More financing weirdness
I studied the money raised by Ajax-Pickering candidates Mark Holland (Liberal) and Rene Soetens (Conservative) in the 2004 federal election.
With regards to the lack of individual donations to Mark Holland, indeed it might be that those donations were made to the riding association, then transfered to him. There might be no issue here.
But the interest-free loan of $17,000 from developer Ron Halliday to Mark Holland is something else.
Can anyone find anything that distinguishes a loan from any other kind of donation? Note that on a candidate's return to Elections Canada, there is a page for listing loans, but loans are not counted in the overall summary for some reason. If loans are different from donations, they are essentially a backdoor, and don't seem to be covered by the new financing rules.
For instance, can Belinda Stronach lend herself enough to outspend everyone?
Good question. I decided to check it out. Recall that in 2004, Belinda Stronach ran as a member of the Conservative Party of Canada against Martha Findlay of the Liberal Party. We all know the rest of the story.
So did Belinda lend herself money? Yes. In fact, both Belinda and Martha used loans to lend themselves large amounts of money, well in excess of the $5000 limit that applies to candidates when it comes to making donations to themselves.
Belinda used her good name to get an $84,000 loan from the Bank of Nova Scotia (she was the guarantor) at 5%. She added that to the $100,000 in individual donations, and $22,000 in corporate donations. When you add up all the odds and ends, that loan put her almost at a quarter of a million dollars in her war chest.
As for Martha Findlay, she had three personal loans totalling $33,500. The lender in each case: Martha Findlay!
She didn't report an interest rate, but we can guess it was a number between nothing and nada. Add that to the $67,000 she already had from donations, and she had over $100,000 to battle it out with Belinda.
The spending limit in Newmarket-Aurora was $76,613.27 in 2004.
Why did either of these candidates need with all the extra money? They wouldn't be allowed to spend it. As I considered in the previous post, maybe this is bridge money, to help with cashflow issues. But then when you look at Belinda's expense sheet, that doesn't wash.
She spent $71,141.74 on expenses "subject to the limit". That's fine, because the limit is $76,613.27. So what about all that other money? Did it go back to the Royal Bank? No. It was spent on "Commericial goods and services" under the heading "Amounts not included in election expenses". The total: $177,239.25.
Over twice the amount that is supposed to be the limit spent on a campaign. For instance, $75,000 went to Atlantis Creative Group, an expense that has already garnered the attention of the media. Stephen Harper even said that Belinda "had trouble adhering to spending rules".
Now Belinda ended up $25,996.52 in the hole, meaning that she still owed money to the Royal Bank. Now she can pay that much off just by selling off the contents of one of her shoe closets, but doesn't it seem odd that for all the rules around limiting donations from individuals and corporations, a candidate has no trouble getting into thousands of dollars of debt via loans from people who might be looking for a favour sometime down the road?
Update: Made a mistake. The loan appears in the inflows, but not in the outflows. I'm not an accountant. So when Belinda ended up $25,996,52 in the hole, it means that she accrued nearly $26,000 in bills in excess of the money she raised. But that is in addition to the $84,000 that she needs to pay back to the Royal Bank, at 5% interest. So not only must she come up with $26,000 to pay back creditors (without breaking finance or ethics rules), she must also maintain the debt repayment schedule for the Royal Bank loan. As I said, for Belinda, this might not be a problem, but for another candidate this might be an issue.
I think there is something seriously weird about these laws that are supposed to protect the integrity of the election process. Seems like if you have the personal means, the good name, or the right connections, essentially unlimited amounts of money can be moved around as long as they are called "loans", even at 0% interest. Definitely an advantage for certain candidates. At the same time, a candidate can get into some serious debt if he or she is not careful. Worse yet, the limits on donations ($5000 per individual, $1000 per corporation) means that candidate can't easily tap into his support base for money to get out from under a debt.
That can lead to even worse abuses. For example, I can't find anything at Elections Canada that requires the loan to be paid back within a specific period of time, or even at all! As far as I can tell, the day after the election, the lender can just forgive the loan.
"Forgive" might be the wrong word. Maybe the loan isn't forgiven, or forgotten. Maybe it's more accurate to say that repayment doesn't have to be monetary.
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Comments
Why is anyone surprised--the only surprising thing here is that the loans were not given in plain brown envelopes! That is what made me laugh when Martin stated that 'they would strengthen the laws' to prevent anything like adscam occuring again. There were already laws in place--or we wouldn't have been so shocked that adscam occured. This is just another example of what Liberal lawyers do best--find the loophole, change the wording, and look, 'we have nothing to hide'!
It is the people and the system that are corrupt--until we face that, nothing like the slight of hand, word game playing, should surprise anyone.
Sadly, they are not even the least embarrassed when 'caught'
Posted by: George at January 31, 2006 04:01 PM
Its a way of getting around the elections canada rules.
