LKO explains how the “in and out” scam that the Conservative Party of Canada used last election, was bilking taxpayers by incurring refunds for ineligible election expenses.
What you CAN do: Transfer money from the national party to local candidiates so that the local candidates can spend that money on local advertising.
What you CAN’T do: Buy a national ad campaign, and then temporarily (and I mean for mere hours here in some cases) transfer money from the national party to the local candidates and RIGHT BACK AGAIN to make it SEEM as though the candidates had paid for local advertising within their local spending limits, when we all know what happened was that the national party exceeded the national spending limits and then tried (incompetently to boot) to cover their tracks.
The score so far:
Liberals: 1 Adscam
Conservatives: 1 ConAdscam
other parties: 0 scams
As usual, the Liberals and Conservatives win again. Or is that lose… no, only taxpayers lose.
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Hat tip to The Jurist
wilson | 28-Apr-08 at 7:43 am | Permalink
So you think that if the Cons had waited afew weeks to do the ‘out’ the practice would then have been legal?
(like Dion and Jennings did)
Do you also think that if the party had not maxed out their national ad limit, been closer to say 50%, the practice would then have been legal?
If in and out is illegal, it is illegal regardless of any APPEARANCES of ‘time between’ and ‘limits reached’.
Lord Kitchener's Own | 28-Apr-08 at 8:22 am | Permalink
I don’t think the TIME has anything to do with the legality, but yeah, I suppose if they’d been under the spending limit that might make a difference (though, to be fair, if they’d been under the spending limit they never would have done this… they would have just paid for the advertising at the national level… the WHOLE POINT of the scheme was to pay for this national ad-buy with national party funds, despite the fact that they’d already hit the national spending limit by making the money APPEAR to have been directed by the local candidates into the ad-buy!).
The “timing” is important only in as much as it belies the obvious falsehood that somehow this was the national party transferring funds to local candidates to pay for local adevrtising. In many cases, it appears as though local candidates got not more than quick perfunctory notice that the money was being transfered in, and right back out of their accounts. They didn’t ask for the money, they had little (or many claim NO) control over how it was spent, and in many cases the money was in and out of their accounts so fast they never would have known about it but for a quick “heads up” from party HQ (designed to stave off the uncomfortable questions like “what’s this money” and “why did you transfer it into my campaign account and then right back out again???”).
Local candidates didn’t spend the money! In many cases they barely even knew it was going to appear and then disappear from their accounts. They simply got phone calls one day from national HQ saying, effectively, “Look, some money’s gonna appear in your campaign accounts today, and then it’s gonna disappear again. Don’t worry about it. It’s all to cover “expenses”. Don’t ask questions about the nature of the advertising… no we can’t make the ads talk about issue A or issue B that’s important in your riding… no, we don’t care that the ad focuses on the Liberals even though your main opponent is from the NDP… stop asking questions… we’re just calling so you won’t touch the money, and won’t wonder what that line is on your bank statement when you get it… yes, it’s like, TOTALLY legal… now stop asking questions already, we’re trying to win an election here!”
A few Tory candidates didn’t like the smell and wanted to refuse the money. In some cases the money went in and out of their accounts anyway. The most honest of the honest then refused to apply to be reimbursed for the money by Elections Canada (i.e. you and me). Their logic was, I didn’t ask for the money to be transfered, I didn’t spend the money, therefore the money was not an “expense” of my local campaign (this is where the problems begin for the Tories, because if the money isn’t “local” (which it pretty transparently wasn’t) then it’s “national”, which puts them around a million dollars over the national spending limit).
