Thursday, September 13, 2007

Why Janke is, once again, completely wrong

We've already seen that the Conservative Party leadership doesn't understand how to read election laws. Even the ones they wrote. Heck, they’ve already been caught violating election law at least once now. So it's no surprise that Conservative bloggers can’t understand the law either. Or just care not too.

If you haven’t been paying attention, the Conservatives have been caught red-handed – again. Elections Canada, whose commissioner was put forward to Parliament for approval by Stephen Harper by the way, has called foul on an alleged Conservative scheme to violate national advertising limits and enrich Conservative riding associations with taxpayer money they’re not legally entitled too.

In essence, the Conservative campaign hit its ad spending limit, so it used uncompetitive Conservative campaigns that hadn’t hit their spending limit to launder advertising money, transferring money into the ridings and invoicing them the exact same amount for the purchase of television advertising that Elections Canada has deemed as purely national in scope. The Cons also tried to claim this spending as a local expense to increase their taxpayer refund; Elections Canada called foul and the Cons are now suing them in court.

It’s appears to be a pretty egregious and transparent attempt to circumvent election law, and funnel tax dollars into Conservative campaigns. Numerous Conservative officials at the riding level have come forward to allege this was exactly what it looks like: a laundering scheme to circumvent spending limits, with a reward of taxpayer dollars to ridings that played along. It stinks, and it’s only a matter of time before it blows-up.

So, while the Con trolls have been running around pretending there’s nothing to see here, they’ve also been trying to find some way of diverting attention from the story. Salvo one was veil gate, which is also an attempt by Harper to discredit the Elections Canada head he himself picked after chasing-out the last one, Jean-Pierre Kingsley. He can’t discredit the guy he picked as a Liberal appointee, so he’s trying to discredit him in other ways so, when the ad scandal hits bigger, Elections Canada will be viewed as less credible. It’s transparent, and it’s pathetic.

Salvo two appears to be this muddled and confused attempt at diversion from Conservative super-sleuth Steve Janke.

If I had a dollar for every time Janke did a big investigative post professing some big Liberal wrongdoing, only to have to apologize in a day or two for being completely wrong, well, I may not be rich, but I could certainly go out for a very nice lunch. Perhaps a nice steak at The Keg, with a glass of cabernet. Domestic though, not imported.

Janke (we’ll assume he’s cooked this up on his own) has been pouring over Elections Canada returns, specifically for Stephane Dion’s 2004 election campaign in St. Laurent-Cartierville, and he thinks he’s found something damming.

He points to $12,200 transferred from Dion’s riding association to his campaign, which was immediately transferred back to the association for the purchase of advertising material, other than tv/radio, and then transferred on to LPC(Q). He posts screenshots of all this to make it look fancy. Then, interestingly without claiming any rules were broken, he calls it scandalous, I guess hoping a few screenshots will some how make it so.

But let’s look at what Janke has “uncovered”. First, a transfer from the riding association to the Dion campaign of $12,200. Nothing untoward there, its common practice for the riding to transfer money to the local campaign before/at the start of the election. Inevitably this is the proceeds of fundraising activities carried-out by the party since the last election to support the next campaign. That’s what riding associations do.

Next, Janke shows the same amount is transferred back to the riding association (and on to LPC(Q)) to purchase advertising. As Janke notes, this wasn’t tv/radio advertising, but was entered in the ‘other’ column. This likely means, and indeed the figure noted bares this out, that it was to pay for the riding services package bought by all riding associations from the national party. This is for lawn signs, brochures, technical support (a voter tracking database) and the like. A purely local expense.

Why was the exact amount transferred to the campaign from the riding that was needed to pay for the riding services package? Maybe that’s all the campaign needed at the time. The riding services package is a major expense and is often incurred before the campaign has its own fundraising underway, so perhaps the campaign asked the riding to pay for that through its fundraised funds.

Janke also notes a transfer by the LPC(Q) to the riding association of $12,200 as proof of further shady happenings. What he doesn’t mention, although its partially visible in his screenshot, is a second transfer a few weeks later of $32, 549.17, for a total transfer from LPC(Q) to the riding of $44, 749.17.

Why the transfer? Well, here’s something Janke missed in his super sleuthing. On the associations January 1, 2004 statement of assets and liabilities, it lists the following:

Yes, a $44k debt owed to the riding association. So, allow me to speculate the likely scenario here, based on all the facts. Prior to the 2004 campaign the LPC(Q) owes the riding association $44k and change, likely for local fundraisers. Prior to the campaign finance reform legislation, it was practice for fundraising expenses to be cycled through the party for tax receipt purposes.

With the election campaign coming-up the LPC(Q) transfers the money the riding association is owed for its fund raising to the riding in two installments: $32k plus $12k magically equals the $44k debt repaid.

