In my last post on Liberal Party fundraising, I noticed that the Liberal Party had taken over $67,000 in transfers from individual riding associations in the second quarter of 2008, compared to something in the neighbourhood of $9000 in the first quarter.

One riding in particular, Pierrefonds-Dollard, transferred a whopping $30,000.  It's likely that's the lion's share of the money in the riding association bank account.

But when you think about it, this isn't all that much.  I mean, it's huge for the riding associations, but for the party itself, sixty grand is walking around money.  The party needs millions to keep going.

And it got millions...from banks:

The party's financial statements show an organization that is still solvent but one in which expenses outpaced revenues by $1.6-million last year.

The financial statements also show a $2-million loan with an extremely punishing 9% interest rate, collateralized against the assets not only of the party but of a number of riding associations. This is highly unusual and indicates a degree of financial stress long suspected but never admitted by the party.

Never admitted...but spotted hidden in the quarterly returns?

So it is possible that each of these riding associations, but in particular Pierrefonds-Dollard, Lac Saint-Louis, Mont-Royal, Notre-Dame-de-Grace--Lachine, Saint-Leonard--Saint-Michel, and Saint-Laurent-Cartierville (which together coughed up $55,000 and transferred that cash to the Liberal Party, $30,000 just from Pierrefonds-Dollard alone) are backing this loan with money that would have been used to run a campaign.

If the Liberals default on the loan, that $55,000 is gone.  It there is an election, that money can't be used to fight it.  It's all in a bank account as a guarantee of payment.

Perhaps only the safest seats were selected for this operation.  These are seats that the Liberals hope will stay Liberal even if a bare bones campaign is waged.

The Liberals don't mention any of this in their fundraising emails:

Please give what you can.  Every dollar you donate allows the Liberal Party to go $40 deeper into debt to a bank, which is our plan for success!  We won't be using your money to fight to elect a Liberal in this riding.  We're assuming you'd vote Liberal no matter what we do during an election...even if we don't do anything at all.

None of this is illegal, but I can see why the Liberals wouldn't brag about it, and why the Liberal supporters in Pierrefonds-Dollard are being kept in the dark.

Of course, what doesn't show up in the quarterly return is what other collateral, if any, was used to secure those loans.  Mortgages on properties, vehicles, office furniture...