MPs raised election agency's suspicions

CAMPBELL CLARK From Wednesday's Globe and Mail September 12, 2007

OTTAWA — Elections Canada came across an alleged scheme to funnel money for the Conservatives national campaign through local candidates when two of the party's own people revealed the money was just an "in-and-out" transaction to pay for national advertising, according to court documents.The election agency has refused to authorize government refunds for ad spending claimed by candidates who took part in a scheme that saw $1.2-million go from the Conservative Party to 67 local candidates, and then immediately back to the party.

The difference between local and national expenses is crucial, because if the money was really spent on the national campaign, it would mean the Conservatives exceeded the spending limit for the campaign, violating federal elections law.Conservative MPs used procedural tactics yesterday to delay until at least tomorrow an opposition effort to launch a probe of the affair in a Commons committee.But a case in Federal Court is revealing some details, including Elections Canada logs of telephone conversations that show the agency was alerted by the protests of two Tories - one a candidate in Quebec, another the official agent for British Columbia MP Dick Harris.

When Elections Canada auditors asked Mr. Harris's official agent, Ken Brownridge, to send documents proving the local campaign spent the ad money they claimed for advertising, he complained."He repeated three to four times that this was purely an in-and-out, that the campaign did not pay for it as it was national advertising. He understood that all ridings were invoiced for it," a log of telephone calls kept by Elections Canada records Mr. Brownridge as saying on Jan. 16 of this year.Mr. Brownridge, still piqued by the lengthy audit, confirmed the essence of the conversation yesterday, and said the money was transferred from the party and back to pay for the riding's share of a national campaign. "None of them were specific ads mentioning Dick, it was just Conservative advertising," he said.

Jean Landry, the 2006 Conservative candidate in the Quebec riding of Richmond-Arthabaska, had also been frustrated in December, 2006, when Elections Canada asked for the same type of proof. "He said that this was purely an 'in-and-out' transaction (he mentioned it twice)," the call log states. "He said he has no clue about the advertising itself or how many times they appeared. He said, 'I'm 178 kilometres away from Montreal, how would I know when they took place?' "Last week, Mr. Landry said he is willing to testify against the Conservatives, and wants nothing more to do with the party. He said yesterday that the advertising was for the national campaign, not for him.

According to a June 4 letter that a lawyer representing Elections Canada, Barbara MacIsaac, sent to Conservative Party lawyer Paul Lepsoe, it was the comments of the two Tories that raised the suspicions of the elections agency.Opposition MPs said it appears the Tories transferred money in and out of local campaigns not just to generate federal refunds, but to hide national expenses that exceed the limit.