PARLIAMENT HILL—The Conservative party and its financial arm pleaded guilty Thursday to a total of four charges of exceeding the party’s campaign expenses for the 2006 federal election and failing to report the proper amount, but in a plea bargain that saw related charges dropped against four top Conservatives who masterminded or approved the so-called “in and out” advertising scheme at the centre of the case, both the Conservatives and their opponents claimed victory.Charges of willfully exceeding the party’s expense limit, by what Elections Canada and the Public Prosecution Service of Canada claimed was a total $1.2-million, were dropped against Conservative Senator Irving Gerstein, head of the PC Canada Fund, Senator Doug Finley, the director of the election campaign, Mike Donison, party director at the time, and Susan Kehoe, the party’s chief financial officer during the election campaign.
In negotiations that took place prior to a suddenly-announced court appearance Thursday, the party and its financial arm, both charged last February with willfully exceeding the expense limit and willfully failing to report the full amount, pleaded guilty to less serious negligence charges of exceeding the limit and failing to report the full amount. Their lawyer insisted there was no intent to break the law.
With prior agreement of the prosecution and lawyers for the party and the PC Canada Fund, Ontario Court of Justice Judge Celynne Dorval fined the Conservative Party the maximum of $25,000 each on the two lesser counts it pleaded guilty to and the maximum of $1,000 each for the two guilty pleas entered by the PC Canada Fund.
The party’s spokesman, Fred DeLorey released a news statement calling the outcome a “big victory” for the Conservatives.
“Every single Conservative accused of wrongdoing has been cleared today,” Mr. DeLorey said. “The Conservative Party of Canada plays by the same rules as everyone else, we acted under the law as it was understood by Elections Canada at that time.”
The entire issue is not yet completely over, as the Supreme Court of Canada has agreed to hear an appeal by the party from a separate Federal Court of Appeal judgment that went against it in a related civil claim.
Elections Canada issued a statement emphasizing gains made in the prosecution, which resulted from an investigation that began in May, 2007, by Elections Commissioner William Corbett.
“Elections Canada notes that the prosecution reinforces the importance of the spending limits for ensuring the fairness of our electoral system, including the distinct election spending limits for candidates and political parties,” said the statement issued by John Enright, Elections Canada’s manager of media relations at the agency. “It also confirms there can be no transfer of expenses.”
Chief prosecutor Richard Roy later told reporters the charges against all four party officials were withdrawn because it would not be in the public interest to pursue them, one of the two main criteria for continuing a prosecution. He also noted in the courtroom that a trial would have been costly, up to six months, and that the four had contributed to an agreed statement of facts that formed the basis of the plea bargain and put the campaign advertising transactions on the public record.
Mr. Finley and Mr. Donison planned and implemented the scheme in which the party transferred a total of $1.38-million in expenses for its national advertising campaign to individual candidates, who transferred the money back to national headquarters as payments for shares in regional ad buys, comprised of ads made for the party’s national campaign, but claimed the expenses for their own campaigns. Mr. Gerstein and Ms. Kehoe authorized the transactions.
As outlined in the statement of facts that the prosecution service and lawyers for the four individual defendants agreed to, cash transfers from political parties to individual candidates are allowed under the Canada Elections Act, but it is illegal to transfer expenses from one to the other.
The lawyer representing Mr. Gerstein and the party, Mark Sandler, pointed out in court Mr. Gerstein had insisted, when the transfer scheme was first proposed, that the plan had to “comport” fully with the Canada Elections Act. The statement of facts stated Ms. Kehoe told Mr. Finley and Mr. Donison that the party’s legal counsel had provided advice that the scheme was legal as long as the candidates were asked to pay for regional advertising, not national advertising, and that the ads had included a declaration of authorization by official agents for the candidates.
But the statement of facts that both sides agreed to before the court appearance demonstrated that the Conservatives were conscious about the legal limits and restrictions under the Canada Elections Act.
The day the election campaign began, on Nov. 29, 2005, Mr. Finley wrote to Mr. Gerstein asking for authorization to send cash to electoral districts during the campaign so Mr. Finley could then have them “return monies to me under their writ to pay for advertising for example.” He said the plan involved a “variety of perfectly legal artifices” and it would allow the party to in effect transfer TV and radio advertising costs from the party books to local campaigns. Mr. Finley told Mr. Gerstein it would allow the party to “run a major slam dunk in the extra two campaign weeks.”
The campaign for the 2006 election was 56 days long, stretching through Christmas to election day on Jan. 23, 2006, and three weeks longer than usual. The statement of facts also shows the Conservatives were concerned in December about exceeding their election limit if they spent all the money that had been booked for national advertising.
But, Mr. Sandler told Judge Dorval, there was no evidence of deliberately evading the spending limit.
The party, in the statement of facts, agreed only that it had exceeded its spending limit of $18,278,278.64 by $420,480.12, and that ad money transferred to only 29 candidates should have been attributed to the party. It blamed that transgression on “flaws” in the implementation of what the party said was otherwise an allowable system of transfers and payments under the law.
The prosecution service claimed improper transfers and payments in a total of 76 electoral districts, as part of its contribution to the statement of facts, which, despite, the differences in terms of improper expenses and other areas, both sides agreed to.
NDP MP Pat Martin (Winnipeg Centre, Man.), whose riding was one in which the Conservative party admitted to $10,833 in ad expenses that should have been attributed to the national Conservative campaign, said the party’s conviction was a victory.
“My faith in the system’s restored,” he told The Hill Times.
“The fact she [Judge Dorval] fined them the maximum tells me she didn’t buy the ‘innocent misinterpretation of the rules’ defence,” he said. “This was no misunderstanding, it was widespread deliberate and calculated fraud on a grand scale. Too bad the penalties are so paltry. That’s pin money for the CPC.”
Liberal MP Marc Garneau (Westmount-Ville-Marie, Que.) also welcomed the conviction against the party, and called Mr. DeLorey’s claim of victory “laughable.”
“The court found them guilty of exceeding the spending limit by $1-million, that gave them a huge advantage,” said Mr. Garneau. “People might not understand the intricacies of the in and out scheme, but they do understand this gave the conservatives an advantage.”
Origin
Source: Hill Times
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