Conservatives Ignore Subpoenas to Appear Before Parliamentary Ethics Committee
by Joan Russow

The minority Conservative government is being investigated by Elections Canada, for election funding irregularities. Elections Canada claims that federal Conservatives contravened the Elections Act by an-in-and-out money transfer scheme; Elections Canada estimates that $1.3-million for national advertising was passed through the accounts of at least 67 local candidates in the 2006 election campaign. On August 11-14, Parliamentary Ethics Committee heard witnesses revealing Conservative Party's funding scheme.

 

For the 2006 election the Conservative Party funded national ads through RETAIL MEDIA - a subsidiary of WPP whose clients below can be seen at http://www.wpp.com/wpp/companies/

 

The Conservative Sponsorship Nemesis: Plumping up election expenses to increase rebates, using false spending estimates and potential rebates to secure advance private loans, ignoring Parliamentary committee subpoenas, subsidizing high profile international ad agency... The Conservatives won the last election by defrauding Elections Canada and Canadian citizens.

 

 

During the 2006 election, the Federal Conservative Party transferred funds to individual candidates who immediately returned the funds to the central office. Under the Elections Act, each candidate has a limited amount of money that can be spent on the election, and each candidate that receives over 10% of the vote, is eligible for a rebate, from the Elections Canada, for 60% of the election expenses.

The scheme involved the money that was transferred from the Central Party to the local candidates to be returned within 24 hours to the Central party. This money was then registered as an expense by the local candidates thus plumping up each candidate’s expenses, and in the event that the candidate received over 15% of the vote, the candidate would receive an inflated amount of rebate.

On August 11, the Standing Committee on Access to Information, Privacy and Ethics met to examine “ the activities , during the 2006 election, of the Conservative Party of Canada in relation to certain election campaign expenses and ethical standards of public office holders”. The Conservative members of the Committee, continually interrupted the proceedings with a series of unjustified “points of order”, demonstrating little respect for the Chair, and interrupted and insulted witnesses. At one point, one of the Conservative members questioned the integrity of a witness. The witness, who was not even one of the 67 candidates cited in the investigation, had testified that the “in-and-out” scheme in his riding involved $14,000, and that he had received a rebate of $8000, The Conservative member of the committee essentially accused the witness of lying and claimed that the witness had not received the required 15% of the vote and had thus not been eligible for the rebate. It was subsequently pointed out that the witness had received over 15% and the Conservative member was obliged to apologize.

CONSERVATIVE CANDIDATES OR OFFICIAL AGENTS IGNORE SUBPOENA

On August 13, Paul Szabo, the chair of the Parliamentary Ethics Committee reported on the fact that several Conservative Candidates and their agents indicated that they would not appear, and as a result the Chair issued subpoenas on August 1st and the subpoenas were served on August 6. In several cases the subpoenas were ignored. The financial agent of the HON Josee Verner indicated that he had been told by the Conservative party not to appear. He was subsequently served with a Subpoena on August 6, and then indicated that he would not be able to appear during the week of August 10.

Pat Martin, from the NDP, indicated that there had to be consequences the failure to appear after being subpoenaed. He stated that it is an important issue to be discussed at the next session. He pointed out that only 3 of the 26 members who were subpoenaed had actually appeared.

CONSERVATIVE USED FUTURE POTENTIAL REBATE AS COLLATERAL FOR PRIVATE LOAN

At the August 13 session, Steve Halicki referred to the scheme as being a creative way of funding. About $50,000 had been transferred into his riding account and then returned. His creative funding resulted in his using the potential $30,000 rebate from Elections Canada to secure a private loan. This rebate of 60% of his electoral expenses was conditional, of course, on his receiving 10% of the vote. Thus with this "creative way of funding" resulting in  plumped- up election expenses he was able to borrow money from a private lender.

CONSERVATIVE MEDIA ARRANGED THROUGH SUBSIDIARY OF MAJOR INTERNATIONAL AD AGENCY

David Campbell from Retail Media revealed that Retail Media was a branch business of the International advertising giant WPP - see http://www.wpp.com/wpp/
It boasts on the website.

WPP at a glance:

WPP is one of the world's largest communications services groups. We are made up of leading companies in:
Advertising; Media Investment Management; Information, Insight & Consultancy;
Public Relations & Public Affairs; Branding & Identity; Healthcare Communications;
Direct, Promotion & Relationship Marketing; Specialist Communications
Facts & figures
Number of employees     110,000 (incl. Associates)
Number of offices     2,000+
Number of countries     106
Reported revenues     £6.1bn (2007)
Reported billings     £31.7bn (2007)
Market capitalisation     £7.7bn (end December 2007)

CONSERVATIVES HAVE BEEN DUPING AN UNAWARE CITIZENRY

"Many Canadians are not aware of the provision in the Election act for candidates, with 15% or more of the vote, to receive [previously 50%] now 60% rebate for advertising expenses. The Conservative scheme of in-and-out funds recorded as local candidate expenses but spent in national campaign, in violation of elections act, ended up plumping up local expenditures enabling higher rebates. It is difficult to understand why the devious Conservative practice, which undoubtedly contributed in some way to the election of a minority Conservative government with 33% of the vote, has not been given a higher profile in the media. The Conservative minority government has continuously acted not only as majority government but also as a party above scrutiny. Every voter in Canada needs to watch the live coverage on CPAC of the Parliamentary Ethics committee’s investigation into the Conservative Sponsorship Nemesis. There must be a full investigation into this misappropriation of funds for political gain." (Joan Russow Comment. Toronto Star, August 12, 2008)

