Election financing triumph turns sour

OTTAWA — A court ruling initially hailed as a triumph by the Conservatives turns out to contain a bitter pill that could poison the electoral prospects of three senior cabinet ministers.

OTTAWA — A court ruling initially hailed as a triumph by the Conservatives turns out to contain a bitter pill that could poison the electoral prospects of three senior cabinet ministers.

Last January, a Federal Court judge rejected Elections Canada’s claim that advertising expenses attributed to Tory candidates during the 2006 federal election should have been reported as national campaign expenses

The Conservatives claimed “total vindication” at the time, while Elections Canada sought leave to appeal.

But now the Tories are also appealing, hoping to strike down a little-noticed section of the judgment that would mean up to 10 candidates — including Foreign Affairs Minister Lawrence Cannon, Natural Resources Minister Christian Paradis, Intergovernmental Affairs Minister Josee Verner and former minister Maxime Bernier — exceeded their campaign spending limits in 2006.

If the ruling stands, the four sitting Tories and up to six former candidates could face charges. If convicted, they could be barred from running again or even be barred from sitting in the House of Commons, much less cabinet.

Because of the potentially grave consequences, Elections Canada is asking that Justice Luc Martineau’s ruling be stayed until the appeals are completed.

“These nine or 10 candidates could face prosecution and, if convicted, face significant consequences,” the independent elections watchdog argued in an affidavit filed with the Federal Court of Appeal late last month.

“In particular, three could lose their current appointments as ministers.”

“Apart from any conviction,” the agency goes on, “this option would cast doubt on the legitimacy of the election of the four candidates … who are current members of Parliament.”

Martineau’s ruling had no bearing on a separate investigation into the so-called in-and-out election financing scheme which is still being conducted by William Corbett, commissioner of elections.

The Canadian Press has learned Corbett concluded long ago that there are reasonable grounds to believe a criminal offence was committed under the Canada Elections Act. Even without completing his investigation, Corbett referred the matter last June to the director of public prosecutions, who is still considering whether to lay charges.

Dan Brien, spokesman for the public prosecutor’s office, confirmed the referral. Asked why no decision has been made after almost a year, he said: “It’s a complex matter.”

“It relates to a lengthy and ongoing investigation by the commissioner of elections.”

Under the in-and-out gambit, the national Tory campaign transferred money to individual candidates, which was then transferred immediately back to headquarters ostensibly to pay for regional radio, TV and newspaper advertisements. Some of the ads did little to directly promote the candidacies of the individuals who paid for them.

In a case brought by the financial agents for two of those candidates, Martineau ruled that chief electoral officer Marc Mayrand could not refuse to reimburse candidates for their share of the advertising expenses.

But in a little-noticed detail, he also found that one of the two candidates should have paid — but did not — an equal share of the full market value of regional advertising buys. Rather, the amount charged appeared to have been “purely arbitrary,” based on what the candidate could afford without exceeding his spending limit.

In documents supporting its motion to stay Martineau’s ruling, Elections Canada applies the equal share dictum to all 65 candidates involved in the regional media buys. The agency finds up to 10 of them would have exceeded their spending limits, including Cannon by $7,618, Verner by $13,304, Paradis by $10,188 and Bernier by $20,138.

In its appeal, the party suggests Martineau’s ruling violates freedom of speech guarantees in the Charter of Rights because it “effectively limits a candidate’s ability to run ads if other ridings in the same (regional advertising) pool are unable to contribute to the same level financially.”

The party says Martineau should have ruled that candidates were required to pay only those amounts to which they had “specifically agreed, irrespective of whether it was an equal share or not, provided that the pool of candidates together paid the full commercial value.”

The investigation and litigation surrounding the in-and-out controversy has proved costly for Elections Canada.

In a March letter to the Commons procedure and House affairs committee, Mayrand said the agency had spent almost $360,000 on the court case to that date. Corbett’s investigation, meanwhile, had racked up costs of $1.4 million by the end of 2009.