As Stephen Maher from the Chronicle Herald helpfully reminded us on Saturday:
As campaign adviser Tom Flanagan wrote in his book, Harper’s Team: "Even though there is a cap on national campaign spending, it is easy and legal to exceed it by transferring expenditures to local campaigns that are not able to spend up to their own legal limits."Expenditures. Not just advertising expenditures, but "expenditures." So the question becomes, were advertising expenses the only ones that Conservatives in-and-outed in the 2006 election scheme? Or perhaps the 2004 election? Is the allegation that the Conservatives overspent on advertising by approximately $1.2 million just the start of the money that was "in-and-outed" in some manner?
Is this why the Conservatives were being described as nervous this week at the prospect of the Commissioner of Elections Canada having their documents and computer equipment in his hands? There was a curious article from last Monday that hinted that there could be other reasons for the Conservatives to be concerned. Here's a bit of it:
The fretting in Conservative circles Monday expanded beyond what was in the unsealed Elections Canada warrant into what new avenues into unknown controversies have been opened up by investigators....
Gee, what could there be?
"The fear is no longer about the in-and-out stuff," the official said.
Conservatives party operatives and those in government interviewed for this story said they are trying to determine what classified material Elections Canada might have seized - and worrying that it could be released in a court case.
After two days of unfettered access to the party headquarters, Elections Canada made replicas of all their computer hard drives, carted off 17 boxes of documents, and copied all of the party's emails, Tory officials said.
Polling and avertising data, voter information, and documented descriptions of the party's electoral tactics are all among the things that would have been stored at Tory headquarters.
Could there be follow up from Conservative financial reporting in 2005 and 2006? Recall a series of transactions that the Conservatives came under scrutiny for in July of 2006. They had to do with a Conservative policy convention that took place in Montreal in March 2005 and the Conservatives', um, creative financing of that convention. This 2005 effort, prior to their taking office, was their first attempt, as far as we know, to attempt to burden the taxpayer with electoral expenses by seeking tax credits for expenses that were not properly claimable. Here are the details of the scheme from 2005:
Conservative party officials engaged in a "cheque-swapping" scheme that enabled delegates to get federal tax credits for donations that were not donations.Remember that oldie but goodie?...
Here's how cheque-swapping worked: Individual riding associations footed the bill for their delegates for food, travel, hotel and registration fees associated with the Montreal convention.
In exchange, the conventioneer would make a donation back to the riding association in the same amount.
That would entitle the delegate to a tax receipt for the donation, amounting to an unwarranted benefit from taxpayers -- that is, reimbursement of a portion of their 'donation' through the tax system.
But the donation wasn't a donation in the true sense of the word. Elections Canada has ruled that anyone receiving something that has a commercial value beyond its political value is not eligible for a tax receipt.
Meals, hotel and airfare clearly have commercial value and cannot be construed as a political donation.
An employee of a political party might be able to justify such commercial items in terms of a business expense but even they couldn't claim them as a political donation. (emphasis added)
And later when the Conservatives finally admitted to hundreds of thousands of dollars in the above undisclosed donations, at Christmas time 2006 when few were paying attention, and had to re-file their party returns as a result, they nevertheless maintained that to hold the taxpayer liable for the cost of convention fees was something they were against. I guess when they got caught they were against it, that is.
It would appear the Conservatives had undisclosed cash on hand during the 2006 federal election as a result of the above scheme (see below).
It's still not clear, in the wake of that revised filing what penalties were applied to the Conservatives for failure to report the fees associated with that 2005 convention, or whether the Conservative returns for 2005 and 2006 are presently a matter under investigation. The re-filing for 2005 involved a significant amount of money:
This effort by the Conservatives in 2005 to get sizeable tax credits for "donations" to riding associations that were not donations was the first indication of the Conservatives targeting the taxpayer in too-clever-by-half political financing activities. More reporting on that scheme can be found here, in a Hill Times report with some helpful expert context.
Last Thursday, the party filed a revised financial report for 2005 with Elections Canada, acknowledging that it did not report delegate fees collected for its national convention that year as donations, contrary to political financing laws.
In the revised report, the Conservatives have "reclassified revenue related to the 2005 convention,'' disclosing an additional $539,915 in previously unreported donations, an extra $913,710 in "other revenue,'' and an additional $1.45 million in "other expenses.''
The report does not explain what constitutes other revenue or other expenses.
Moreover, the party reports almost $700,000 in previously undisclosed transfers from riding associations, presumably accounting for ridings that helped subsidize the cost of attending the Montreal policy convention for their delegates.
All of this is to say that you can see the potential scope of Conservative election and party activity financing creativity which has apparently been in play for years now. The advertising in the 2006 election, that we're all presently focussed upon, may just be the tip of the iceberg.