Its also available to everyone who runs. If you look into all the runners and all the winners you will likely see alot more of this. But so what?
Get the rules changed if you think its a problem.
Personally I don't think the rules are reasonable in the first place but thats another story.
Posted by: PGP at January 31, 2006 04:19 PM
check warrenkinsella - fun or not?
Posted by: george at January 31, 2006 05:32 PM
I don't think you can ever really monitor what is spent in a campaign. What is there to stop a candidate from taking money under the table for some item that he purchases to run his local campaign, and then not to submit a bill for it? What is there to stop any and all sorts of abuse? Nothing but their honour. There is no auditor sitting in the campaign office holding everyone accountable.
I don't think for a second that Stronach or Holland really broke any laws, but they will bend them until they are told otherwise. The rules are set up on the presumption everyone will report all their expenses, but as we all know from the underground economy, there is ways to get around things....
Posted by: Mark in Bowmanville at January 31, 2006 06:19 PM
Captain Canada Fails Even After His Failure
* Even More Captain Canada Failure *
Posted by: Chris from Victoria, BC at January 31, 2006 08:16 PM
From Warren Kinsella blog:
"January 31, 2006 - Forgive me for being blunt, but how in the name of Christ was the official spokesman for the Gomery Commission permitted to write a book about what was going on behind the scenes at the Gomery Commission?
This is the big surprise I had been planning for you - but La Presse beat me to it.
It's about Francois Perrault, the Gomery Commission's head flak, was paid hundreds of thousands of dollars for a year's work - sole-sourced, too - by the tax payer. Some of the things Perrault said about Jean Chretien now actually form part of Chretien's Federal Court case alleging bias.
Here's the gist of the La Presse story, for those of you who cannot read French:
Perrault's slender book is called ''Inside Gomery.' It's being published by Douglas and McIntyre.
The book will be released on February 21, at a party at the National Arts Centre.
Perrault himself admitted that the writing of such a book is analogous to "insider trading."
Despite that, he started to write the book in October, when the first Gomery volume had yet to be released.
Gomery knew all about it. He even wrote the preface for the book.
If you don't understand why this is an issue, you are either hopelessly partisan, or you think Gomery was right to "exonerate" Paul Martin.
This is, indeed, like "insider trading." While this multi-million dollar commission was underway - a commission that would have a huge impact, as Gomery admitted many times, on the reputations and lives of many, many people - one of the most senior commission officials was secretly writing a book about it all, with the secret approval of the judge who presided over the commission. The same judge who repeatedly promised to observe "confidentiality" in his opening statement, and who even said this:
"In the course of the Inquiry's hearing process, evidence may emerge in support of a factual finding which, broadly construed, might be perceived as adverse or unfavourable to the reputation of a person or organization. Given that possibility, it is of paramount importance that the Inquiry's process be scrupulously fair."
"Fair," eh? Here's my favourite, from Gomery's own Rules of Procedure. It's relevant to what I'm talking about here:
"48. No media scrums, interviews, or reporting will be allowed in the hearing rooms or within the distance of ten (10) meters from the hearing room entrances."
Unless, of course, you're Francois Perrault. In which case you can "report" from right inside the judge's chambers, or any other place that real journalists were not permitted to go.
This is bloody outrageous, what has happened here. And it is wholly, completely reflective of why the Gomery Commission was wrongly conceived, poorly led, and badly received.
What a disgrace."
Posted by: george at January 31, 2006 08:30 PM
IRAN TARGETS CANADA FOR JIHAD WITH SUICIDE BOMBERS AND MISSILE BORNE WMDs
http://thecanadiansentinel.blogspot.com/2006/01/important-info-on-irans-war-intentions.html
Posted by: Canadian Sentinel at January 31, 2006 08:51 PM
So when's Gomery's book coming out?
As for Belinda et al, it's just more corruption in the making, no monetary payback for the loan but you know it will cost the Canadian taxpayer big time once the candidate is elected, maybe with a few non-tendered contracts?
Posted by: Platty at January 31, 2006 08:56 PM
Too many lawyers in this game.
What....you have lawyer friends?
I don't fucking care.
They think differently from "ordinary" people.
That is precisely the problem. Not everything we do has to have a "Legal" rationale.
You don't "legally" have to coach sports, or Scouts etc. Nor donate to your favourite cause.It'd be some sad fucking world if it was eh?
But we still do these things, right? And things work out just fine.
Posted by: eastern paul at January 31, 2006 10:26 PM
george don't get your panties in a knot, gomery had no legal authority, he made recommendamations!!bwahahahah he exonerated the biggest thieves our country has ever known,bwahaaha
Posted by: kelly at February 1, 2006 01:50 AM
TreeFrog
Posted by: TreeFrog at February 27, 2006 10:58 PM
 
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