal Association”.
  • In April of this year, Garth held a fundraising event with former Liberal leadership candidate Ken Dryden. Garth wrote:

    “Tonight was also an important milestone in my local election campaign. We exceeded our fundraising goal and, in the past three weeks, have raised five times more funds than the local Conservatives did in an entire year. All those bag signs, arterials, stakes, wire frames, ties and pounders in my garage are now paid for in full. We have cash in the bank � enough to get seriously and immediately ballistic the moment the writ is dropped.”

    Ballistic or busted? Were these fundraising efforts for naught? If that campaign materials was purchased by a private account and not the one held by the Federal Liberal Riding Association, Garth cannot use these campaign materials.

  • This represents a huge oversight by Dion’s new czar of fundraising. Does this represent poor judgment on behalf of the Stephane Dion? Will Garth resign this position? What can be said of the fundraising health of the Liberal party if Garth has been directing it?
  • Garth claims that he transferred money from a business account to the Liberal Electoral Association. Last time I checked, this is not allowed. Ironically, Garth criticizes the Conservatives for transferring money between EDAs and the federal party (which is allowed). “In and Out” is it called? Or is this “Out to In”? I’ve lost track.
  • If the Liberal Electoral Association accepted money from this business account (as Garth claims) they would also seem to be in violation. Could this association become de-registered by Elections Canada?
  • Garth is right in that being an independent can be tough. Independents do not have riding associations (EDAs). They can raise money, but they cannot issue tax receipts. Garth writes:

    “When Mr. Harper threw me out of caucus, I sat as an indie for a number of months, during which people sent me money because they took pity on my soul”

    I hope these people don’t expect to get tax receipts. But really, now that Garth is a Liberal, what is the status of this money? He can’t transfer money from this “business account” (in trust) to the Liberal EDA.

  • What are the consequences of this oversight? If this gets investigated, will Garth step aside? Will Dion ask him to step aside?
  • In a past life, wasn’t Garth a finance guru? Wasn’t he Minister of National Revenue? Is this mistake oversight or a sophisticated financial operator pushing the envelope?

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?