Angry in the Great White North

As you know from an earlier posting, incoming Liberal Party president Alfred Apps encouraged wealthy Liberal supporters to donate $2,200 to the Liberal Party. 

How, given the law restricts donations to $1,100 per year?

Simple.  Make a separate donation to Michael Ignatieff's leadership fund.  Technically, he is not the the leader of the Liberal Party, just interim leader.  But there are no other contenders, and there will be no planned vote at the May convention, just an acclamation.

Alfred Apps admits in his email that the leadership campaign fund is already in surplus.  He makes no suggestion that this will change.  He simply states that any surplus, including one that grows if all these donors contribute the maximum $1,100 to the fund, will be transferred to the Liberal Party when this non-campaign is over:

Each donor/purchaser can donate up to $2,200, paying up to $1,100 by cheque or credit card to the Liberal Party of Canada and $1,100 to the "Liberal Party of Canada (Michael Ignatieff)".  The Ignatieff Campaign account is in surplus and any surplus automatically reverts to LPC under the Elections Act. 

The emphasis was in Alfred Apps' original email.

Today, the media has been all over the story.  In print, on radio, and on TV, Liberals are being asked why we should not interpret this as a cynical attempt to use a bogus leadership campaign as a means of doubling up people's donation limits.

From blogs to the media, and now to Parliament and beyond.  Conservative MP Pierre Poilievre has just tabled this letter in the House of Commons:

March 25, 2009

Commissioner of Canada Elections
c/o Elections Canada
257 Slater Street
Ottawa, Ontario
K1A 0M6

Dear Commissioner,

Today's Ottawa Citizen is reporting that Michael Ignatieff's Liberal leadership campaign is inviting supporters to "double their donations to the party by contributing to Ignatieff's leadership campaign at a fundraising dinner next week." The article indicates that donors are being encouraged to circumvent the $1,100 annual donation limit to the Liberal party.

The law is designed to prevent donations over $1,100 to any political party, not to allow powerful insiders to flow an extra donation through a leadership campaign to the party.

These reports raise serious concerns and if accurate, could constitute a violation of the Elections Act. I expect you to make the proper inquiries to ensure compliance with the Elections Act.

Sincerely,

Pierre Poilievre, MP

Nepean Carleton

It'll be interesting to see what happens.  The Liberals could argue that they are in the right on this, on a technicality.  But the optics are lousy, and already we've seen the Liberals backpedalling, so it looks like they lack the stomach to go in front of the Canadian people and argue that Michael Ignatieff needs more money to win the Liberal leadership.

Or they can make a dramatic move to put out this fire by shutting down the leadership fund, even if only until the convention, and then only raise funds to cover costs once they are known and publicized.  The risk is that there are no significant debts, reminding people of this attempt to slip in some extra money.  At any rate, Liberal donors can put up the cash should there be debts, and the Liberals will be careful to raise only what they need.

Of course, in that case, some donors might be less generous, given that the money won't be flipped over to the party.  I also understand that there are many ruffled feathers in this close-knit community over the revelations of the last two days.

In either case, the Commissioner has to make a decision.  He can play the technicality card, and leave the Liberals alone, exposing himself to further catcalls from Conservatives alleging favouritism.  It can become a catalyst for Conservative supporters to become re-energized.  Or he could investigate further, and check on the alleged surplus, the one that Alfred Apps said exists, but that Michael Ignatieff's people have today publicly said does not.

And if he's not too busy, maybe the Commissioner could issue guidelines on leadership campaign funds and their use when there is no actual leadership race being funded.

The $90,000 Question: Can Michael Ignatieff be incurring a large debt?  Possibly.  There is a $90,000 deposit required by the party for any candidates.  It is not clear if Michael Ignatieff has already paid it; it is due by the time of the vote.  But there is the rebate question.  For every 1,000 Victory Fund donors signed up, the candidate gets a $25,000 rebate.  It is conceivable that Michael Ignatieff won't even have to pay the deposit if he is responsible for signing up enough donors.  But there's the quandary.  If Michael Ignatieff signs up a lot of donors and erases his deposit owing, then why all this chicanery over donations?  On the other hand, if there is a $90,000 deposit owing, then Michael Ignatieff really did need to raise funds, but then why was he so bad at signing up donors?

The 10% Question: Remember, too, that the rules for this leadership campaign included a 10% off-the-top take by the Liberal Party from all leadership funds.  If I incurred $100,000 in leadership fund debts, I would have to raise $111,111 so that after the 10% is taken by the Liberal Party, I would have $100,000 left to pay off the debt.  If Michael Ignatieff incurs no significant debt by running unopposed, and this embarrassing episode compels him to stop raising leadership funds, then the kitty will be empty, and the Liberal Party will get nothing but pocket change when it comes for the 10% slice.  So it would good to incur some debts, but they'll have to look legitimate, and not just padding. (And then there is the temptation to avoid getting the Victory Fund rebate -- see above.)

Check out other stories from the Liberal Leadership Fund Donations archive.