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Gerry Lougheed

An Ontario Liberal fundraiser faces criminal corruption charges in an alleged bribery scandal, accused of offering a former candidate a government job on behalf of Premier Kathleen Wynne in exchange for dropping out of a by-election race in Sudbury.

The scandal is the first ethical imbroglio of Ms. Wynne's majority mandate, and the charges amplify tough questions about her involvement in the matter that have dogged the Premier for the better part of a year.

It also shines a light on the murky world of government patronage.

Bartering appointments for political favours is considered common practice – a former Ontario finance minister even wrote openly in his memoirs about trying to get an opposition MPP to resign his seat by enticing him with a job – but it is extraordinary for such negotiations to result in charges.

"This has been a very uncommon investigation," the Ontario Provincial Police said in a statement on Thursday.

Gerry Lougheed Jr. faces one count of unlawfully influencing or negotiating an appointment and one count of counselling an offence not committed. A Sudbury businessman who owns a funeral home, Mr. Lougheed is also a fundraiser for the Liberals and was appointed by the government to the Greater Sudbury Police Services Board. He is scheduled to appear in a Sudbury court on Nov. 18. If convicted, he faces up to five years in prison.

In a statement, Mr. Lougheed vowed to fight the charges and said he would resign from the police board.

"Today I was served a summons by the OPP that they are proceeding with charges against me. I will be vigorously defending these charges in the courts," he said. "I have no further comments at this time as this matter is now before the courts."

Mr. Lougheed, 61, is accused of offering former Liberal candidate Andrew Olivier a government job if he would give up his bid for the party's nomination in the Feb. 5 by-election. Mr. Olivier recorded a conversation in which Mr. Lougheed said Ms. Wynne wanted Mr. Olivier out of the way so her preferred candidate, Glenn Thibeault, could take the nomination unopposed.

Patricia Sorbara, Ms. Wynne's deputy chief of staff, has also been accused of offering Mr. Olivier a job, but she has not been charged.

Ms. Wynne stood by Mr. Lougheed throughout the scandal, rejecting calls to pull him from the police board. On Thursday, the Premier dodged questions about who told Mr. Lougheed to try to persuade Mr. Olivier to step aside.

"It is now for the court system to ask those questions, to deal with the situation," she told reporters after an unrelated event at the Exhibition grounds in Toronto. "Of course it's upsetting."

Asked if the charges would taint the Liberals, Ms. Wynne said: "That will be up to the people of Ontario to decide."

The Liberals have been repeatedly accused of shoddy ethics during 12 years in government – including wasted money at eHealth and the $1.1-billion decision to cancel two gas-fired power plants. But so far, none has had much effect on Ms. Wynne, who has successfully distanced herself from the troubles of her predecessor, Dalton McGuinty, and was re-elected last year with an increased vote share. The charges against Mr. Lougheed, however, will ensure the Sudbury situation, the first serious scandal to erupt on Ms. Wynne's watch, will continue to haunt the party.

Mr. Lougheed's dealings with Mr. Olivier are not the first time the Liberals have tried to use government jobs to solve political problems. In his autobiography, former finance minister Greg Sorbara wrote that he unsuccessfully offered NDP MPP Rosario Marchese an appointment in 2012 to get him to give up his seat, a Toronto riding the Liberals thought they could win. Also in 2012, Progressive Conservative Elizabeth Witmer resigned her seat when the Liberals appointed her as chair of the Workplace Safety Insurance Board. The NDP won the resulting by-election.

Mr. Thibeault, who won the by-election, refused to say on Thursday if he knew of Mr. Lougheed's job discussions with Mr. Olivier at the time. He called it "a ridiculous question."

"That's something that I can't comment on because, again, that whole issue is relating to this case and it's right before the courts," he said after Question Period, in which both opposition parties grilled the government on the scandal.

It all began last December, when Mr. Olivier, a Sudbury mortgage agent, decided to run for the Liberal nomination in the by-election. He was the Liberal candidate in the general election six months earlier, losing to the NDP. But Ms. Wynne had secretly brokered a deal for Mr. Thibeault, then the federal NDP MP for Sudbury, to switch parties and run provincially.

Both Ms. Sorbara and Mr. Lougheed allegedly tried to persuade Mr. Olivier to give up his nomination bid. Mr. Olivier, who is quadriplegic and has difficulty taking notes, recorded the conversation.

"I come to you on behalf of the Premier … to ask you if you would consider stepping aside," Mr. Lougheed told Mr. Olivier. "The Premier wants to talk to you. We would like to present to you options in terms of appointments, jobs, whatever."

Mr. Lougheed also told Mr. Olivier to expect a "reward" for quitting the by-election race.

"I hate to sound kind of Machiavellian about it, but at the end of the day, if you take the high road on this – what is your reward?" Mr. Lougheed said. "What do they say? 'Andrew Olivier took a bullet for us, so what do we give to Andrew Olivier?' And by the way, I've already raised that question."

Ms. Sorbara dangled several possible jobs, including work in Mr. Thibeault's constituency office, an appointment to a provincial disability panel or a post on the Liberal Party executive.

"We should have the broader discussion about what is it that you'd be most interested in doing and then decide what shape that could take," she said. "Whether it's a full-time or a part-time job at a constituency office, whether it is appointments to boards or commissions, whether it is also going on the executive."

Mr. Olivier rejected these overtures and released the recordings. The Progressive Conservatives called in the OPP. Ms. Wynne is not under investigation, but police questioned her as part of the probe.

In February, Elections Ontario ruled Ms. Sorbara and Mr. Lougheed broke the provincial Elections Act, which prohibits offering a person any inducement not to run in an election. Elections Ontario, which does not have the power to lay charges itself, referred the matter to the OPP. The investigation into those possible provincial charges is ongoing.

PC Leader Patrick Brown called on Ms. Wynne to step aside until the criminal charges against Mr. Lougheed are resolved.

"Gerry Lougheed wasn't freelancing here," he told reporters at Queen's Park. "I think the Premier has dishonoured her office."

NDP Leader Andrea Horwath said Ms. Wynne should tell people whether she had any involvement in telling Mr. Lougheed to offer Mr. Olivier a job.

"The Premier doesn't need to go to court to let people know exactly what was going on," she said. "The Premier needs to come clean and stand up and take responsibility. That's what leadership is."