Monday, March 5, 2007

clearing campaign debts, tough under new rules

Grit leadership candidates find it difficult to clear campaign debts under tight, new financing rules
The Hill Times, March 5th, 2007 Abbas Rana

All leadership contenders are required to file complete accounting reports by the beginning of June.

Former federal Liberal leadership candidates will have to find new donors to help them pay off their cumulative, total and estimated $3-million in debts since any donor who donated $1,100 or more before Dec. 31, 2006, cannot give any more.

"The contribution limit to a leadership contestant is event-based or contest-based rather than on a calendar year basis. So, if a person made a contribution of $1,100 or more prior to Dec. 31, 2006, to a leadership contestant, that person may not make any additional contributions in 2007. Someone who contributed less than $1,100 in '06 can make further contributions up to the maximum $1,100," said Elections Canada spokesperson John Enright.

Up until the end of last year, individuals were allowed to donate a maximum of $5,400 to a leadership candidate, but according to the new donation limits that came into force on Jan. 1, the donation limit has been reduced to $1,100.

In a leadership contest of any party, the most likely donors to a leadership contestant give money to their favourite candidate during the course of the election campaign. After the conclusion of the leadership contest, it's usually an uphill battle for the unsuccessful leadership contestants to raise funds and retire their debts.

In the last Liberal leadership contest, the 11 former Liberal leadership candidates took out loans totaling $2,981,750 in the eight-month long leadership campaign. Of the 11 initial candidates, three withdrew their names prior to the convention.

All leadership contenders are required to file complete accounting reports of their campaigns six months after the conclusion of the leadership convention, or by the beginning of June.

During the leadership campaign last year, all the candidates were required to file a total of five financial statement reports, and according to these statements sent to Elections Canada, Bob Rae took out loans worth $845,000; Mr. Dion borrowed $655,000; Liberal MP Ken Dryden (York Centre, Ont.) borrowed $300,000, Gerard Kennedy borrowed $201,750; Liberal MPs Maurizio Bevilacqua (Vaughan, Ont.) and Scott Brison (Kings-Hants, N.S.) borrowed $200,000, each; Liberal MP Joe Volpe (Eglinton-Lawrence, Ont.) borrowed $180,000; Liberal MP Michael Ignatieff (Etobicoke-Lakeshore, Ont.) borrowed $170,000; Toronto lawyer Martha Hall Findlay borrowed $130,000; Liberal MP Hedy Fry (Vancouver Centre, B.C.) borrowed $65,000 and Liberal MP Carolyn Bennett (St. Paul's, Ont.) borrowed $35,000.

Mr. Dryden in an interview told The Hill Times that he has not raised any money to pay off his debts since the end of the leadership campaign on Dec. 2 as he said his first priority is to get re-elected.

Mr. Dryden said since the conclusion of the leadership contest, he's been trying to focus on the next federal election which could happen as soon as this spring.

He conceded that with the new fundraising regulations both in the political financing regulations in 2004 and under the Federal Accountability Act, it has become difficult to raise funds for any political campaign. Further complicating matters is that federal elections are now happening after almost every 18 months.

"There's an ongoing challenge of raising money. We have an election to think about and so that's where my focus is, that's where everyone else's focus is. If it had been a preoccupation [to pay off the leadership debts], I'm sure it would've been difficult to raise money but I haven't even been giving it a second thought," said Mr. Dryden last week on the Hill.

"Raising money is hard for everybody. The difficult task now is that the funding regulations have changed. They're a lot more restrictive than they used to be and we're having elections not every four years, but every 18 months, whereas before, riding associations could basically count on having four years to raise the money that they needed for an election campaign. Now they don't. It's harder to raise money and that same money you have to raise faster so the combination of the two is tough."

Mr. Brison told The Hill Times that his campaign has raised $50,000 since the end of the last campaign. He said prohibiting donors who donated $1,100 or more last year from making any more donations is disappointing and makes it difficult to raise funds.

"It does make it difficult because the people who already supported you or people who are most likely to help again, I think they put in place a set of very onerous conditions and people, regardless of whether they have given before, ought to be able to contribute to a certain maximum [again]."

For his part, NDP MP Pat Martin (Winnipeg Centre, Man.) told The Hill Times that he suspects it would be very difficult for Liberal leadership contestants to find new donors to pay for their debts.

"Paying it [loans] back is not as simple as going back to the same well again, nor is it as simple as finding some sweetheart or some angel, as they call it in the business community, to just clear the loan. No one person can pay off the loan. Businesses aren't allowed to contribute anything and if you've already contributed [$1,100 or more] to that event last year, you can't pay again this year because it's the same event. They're going to find themselves in an untenable situation," said Mr. Martin.

In December, Mr. Dion pledged to raise funds to help out unsuccessful Liberal leadership candidates pay off their debts.

Tait Simpson, a spokesman for the Liberal Party, said that the fundraising campaign is ongoing but declined to say how much money has been raised.

He, however, added that the Liberal Party has asked for advice from Elections Canada about whether it would be legal for the party to return the $50,000 deposit that the leadership contestants gave to the party headquarters.

"The process is ongoing. Mr. Dion has held a number of events and there are more to come. We are also working with Elections Canada to look at the issue of the deposits that the candidates paid to the party and that's certainly something we're looking at returning to the candidates. Mr. Dion is very much committed to helping his colleagues to retire the debt and his own debt."