A national party is allowed to transfer money from the national party to the local candidates. Totally kosher. However, even though that LOOKS what the Tories were doing here (which is the point!) it’s not REALLY what they were doing here. What the Tories did was spend the money at the NATIONAL LEVEL (where there’s spending limit X) but first transfered it into the candidates accounts (and then IMMEDIATELY back out again) to make it SEEM as though the money had been spent by the candidates at the local level (which has spending limit Y). The reason that they did this was because they had already hit spending limit X, but wanted to keep spending their national money. Had the candidates taken the money and spent it on advertising, that would have been OK too. But that’s not what happened. It’s only what the Tories made it APPEAR to have happened. Which, again, is the whole point.
The Tories “defence” such as it is, is that the candidates are allowed to use the money to buy any type of advertising they like, and that making a distinction between “local” advertising and “national” advertising is a distinction of “content” and that it’s not Elections Canada’s role to regulate the “content” of political advertising. The problem with this, as stated, is that the local candidates had NOTHING WHATSOEVER TO DO WITH THE MONEY, OR THE ADS. They didn’t pick the ads. They never saw the ads (until they aired). They had no say on the content of the ads. They weren’t invoiced for the ads. In some cases they never even heard the name of the advertising company the ads came from until after the election. Al most candidates were told was “Money’s gonna appear in your campaign account and then disappear again. Don’t worry about it”.
I tend to agree that local candidates should be able to spend money as they see fit. That’s not what happened here. Local candidates didn’t spend the money at all. They were nothing more than a convenient place through which to route the money to make it appear to be Y, when it was really X. In most cases they were only peripherally aware that the money even passed through their accounts. It was gone before they could blink, and questions were discouraged. In another context it would be called “money laundering”.
Saskboy | 28-Apr-08 at 8:24 am | Permalink
“like Dion and Jennings did”
Link!? And who the heck is Jennings, and why would you assume me or other readers would know what straw men Blogging Tories are building in backrooms?
“Do you also think that if the party had not maxed out their national ad limit, been closer to say 50%, the practice would then have been legal?”
No point in answering that, because it wouldn’t happen, eh? But I will reply with a question: The point of the fraud/[EDIT: money laundering] was to circumvent a national spending limit. So if they hadn’t reached the limit, why circumvent it?
JimBobby | 28-Apr-08 at 9:16 am | Permalink
Jennings is the Lib MP that the Con’s have all been saying did the same thing as in and out. Except she didn’t. Jennings made her campaign finances public the other day and proved there was no truth to the accusations. I think it must have been on the CPC talking points list for bloggers and commenters. I’m not sure how they’re saying Dion did the same.
CTV.ca
The point of the fraud was not only to circumvent spending limits. It was also to funnel taxpayer money to individual CPC ridings by way of the 60% rebate for candidates who receive at least 10% of the popular vote. $700,000 was claimed. 60% of the total in-and-out money.
JB
Lord Kitchener's Own | 28-Apr-08 at 11:19 am | Permalink
As has been pointed out repeatedly, local candidates ARE allowed to use money originally transfered from the national party to buy advertising (or other things). The point is that’s NOT what the Tories actually did, they just tried to make it APPEAR as though that’s what they did.
You can’t claim that local candidates “bought” anything if they never saw the thing they were buying, never asked to buy it, were never invoiced for buying it, and in some cases FLAT OUT REFUSED TO BUY IT. What the Tories did was simply transfer national funds in and out of local campaign accounts in order to make it LOOK as though local campaigns were “buying” something from the national party with money transfered from the national party. But they never were. It was all just a trick. Which is made patently obvious by the fact that even candidates who refused the advertising had the money go in an out of their accounts, and had “invoices” submitted to Elections Canada by the national party for their “local spending”. The fact that a number of Tory candidates flat out refused to go along with the scheme, and refused to claim the money as reimbursable by Elections Canada (the aforementioned “I didn’t ask for the money to be transfered, I didn’t want the ads, I didn’t spend the money, and therefore the money was not an ‘expense’ of my local campaign”) is what’s gotten the Tories into hot water.
They tried to gussy up a violation of national spending limits as a routine movement of funds between party HQ and their candidates, and (many of) their candidates called them on the fraud.
They made their beds…