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Canada's Ethics Commissioner Mary Dawson prepares to testify before the Commons ethics committee on Parliament Hill in Ottawa March 27, 2012.CHRIS WATTIE/Reuters

Ethics Commissioner Mary Dawson has decided not to investigate the fundraising activities of Conservative MP Paul Calandra and says Parliament needs to bring in stronger rules on the "murky" mix of lobbying and political donations.

The Globe and Mail reported last month that Mr. Calandra's Conservative riding association of Oak Ridges-Markham held two private fundraisers in suburban basements with the MP that raised thousands from individuals connected to a hotly contested bid for a new Toronto radio licence.

The licence for an open spot on the Toronto radio dial at 88.1 FM will be decided by the CRTC, an independent broadcast regulator that is funded by and reports to Canadian Heritage. Mr. Calandra is the parliamentary secretary to Canadian Heritage Minister James Moore.

Mr. Calandra said he did nothing wrong, but would give some of the money back.

The Conflict of Interest Act provision on fundraising states that "no public office holder shall personally solicit funds from any person or organization if it would place the public office holder in a conflict of interest."

Ms. Dawson told The Globe and Mail that, because the rule says "personally," she must have evidence that an MP directly asked for money. Ms. Dawson's position is that the rules allow riding association members to do the asking with an MP present.

"It went out of its way to put 'personally' in there," she said of the rules. "If you say personally, what else is it in there for?"

After previous calls from Ms. Dawson for more extensive rules, the Prime Minister's Office quietly posted detailed new ethics guidelines on fundraisers more than a year ago. Ms. Dawson said that without an official announcement, the government added an "Annex B" to its "Accountable Government" rules. The new annex warns parliamentary secretaries to avoid real and perceived conflicts when it comes to connections between fundraisers and lobbyists.

Ms. Dawson says she can't comment on whether Mr. Calandra violated the Prime Minister's rules because they are outside of her authority.

Members of Parliament are reviewing the ethics rules under the commissioner's purview. Ms. Dawson said she could speak only generally and not specifically about Mr. Calandra, adding that the rules need to be "beefed up."

"It's an awfully murky area. In some ways, it's the way our system kind of works. People make donations. And I'm sure that people that make donations often, they have an interest in the person they are contributing to," she said, adding that the rules must also protect the freedom to participate in the political process. "The whole area is quite difficult, I find. But Canadians certainly seem to know when something's distasteful to them, and whether or not it's covered by the actual rules, they get excited."

NDP MP Andrew Cash has written to Prime Minister Stephen Harper asking him to enforce his own ethics rules, which the NDP says were clearly violated in this case. Mr. Cash said on Friday he has not received a response.

Tyler Sommers, co-ordinator of the political ethics advocacy group Democracy Watch, said Ms. Dawson's decision not to investigate Mr. Calandra is the latest in a long line of cases in which the commissioner takes an excessively limited view of her own powers.

"The argument that because he wasn't asking for the money it wasn't a violation is incredibly questionable," he said, noting the donations would support his re-election campaign.

Mr. Sommers said Democracy Watch will ask the federal lobbying commissioner to investigate.

"We believe fairly strongly that this is an incredibly questionable event," he said, adding that another question is why Mr. Calandra is promising to return only about $5,000 of the roughly $24,000 raised at the two events.

"This really shows some of the loopholes that exist in the system," he said.

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