Sunday, March 09, 2008

The fees should have been returned to the grassroots, not Bob Rae

At a time when the Liberal Party is struggling to raise money and put the resources in place to fight the next election, I can think of better things the party can do with its scarace financial resources than handing $550,000 over to the 11 former leadership candidates.

That's exactly what's happening though. Each of the candidates paid a $50,000 entry fee to enter the 2006 leadership race. It was intended to help cover the costs of the leadership convention, pay for the debates the party held and hey, getting a little cash in the coffers wouldn't be a bad idea either.

Well, the party made a profit on the convention apparently, and Bob Rae began to push for a refund of the non-refundable entry fee. Elections Canada told the party they couldn't refund the entry fees, so Rae went to federal court:

... it said refunding the candidates their $50,000 fees was not illegal, because the money came from them in the first place. The Liberals' national president Marie Poulin said the party was pleased with the ruling and would soon be returning $50,000 to all 11 former candidates.

So now that's $550,000 going from not exactly bulging party coffers to bail-out former leadership candidates that apparently failed to properly budget their leadership campaigns, spent too much, and are in trouble. Money we now don't have to organize for the next election, whenever that may be.

This money should never have been returned to the candidates, and Bob Rae was wrong to fight for it to be. It was never meant to be refundable. This was an entry-fee to cover expenses incurred by the party to run the race. It was the cost of entry, of doing business. They knew it was non-refundable.

If they're having trouble paying off their debts they should have budgeted better and not spent so much, not come complaining after the fact to an already cash-strapped party asking for a bail-out. It's not like the party hasn't been helping with the debts, including lines on all mail solicitations to donate to leadership debts and holding fundraisers with the leader to benefit all the former leadership contenders. Too many of our scarace donations and too much of our fundraising activity has already been diverted to leadership debt retirement.

And now another $550,000 is gone. No wonder we're apparently “not ready” to fight an election. Enough is enough already.

Why did the convention make a healthy profit? Because more delegates attended than was expected. If any profit is going to be returned, here's an idea, return it to the delegates! Convention fees were very high, apparently too high with the profit they made.

I'd rather the party use the money to fight the next election myself, but if they did want to refund the surplus I think it should go to the grassroots delegates, not Bob Rae and leadership candidates crying for a bail-out.

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Anonymous said...

I agree.

RuralSandi said...

With Bob Rae is all about Bob Rae - he knew the rules. If he didn't like them, perhaps he shouldn't have run.

Maybe it's a way for the party to help the candidates meet their debt deadline.

Altavistagoogle said...

Bowrowing money during leadership campaigns is an unfortunate loophole that should be pluged.

MarkCh said...

If the money didn't go to the campaigns then 18 months after the convention, ie in June this year, all of the big campaigns would have been in violation of election finance law. Imagine the fun the Conservatives could have with that.

MississaugaJoan said...

You have seen nothing yet. Wait until the start of June by which time all debts/loans MUST BY LAW be paid off. We are talking $100Ks of debts/loans. It's not gonna be pretty.

The Pontificator said...


I think you're a tad off-base on this one - stating a few things as facts, when they are really suppositions and assumptions.

Firstly, post convention, it is the Party that offered to rebate the "entry fee" to candidates because they made exceedingly more profit than they anticipated - not suprisingly all candidates were agreeable to this. No one candidate "pushed" for it more than any other. As you say, it is Elections Canada who said they didn't believe that possible, and so one of the candidates, with the full support of the Party exec and the other candidates took EC to court, as much on principle as for any other reason - that is how laws and regulations get interpreted and adapted, frankly. The Party also knew that they would be in constant competition with the candidates to raise funds, and returning the deposit would shorten the competitive period.

Secondly, the entry fees did not by any stretch of the imagination come from the delegates - unless they were donors to a, or several, leadership campaigns. You wouldn't argue that the candidates didn't have a right to fund their own campaigns would you? All candidates helped to raise funds for delegates as well as for their own campaigns. The Party encouraged them to do so. Many of those candidates in effect forwent donations they could have received themselves by asking those donors to donate to delegates instead - cause if the delegates don't actually get there, well what's the point?

Thirdly, the law says that any surplus from a leadership campaign must go back to the Party or a riding association anyway, so if any of the candidates end up with that surplus (and it would appear that at least two - Mr. Rae and Ms Bennett - will be in that position before the contest formally closes), the "Party" will be the beneficiary anyway, not the candidate(s).

Fourthly, on budgeting and money management - this was a very lengthy campaign and as a result expensive all-round - one where the rules - the law actually was changed mid stream. So, any candidate originally budgeting to be able to seek up to a maximum of $5400 from donors over the 30 month period, had the rug pulled out from under them, when the Tories effectively changed that to one-fifth the amount in the same 30 month wasn't the candidate's budgeting (which should always be about both revenues AND expenses), but Tory manipulation of rules in mid-stream that caused much of the difficulty. As well, the candidates paid significant funds out of what they raised to various entities of the Party throughout the entire contest. Candidates paid riding associations to attend fundraisers, locally held all-candidiates' debates, AGM's, regional policy sessions and more and the Party to attend the national debates. A significant portion of funds raised to campaign actually found its way into party coffers somewhere.

And, as for commenters about the loans - how do you think any candidate was able to cough up the $50k deposit in the first place? Without approval of the Party which included the fee, a candidate could not register with Elections Canada. Without being registered, the candidate could not raise funds; so in order for any candidate to enter the race, they had to take a loan right from the start in order to enter the race and begin to raise money (in addition, the Party ensured that all funds raised by candidates had to be contributions to the Party and for that (a good decision) the candidates were charged administrative fees as well).

And finally, and of course we can (and I am sure you will) debate it, to say that "Too many of our scarace donations and too much of our fundraising activity has already been diverted to leadership debt retirement.", is a bit misleading. LPC says that only around 5% of Party members are also donors to the Party - that number rose to around 7% during the leadership. Most of the candidates raised their larger donations from individuals who either were not regular party donors (so they have helped the party improve its donor database) or who were previously able to contribute larger amounts of money to several baskets. They can now contribute less to each basket by law, but still have the ability to fund all levels of the Party because of the lower limits.

It's AOK to have and to retain the opinion you have on this matter, you're entitled to it given the knowledge base you have. It just seems somewhat facile.

A BCer in Toronto said...


The party may have made that offer, but while it may be supposition or assumption on my party I'd be surprised if it wasn't at the behest of leadership camp/s. I don't know if all camps were pushing for it, theu may well have been, I just know who filed the court case and has been talking publicly about this.

I didn't say the fees came from the delegates. I said the delagate fees for the convention came from the delegates, and since this refund is supposedly coming from/because of the convention surplus, I'd rather see any surplus returned to the delegates than used to refund candidate entry fees.

As for the party's fundraising efforts being diverted yes, it is. Howabout all these big fundraising dinners to pay off leadership debts the party organized? Every one of those dollars could have gone to the party warchest instead. And other events. People only have some many dates free to headline these events. And as for donation limits yes, there's are separate limits for the party and the leadership debts. But how many people max both? Very few. Most might have, say, $1000 budget for donations, and they need to decide where it goes between leadership, party, riding etc.

Anyway, facile? I don't think so. Like you said, I'm entitled to my view, and so are you. Mine is that there are better uses for this $550,000 then bailing-out candidates. The party shouldn't have offered if they did, and the candidates shouldn't have asked or accepted. This is half a million dollars out of Liberal coffers we don't have now to fight Harper.