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A rare internal audit at the University of Calgary into the use of more than half a million dollars in research funds is raising far-reaching questions involving Elections Canada and the Canada Revenue Agency.

This week, a long-awaited internal audit found that donations to two research accounts at the school were used to pay expenses for the Friends of Science, a Calgary based anti-Kyoto group with ties to the federal Conservative Party.

Friends of Science used the money to produce and pay for radio ads in key Ontario ridings during the 2006 election campaign, placing university research dollars at the centre of what the opposition Liberals this week in the House of Commons called an "illegal" advertising campaign.

The arrangement raises questions about the oversight of university research dollars and the influence of private individuals and organizations.

At the centre of the issue is Barry Cooper, a University of Calgary professor and a familiar figure in the oil patch.

The political science professor is a regular columnist in the Calgary news media and a vocal critic of individuals who have "bought in to the global warming panic," as he put it recently.

He was in charge of the two research accounts that the report finds were used "as conduits," to finance Friends of Science activities.

He is also an affiliate of the group.

The Globe and Mail has learned that Friends of Science unsuccessfully sought funds from at least two other Calgary organizations with charitable status.

"In a situation like that, the alarm bells should ring immediately," said the head of one of the Calgary charitable groups.

The individual said Canada Revenue's rules are clear that a charity cannot support any activity that could be interpreted as partisan, especially during an election campaign.

The auditor's report, which was heavily edited before its release, suggests university research dollars were used for just that. Money from two accounts, one for "research on the climate change debate" and another for a "climate change video project," paid for Friends of Science activities.

Those activities included the making of the radio ads and a related video, the purchase of air time, and a payment to Morten Paulsen Consulting, a firm run by a long-time Conservative member and party organizer who was a volunteer spokesman for the Conservatives at the time.

The ads "may be interpreted as seeking to change the government's policy on global warming and the Kyoto Protocol and therefore a political activity," the report finds.

The accounts, which together attracted more than $508,000 in donations, were closed last year by the university after complaints to Elections Canada.

The university, as a result of the probe, has moved to tighten controls over research dollars and their spending.

By tapping into the two research accounts, set up in 2004, Friends of Science, which is not a registered charity, got access to funds from anonymous donors who received a tax deduction for their support of university research.

Even with the release of this week's report, little is known about the individuals and organizations involved.

"That's the question that still remains - who these donors are," said Kevin Grandia, a Vancouver public relations consultant and contributor to desmogblog.com, a climate change website and one of the parties that complained to Elections Canada. He has long raised questions about a possible link between big oil and the group's anti-Kyoto efforts.

"Speculation about the source of this money has been why people are concerned about this case," said Dorin Barney, an associate professor of communication studies at McGill University who does research into the politics of science and technology in Canada. "What that money has funded is highly political work that reflects a position that is to the advantage of an industry. That's why people are concerned."

The report's findings were raised twice this week in the House of Commons by the Liberals, who questioned the Conservatives about their involvement the advertising campaign.

The Conservatives denied any part in the radio ads. "I have never heard of the Friends of Science, and I have never heard of Barry Cooper," Environment Minister John Baird said.

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