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Conservative MP Paul Calandra stands during question period in the House of Commons on Parliament Hill in Ottawa, Ontario on Friday, October 21, 2011.Sean Kilpatrick/The Canadian Press

The Prime Minister's Office is defending a Conservative MP who raised thousands of dollars at a private fundraiser that had deep connections to a company registered to lobby the federal government.

This stand is despite the fact that PMO's own rules warn against even the "appearance" of conflict of interest and that the MP only decided to return some of the money after it was about to become public.

The Globe and Mail reported Wednesday that Conservative MP Paul Calandra, who is the parliamentary secretary to Canadian Heritage Minister James Moore, attended an event that raised about $22,000 in the basement of a suburban home in his riding on April 10.

The small fundraiser for Mr. Calandra's Conservative riding association was largely attended by the family, friends and business partners of Prabha Selvadurai, the president of WorldBand Media Inc.. Mr. Selvadurai's company is one of nearly two dozen that are competing before the federal broadcast regulator to win a coveted new radio spot on Toronto's FM dial at 88.1.

At the time of the fundraiser, WorldBand Media had hired Hill and Knowlton to lobby Canadian Heritage, the Canadian Radio-television and Telecommunications Commission and members of Parliament on its behalf. The fundraiser was held in the home of Mr. Selvadurai's sister, who is pledging to invest in the new station should WorldBand Media win the competition.

The NDP argues Mr. Calandra's actions – which also include accepting a donation at another basement fundraiser from the head of another company competing to win the radio station – violate the Prime Minister's own rules.

A report called "Accountable Government" on the PMO website specifically warns parliamentary secretaries to avoid conflicts when it comes to connections between fundraisers and lobbyists.

"Ministers, ministers of state and parliamentary secretaries must avoid conflict of interest, the appearance of conflict of interest and situations that have the potential to involve conflicts of interests," states a section of the report on "fundraising and dealing with lobbyists."

But Julie Vaux, a spokesperson for Prime Minister Stephen Harper, sided with Mr. Calandra's claim that the CRTC bid was not discussed at the fundraiser.

"The CRTC regulatory process is completely independent; politicians are not involved in any way," Ms. Vaux wrote in an e-mail. "Mr. Calandra has said very clearly that he has not been approached by any of these donors regarding this commercial application."

After initially stating that no donations were received from Mr. Selvadurai's business associates, Mr. Calandra later confirmed that at least $5,000 came from people pledging to invest in Mr. Selvadurai's proposed station. The Conservative MP said he plans to return those funds, as well as a donation from Stan Antony, who heads a competing bid for 88.1 FM before the CRTC.

Toronto NDP MP Andrew Cash argues the very fact that Mr. Calandra is promising to return at least $5,000 shows there is a problem.

"You can't claim that you did nothing wrong and then give the money back. You give the money back if you've done something wrong," he said.

Mr. Calandra argues it's normal practice for his riding association to wait until the end of the year before determining if any donations should be returned, but they sped up this process in response to questions from The Globe.

Mr. Cash said he sees a pattern developing, noting that former Canadian Heritage minister Bev Oda vowed to return money raised via a cancelled fundraiser after it was disclosed that it was being organized by a lobbyist. Then, this year, as International Co-operation Minister, Ms. Oda reimbursed the government after media reports revealed she had billed taxpayers for a pricier London hotel room and a $16 orange juice.

"This is sort of like the new accountability standard of the Conservatives," Mr. Cash said. "Everything's okay until you get caught. And then you've got to give the money back."

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