The first $12k to pay for the riding services package, which went right back to the party as that’s who its bought from, the other $32k the rest of the debt owed. Ok, there is a $5 difference for some reason. Where’s the missing $5, maybe that’s the scandal!

As for it being listed in the discount column, when an item is gifted or transfered it's considered a non-monetary transfer. It still needs to be accounted for though, and counts against the riding spending limit, so its accounted for in the discount column. Likely scenario: the riding association chose to gift the riding services package to the campaign.

This all really doesn’t matter though, as Janke is blowing smoke. As I’ve shown these are perfectly benign and legitimate transactions, and is nothing at all like the money laundering scheme that the Conservatives have admitted they orchestrated.

For example, this wasn’t to purchase national advertising and circumvent spending limits, like the Conservatives did. This was to buy lawn signs and other materials for use in the riding, a purely local expense. And, as the riding services package was listed as a non-monetary expense that means it wasn’t even claimed by the campaign as a refundable expense. And the money transferred to the association was money it was owed for its own fundraising activities, not funds to launder and pay for national advertising.

So, let’s review this scoop here, shall we? Dion’s riding association transfers fundraising proceeds to the Dion campaign, which Dion uses to buy the riding services package (local advertising materials, lawn signs) from the party. What’s the scandal here, pray tell? Elections Canada signed-off and approved these returns years ago.

On the other hand, the Conservatives orchestrated a scheme in some 70ish ridings to, and they admit this, bypass national spending caps and improperly enrich riding associations with taxpayer dollars. Elections Canada recognized this as not allowable, and the matter is now before the courts.

Apples and oranges. Despite all Janke’s charts and graphs, nothing but an attempt to blow smoke. And a failed one at that. I'm sure the apology will come any day now.

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don's hottie said...

Hey BCer, love your blog and I just started one of my own.

I have to disagree with you on this post though! (LOL)

This whole problem with what cash goes where, with whatever party is a little much for the the public (and me HAHAHA) to grasp!

I think the Liberals are stretching it a bit.

Canadians remember sponsorship scandal because it was simple. Money to friends, brown paper envelopes with my best girlfriend would say...SKETCHY MUCH?!

I think most non political people won't ever get the thing you guys are trying to attach to the Conservatives. It is just political advertisement within a party vs. wasting Canadian's money.

Whatcha think?

Scott Tribe said...

No matter how much the Conservatives try and dismiss it, or how their Blogging Tory proxies try to question the integrity of Elections Canada - if the court agrees with EC and finds the Tories guilty of what EC believes they are in violation of, that opens the can of worms wide open. (OF course, the BT'ers might try to complain about "liberal judges", but that won't fly in most of the rest of Canada.

Steve V said...

Nice job Jeff. The dodge and weave, the Conservative pastime to try and train the gaze away from their own failings. They do it EVERYTIME, it's actually getting boring, not to mention intellectually dishonest.

Dennis (Second Thots) said...

This is such nonsense. Liberals would rather be bitter about Adscam than actually confront the corruption that led to it.

Local ridings are allowed to spend on advertising. It's what the Con riding associations did. They chose to buy national advertising. Whoop tee dooo.

The accusation that Conservative officials admitted to it is utter nonsense, and misleading — to say the lease.

Janke's point is that Dion did much the same thing. And he did.

Resources are transferred back and forth. It's all accounted for.

But because in once instance it's a Liberal, and the other it's a Conservative, BCer sees it differently.

John Ivison made fun of you tinfoil hatters in his column recently, and rightfully so.

The attempt to make this an Adscam redux says much more about Liberals than it does about Conservatives.

Dion gave an interview with Mansbridge tonight. The At Issue panel discussed it.

Dion is in some danger of losing Outrement, probably in part because he has nothing better to throw at Harper than this nonsense.

Good luck with all this. lol

le politico said...

All you've done is given more traction to the point that political parties move money in and out, up and down, and side to side.

Well done, Chernia..errr..BCer. :)

A BCer in Toronto said...

Dennis, did you even read the post before posting your talking-points?

And le politico, not at all. I'd (once again) point out the clear and obvious differences, but I suspect you already know and are just choosing to overlook them so there's little point.

The Rat said...

The only "clear and obvious differences" are that Dion purchased local advertising you like and the Conservatives purchased local advertising you don't like. That's it. Define "local advertising" for me, or better yet show where in the legislation it is defined. This whole "scandal" revolves around that definition, and whose interpretation you like. Unlike money in brown paper envelopes and the non-disclosure of Liberal ridings it went to, the CPC has declared openly and on the books what they did and why.

Red Tory said...

Nice work Jeff!

