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A billionaire’s donation, a government’s dilemma Add to ...

In theory, it shouldn’t take long for Alberta’s Chief Electoral Officer to get to the bottom of the unfolding controversy involving billionaire Daryl Katz and a massive donation he’s alleged to have made to the governing Progressive Conservative Party during last spring’s general election.

But, of course, it’s never that simple, especially when there are high-profile reputations at risk and when you’re talking about an investigation that could draw back the curtains on the often “nudge nudge, wink wink” world of campaign financing.

In other words, it could be some time before the public learns anything of what Brian Fjeldheim uncovers.

At issue is a substantial donation that Mr. Katz is said to have made to the Tories in the homestretch of the election. Last week, Globe and Mail reporters Dawn Walton and David Ebner revealed that Mr. Katz had contributed $430,000 to the Conservatives’ campaign, according to a campaign source.

It’s purported that the drugstore magnate wrote a single cheque for the entire amount, which was then divided up after the fact for receipt purposes. The province limits individual donations to $30,000. Records recently released by Elections Alberta disclosed a total of $300,000 in contributions from people with obvious associations with Mr. Katz, including his wife, mother and father, as well as a number of executives in positions with companies he owns.

An additional $130,000 in contributions is alleged to have been made by others whose connections with Mr. Katz are less obvious.

It’s the Chief Electoral Officer’s job to determine whether those contributions were legitimate – in other words, that the money was withdrawn from bank accounts or funding sources the donors controlled or had access to and that cheques were written by them or by someone with signing authority on their behalf.

The suggestion is that this isn’t what happened. Instead, it’s inferred that the party received a cheque from Mr. Katz for $430,000 and then organized for receipts to be issued to members of his family and business empire to get around laws governing campaign financing.

Section 34 of Alberta’s Election Finances and Contributions Disclosure Act says parties can’t “solicit or knowingly accept any contribution” that doesn’t actually come from the donors themselves. If that’s not what occurred here, it’s a matter that’s potentially indictable – or so Alberta’s opposition parties insist.

Beyond the legal and ethical ramifications, the alleged bestowment creates optics that are equally concerning.

Mr. Katz is trying to get a new arena built in Edmonton and is looking for $100-million in government aid. That doesn’t look good. Put up against a donation a quarter of the amount Mr. Katz is said to have made, it doesn’t look good. In fact, it doesn’t look good period for a political party to receive a donation of an exceptionally large amount from any one individual because of the potential for conflict it represents, not to mention, in this case, the laws it might contravene. (The irony is, there’s no hope now that Mr. Katz will get any kind of help from the provincial government, either direct or indirect, because of the alarms it would set off.)

Anything the government does now that’s perceived to benefit Mr. Katz becomes suspect. For instance, it recently raised the fees that pharmacists can charge for giving an injection to $20 from $10.93. The change was made two months after the election, although the government says it was contemplated much earlier. The opposition parties are charging the move will financially benefit Mr. Katz’s drugstore business. Even if the suggestion is tenuous, the donation, if true, creates a slippery slope of untold dilemmas and unintended consequence for the government.

The Conservatives say they’ll co-operate with the Chief Electoral Officer’s investigation. Of course, the party could have spared itself a lot of outrage and political damage by producing cheques, deposit slips and other evidence that would undermine the charges being levelled against it.

For that matter, Mr. Katz could have gathered his family and business associates and done the same thing. Instead, those who have the most to say about what happened have remained silent.

Until this matter is cleared up, Mr. Katz should step down from the board of the Alberta Investment Management Corp., a Crown authority that manages billions in provincial funds, investments and endowments, as the Wildrose Party has demanded. In fact, the government should insist on this as a matter of course.

Alberta’s Conservatives aren’t new to controversy. But this one has implications that are far-reaching. “If this is true,” says Wildrose Leader Danielle Smith, “it is an ethical scandal of enormous proportions.”

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