Search warrants and a sworn affidavit to support last week's police raid on Conservative Party headquarters spell out an alleged “in and out” scheme under which the party allegedly funnelled $1.1-million through the local election campaigns of individual Tory candidates so they could spend more on their national campaign.
The party is also accused of filing a return with Elections Canada that “it knew or ought reasonably to have known contained a materially false or misleading statement,” a warrant states.
As expected, the affidavit alleges that in the 2005-06 election campaign, the Conservatives' national headquarters transferred money to 67 local candidates – who immediately transferred it back as “payment” for campaign advertising. Amounts ranged from just over $2,000 to $52,000, it states.
The “scheme” had two significant consequences, the affidavit states: First, it allowed the Tories to spend $1.116-million over and above the spending limit on election expenses. Secondly, it allowed 65 of the 67 local candidates to claim a 60-per-cent rebate on the amounts, totalling $777,000, to which they weren't entitled.
Essentially, Ronald Lamothe, the assistant chief investigator of the Office of the Commissioner of Canada Elections, alleges in the affidavit that the party was trying to get around the election spending limit of $18,278,278.64 by getting local candidates to pay for national ads – and then asking Elections Canada to reimburse the candidates for those costs.
“The media buy was known to and implemented by the most senior officials of the Conservative Party of Canada and the Conservative Fund Canada,” Mr. Lamothe states in the affidavit. “None of the regional media buy advertising time was a cost incurred by the candidates or their official agents.”
The Tories have suggested the raid was payback for the party's lawsuit against Elections Canada, which was launched after Election Commissioner William Corbett began probing the alleged scheme. The Conservative candidates are suing for reimbursement of those questionable expenses.
Government House Leader Peter Van Loan said Monday the matter boils down to a legal dispute over electoral advertising.
“We say that a local campaign should be free to advertise on national messages if it wishes and that Elections Canada shouldn't get into controlling the content,” he told CBC Newsworld.
“We always encourage our riding campaigns to spend as fully as they can to make our campaign as a party as strong as possible, and that's exactly what happened in the last election,” he said, adding everything was fully disclosed to Elections Canada.
None of the allegations has been proven in court.
The affidavit says the scheme came to light during a review of an invoice submitted by Vancouver East candidate Elizabeth Pagtakhan. Asked to explain a $29,999.70 election expense, Ms. Pagtakhan's official agent, Denny Pagtakhan, told an auditor “I think we contributed to TV national advertising. There was no way we can spend our limit so we were asked by the Party if we can help contribute,” the affidavit says.
Altered invoices?
As the probe expanded, Elections Canada reviewed other questionable invoices that were provided by Conservative candidates and related to Retail Media, the Toronto-based firm that made the ad buys for the national party. Of these invoices, 15 allegedly included the names of individual candidates on Retail Media letterhead, even though Retail Media told Elections Canada it dealt only with the party and “did not generate invoices to candidates or electoral districts.”
For instance, one invoice in the amount of $39,999.91, filed on behalf of Steve Halicki, candidate for the Ontario riding of York South-Weston, was on Retail Media letterhead, the affidavit states.
When executives with the company were shown the invoice, one said “the invoice must have been altered or created by someone, because it did not conform to the appearance of invoices sent by Retail Media to the Conservative Party of Canada with respect to the media buy,” the affidavit states.