A BCer in Toronto said...

You can do your own research Rat, or just continue ignoring facts, your choice. The fact is, the law says you're wrong, and so does Elections Canada. We'll let the courts settle it.

Barcs said...

It sorta appears that both Dion and the national Conservative campaign have done the same thing. (tho on a somewhat different scale)

One of the biggest complaints of the "Scandal" was about the money amounts transfered between the party and the candidate were the exact same amount.

Janke has simply pointed out that Dion is part of the same "scandal" or at the very least that there might be valid reasons for a party and a candidate to do so.

The point is: until a final ruling by Elections Canada it still remains a legal gray area. And used, apparently, by more than one party.

If it turns out to be illegal, then I am with you and the conservatives should be punished (along with others who do it on a smaller scale...hmmm) And yeah. The whole system is a bit fishy.

I have an extra aside in closing. In the early part of your post you state that Harper is attempting to undermine Elections Canada on the veil issue.

That is probably part of it. BUT I would like to point out the day: (about a week before by-elections), the place of those by-elections: (Quebec), and the recent election there in which there was a large issue: (reasonable accomodation).

Making sure people there know that a few immigrants (even after several generations they will never be Quebecois by the strictists definitions... maybe by the looser ones) are getting special favours.....but we are fighting against Elections Canada to right the problem.

Why do you think even the NDP (the party of the disadvantaged no less) are even joining the Conservatives on this one. To pander to a dozen people (most don't care) would lose them an enormous amount of votes.

It was something Cretien was famous for. Finding that problem. Rallying the troops and not actually ever doing anything.

Aren't you glad Harper learned so much from his predecessors??

Barcs said...

Here's my stupid question for today. (I come up with alot of them)

What is the penalty. I have never seen it publicized.

If you are over the donation limit, or this "Scheme", or any other type of electoral fraud.

Does it end up being just a fine? or removal of a sitting MP involved? or execution? No cookies at coffee time? maybe NO COFFEE... O_O ... yipes don't do it man, it isn't worth it.

*runs away to get more coffee*

The Rat said...

"The fact is, the law says you're wrong, and so does Elections Canada. "

Really, Jeff? Can you quote the law? I thought not. And yes, we'll let the courts decide. But once again, could you please detail what exactly it is they are going to decide? Could it be what I said, that they will be deciding on what the definition of "local" is? Boy that'll be a riveting scandal. Of course we won't have Joe Morselli, or the mob allegation towards Gagliano, or sordid tales of brown envelopes disappearing in smoky restaurants. Nope, we'll just have lawyers arguing what the definition of local is. Scandalous!

Joan Tintor said...

Sigh. It's "poring over" not "pouring over." Kids.

canuckistanian said...

"Local ridings are allowed to spend on advertising. It's what the Con riding associations did. They chose to buy national advertising. Whoop tee dooo.

uhuh...except, the law says that they "CANNOT" buy national advertising.

wow, so now the defence is that "national advertising" is "local advertising" ;-D...ya, good luck with that ya rat.

btw, you do no that no bt'er is gonna read your whole post...its long and well-researched, a clear affront to their traditional values.

burlivespipe said...

The more the Blogging Tories blabber on the more to obfuscate the facts. Dion had lawn signs and paraphenalia from the campaign package. The CONs spent money on their local campaign packages, including signs etc.
What they are trying to do is spend this incredible lucre -- which now seems to need investigation, because if they are spending it like a biker gang, no doubt they are acquiring it a little shady too -- beyond the stated limits. And then get taxpayer subsidies for it, too.
Of course, all the BTs can pull out is 'envelopes' and adscam. Funny, the convicted people in that sad saga happen to be past CON party members, but I digress....

Stephen said...

Looks like double dipping the expense credit to me...

A BCer in Toronto said...

It sorta appears that both Dion and the national Conservative campaign have done the same thing.

Not at all. Transfers are not verbotten. Janke is trying to muddy the water there. The issue is the national campaign funelling money for national ads through campaigns to bypass national spending caps, and the Cons claiming a rebate for non-local expenses. That's where the Cons run into trouble here.

The point is: until a final ruling by Elections Canada it still remains a legal gray area.

Actually, Elections Canada has made their ruling, and they ruled against the Cons, who are now challenging the ruling in court.

What is the penalty. I have never seen it publicized.

According to the Globe:

The Canada Elections Act specifically forbids any attempt to circumvent the rules against exceeding limits on campaign spending. Depending on whether an offence was voluntary or not, a party's chief agent could face a fine of up to $5,000 or a jail sentence of up to five years, or both.

Looks like double dipping the expense credit to me...

Actually no, because it was listed as a non-rebatable expense, so a rebate wasn't claimed on the riding services package, double or single.