August 14, 2008
Morning session;

CONSERVATIVES MAY BENEFIT FROM THE POTENTIAL DELAY IN HEARING THE CASE

There is not doubt that the public interest would certainly be served by exposing the fraudulent practice used by the Conservatives in the last election. There is sufficient evidence that this practice occurred and that the practice was condoned by the Conservative Party. One Conservative witness even referred to the scheme as being a creative fund raising scheme benefiting in the long range the Conservative Party. The success of the case against the Conservatives depend on the willingness of the Conservative candidates to be forthright, and given that many of them have refused to even honour summons issued by the Parliamentary Committee. [ although, presumably a summons from the public Prosecution might not be as easy to disregard]

WITNESSES: Chantal Proulx and Don Beardall from the Office of the Public Prosecution of Canada

PAT MARTIN from the NDP raised a serious question about the potential that the case before the Office of the Public Prosecution might not even be resolved before the next election (either before in 2008 or on the fixed election date in 2009), and that the Conservatives could even adopt the same in –and –out funding scheme in the next election. In response to his question, the witnesses from the Office of the Public Prosecutor indicated that there was no guarantee that the case would be heard before the next election.

CONSERVATIVES TRANSFERRED NOT JUST FUNDS BUT EXPENSES

WITNESS. Mark Mayrand, Chief Electoral Officer

In response to questions asked by various opposition members, Mark Mayrand confirmed that the transfer of funds from the Central Campaign to the Riding Associations, is permitted. What is not permitted is the transfer of expenses of the local candidates campaign.

When asked if he had determined if this practice had occurred with other parties during the 2006 election, Marc Mayrand responded: No.

CONSERVATIVES EXCEEDED THEIR NATIONAL SPENDING LIMITS BY TRANSFERRING FUNDS TO THE RIDING ASSOCIATIONS.

It was pointed out by Committee member that by passing on expenses to local ridings the Conservative National Election Campaign superseded its national spending limits by 1.3 million. It was also noted that political parties benefit in a number of way such as issuing tax receipts for donations with tax benefit of up to 76%, paying $1.75 per vote, and providing rebates, of 60% of election expenses, for candidates receiving 10% of the vote.

Marc Mayrand indicated that in cases where the expenses were under investigation, rebates had not been made. This point was not clear; it is possible that rebates were made before the investigation was undertaken, and it was not clear whether or not an investigation would result in the re-imbursement of the rebate.

CONSERVATIVE CANDIDATES AND OFFICIAL AGENTS WERE WILLING TO SIGN A FALSE EXPENSE FORM

Official agent and candidate both sign off and attest that the expenses occurred in the local campaign and at fair market value. Both the Conservative candidates and their agents who are under investigation apparently signed the required documents even though they knew that the expenses were not incurred locally by their campaigns.

CONSERVATIVE PARTY DID NOT COMPLY WITH THE ADVERTISING REQUIREMENTS OF FAIR MARKET VALUE

It was pointed out that in three adjacent ridings in Toronto, the same ads were recorded, by the Conservative candidates, as costing a different amount. The implications of this is that the expenses were accounted for in relation to the range of spending limits for the candidates.

CONSERVATIVE CANDIDATES PROBABLY WOULD NOT HAVE BEEN ABLE TO DEMONSTRATE THAT THE NATIONAL ADS WOULD HAVE BENEFITED THE LOCAL CANDIDATES.

Richard Nadeau, Bloc MP made the distinction between pooling of resources to collectively benefit the candidates, and the practice of in-and out National campaign ads. Marc Mayrand responded that “it must be sure that it benefits the candidates” and that “I am not satisfied that all the expenses claimed were of benefit to the candidate”

CONSERVATIVE CANDIDATES AND AGENTS WERE NOT APPRISED OF THE REGULATION UNDER THE ELECTIONS ACT

Ricard Nadeau also raised the issue of the need for proper training of candidates and their agents so that this Conservative practice would never happen again. He proposed that Elections Canada should do this across the country.
Marc Mayrand responded that we hold training sessions regularly throughout the country. He cited the problem of late selection of agents at election time, and that the agents are already overwhelmed. He neglected to mention that there are meetings, of representatives of the registered parties at the Election Canada office in Ottawa, and that this issue could be raised at that time and all party riding headquarters apprised of the regulation related to expenses.

CONSERVATIVES MIGHT BE EMBROILED IN ALL LEVELS OF TAX EVASION BECAUSE OF THE SCHEME

Marcel Proulx raised the issue of discrepancy in provincial taxes and that the taxes were not applied before the assessment of GST. This might indicate a problem with the invoices submitted by Retail Media, the agent acting for the National Conservative Ad Campaign.

The Committee hearings continue and are broadcast live on CPAC.
Contact: jrussow@gmail.com