Friday, September 07, 2007

The Cons want you to pay $500,000 for their phony ads

While it has certainly gotten John Ivison's panties in a knot, the as-yet-unnamed Conservative ad scandal has yet to get the attention it deserves. The Liberals held a press conference Wednesday that did a very good job of laying-out many of the issues, as reported ably by Jason. In a case of bad timing though, media coverage of the presser was overshadowed by two prominent Conservatives acting like total buffoons.

This is a hard story to wrap your heads around, which I think is why it has been slow to pick-up steam. But I think there’s an important angle here that’s being somewhat overlooked, both in the opposition and in the media coverage, and that’s around the refunding of taxpayer dollars.

In essence, the problem the Cons had was they were tapped-out on their national spending cap on advertising. But they still had lots of cash to burn in the national coffers, and a tight election to win. What to do? Well, many local campaigns had lots of room under their spending caps still. So, they said, why not transfer money from the national campaign to the local campaign, order more advertising and have it billed to the local campaigns, who pay for it with the money we just transferred to them? Then it counts against their spending limit instead of ours, and they still have space to burn. Presto-bango, problem solved.

Of course these weren’t local ads, they were the exact same ads that the national campaign ran. The Cons just added teeny-tiny, unreadable fine print saying the ad was authorized by the official agent for the candidate in riding X. The Cons say that makes the ad local, and therefore kosher. But even if you accepted that, and I don’t, that argument doesn’t hold water when you don’t run the ad paid for candidate X in riding X, but run it in riding Y instead, as the Cons did.

So, it becomes readily apparent what this was all about: a scheme to let the Cons spend more money on advertising then they were allowed by funneling money from the national campaign to the local campaign to buy advertising to run in other ridings.

Certainly seems like a no-no, and it seems Elections Canada agrees. A bit complicated though, so its hard to get too outraged yet though unless you’re a political nerd. Which I am, but here’s what would upset me anyway.

A perhaps not so unintended consequence of the Conservative scheme is potentially hundreds of thousands of taxpayer dollars, if not much more, being funneled to local Conservative campaigns to fight the next election, money they’re really not entitled too.

That’s because the campaign expenses of every local election candidate, as long as they receive a certain 15 per cent of the votes, are 50 per cent refundable by Elections Canada, ie. the taxpayers of Canada. This money usually goes back to the riding association to seed the next local campaign, though IIRC it’s at the discretion of the candidate.

The news coverage says at least $1 million in advertising is in question here, so at a 50 per cent refund that means at least $500,000 in taxpayer dollars going to local Conservative ridings because they funneled these expenses through the local campaigns. Pretty nice cut just for being a money conduit, no?

By transferring thousands of dollars to local campaigns to pay for national ads, and by putting those ad expenses on the local campaign’s books, the Cons weren’t only circumventing national spending limits. They were also artificially increasing the local campaign’s expenditures with non-legitimate expenses, which serves to increase by thousands of dollars the amount of the refund the local campaign then can claim from Elections Canada, and the public purse.

That’s what’s at the heart of the legal case here. The local Conservative official agents tried to claim these ad buys as local expenses entitled for reimbursement and asked for a cheque from the taxpayers, but Elections Canada said no, these aren’t legitimate local expenses, so we’re disallowing the claim and not reimbursing you taxpayer dollars for them. In response, the Cons are taking Elections Canada to court to overturn that ruling, and claim the public money they’re not entitled too.

I think that’s a more important issue then national spending limits, although the free speech argument they’re making is totally bogus. But the fact the Cons are trying to claim taxpayer dollars for national expenses masquerading as local expenses is a disgusting display of entitlement and arrogance, and in my view is the real scandal here.

It’s like they want to have their cake (circumvent spending limits) and eat it too (artificially inflate their taxpayer refunds), and so they're fighting in court to get their hands on $500,000 from the taxpayers. This one is not over yet.

UPDATE: As Mark points out in the comments, my data on the Elections Canada refund program was out of date. The actual formula is a 60 per cent refund if at least 10 per cent of the vote is achieved. That puts the Cons' ill gotten refund figure at $600,000 or, if you use the $1.2 million advertising figure that has also been reported, as much as $720,000.

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Mark T. said...

You've got old information... Now, candidates that break 10% support get back 60% of their expenses. So that $1M (which I last heard was $1.2M) will get a refund of $600K (or $720K).

Regardless of whether its a half million or three quarters, it still sucks. As Plato said over 2000 years ago (and still applies):

"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws. "

ktr said...

this will get lots of play in the fall i suspect when the house finally sits. you will see demands for donnison to resign certainly, as well as any MP involved including Day and Hill and many more.
I dont think there will be a fall election, and there will be time for all this to come out. And with the opposition having a combined majority, they will order an RCMP enquiry into break election finance laws and donnison will likely take the hit along with a few others.

A BCer in Toronto said...

Mark, you're right, I thought it was 10/60 but when I searched for confirmation I must have hit an old page on the Elections Canada site. Took another look and found an updated page, thanks. So it is a few 100k more. You know what they say, a few dollars here, a few dollars there...