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DWatch calls on Elections Canada, Commissioner of Elections and Commissioner of Lobbying to audit political donations to find illegal funneling and unethical donation bundlers

Audits are key to effective law enforcement – if they refuse to do the audit it will show they are lapdogs who refuse to enforce the law

Wednesday, May 1, 2019

OTTAWA – Today, following yesterday’s CBC report revealing details about illegal federal party donations by SNC-Lavalin, and many other donation and fundraising scandals from across Canada in the past several years (summarized below) Democracy Watch released the letter it has sent to Canada’s Chief Electoral Officer, Commissioner of Canada Elections, and Commissioner of Lobbying requesting that they audit donations to federal political parties back to 2007.

The audit is needed to find donations illegally funneled by companies, unions or other organizations through their executives, employees and their families, and to find people connected to lobbying companies or other organizations who are fundraising for political parties.

All three watchdogs are empowered to conduct such an audit, and working together they could easily do a very complete audit. Elections Canada regularly conducts research on various issues, and the Commissioner of Canada Elections may initiate an investigation at any time (under subsection 510(1) of the Canada Elections Act), and the Commissioner of Lobbying may do a special report (under subsection 11.1(1) of the Lobbying Act) on any lobbying enforcement issue.

“There are many examples across Canada of companies funneling donations through their executives or employees or having their board members fundraise for political parties,” said Duff Conacher, Co-founder of Democracy Watch. “A full audit by the election and lobbying watchdogs is needed to determine just how much this is happening with federal political parties.”

The following situations point to a clear pattern of violations of the Canada Elections Act rules that prohibit companies, unions and other organizations from funneling donations through their executive or employees and their families, and to violations of the Lobbyists’ Code of Conduct rules that prohibit anyone connected to a company, union or other organization doing fundraising for a party or candidate:

  1. SNC-Lavalin illegally funneled almost $118,000 to the Liberal and Conservative parties, riding associations and candidates through its executives and employees from 2004 to 2011, with revealing the list of donors;
  2. Clearwater Seafoods lobbies the federal government, and board member Mickey MacDonald held a fundraising event in August 2014 that raised about $80,000 for the Liberal Party, an event Justin Trudeau attended.
  3. Apotex Inc. lobbied the federal government at the time its then-Chair Barry Sherman held a fundraising event in August 2015 that raised about $150,000 for the Liberal Party, an event Justin Trudeau also attended.
  4. Federal Liberals made an offer in 2016 to reward bundler fundraisers with access to the Prime Minister and other party leaders, and many federal Liberal fundraising events have been attended by lobbyists (and likely many more events of the other parties).

“It’s highly unlikely that SNC-Lavalin is the only company that illegally funneled donations through it executives and their families to federal political parties, or that Clearwater Seafoods and Apotex are the only companies whose board members held fundraising events that raised tens of thousands of dollars for a federal political party,” said Conacher. “Doing an audit to find violations is key to effective law enforcement in any area, and if federal election and lobbying watchdogs refuse to do this audit, it will show that they are lapdogs who refuse to enforce the rules.”

Democracy Watch’s research also shows that top federal Liberal Party donors (to the Party only, not its riding associations) who gave $1,100 or more in 2015 were only 4.37% of total donors (4,084 donors out of 93,426 donors total) but they gave the Party 22.87% of total donations raised ($4,866,373.76 out of the $21,276,897.57 total raised).

The following situations at the provincial and municipal level provide further evidence that funneling donations happens in every jurisdiction that has banned donations from companies, unions and other organizations but continued to allow individuals to donate a high amount:

  1. An Elections Quebec audit found $12.8 million in likely illegally funneled donations from 2006-2011.
  2. A recent CBC analysis found New Brunswick company executives and their families now donating the maximum after the province banned corporate and union donations;
  3. In B.C. in 2017, provincial parties returned more than $260,000 in donations that had been funneled through lobbyists for companies, and people affiliated with unions.
  4. In Ontario, lobbyists sold tickets for Premier Ford’s recent fundraising dinner and, in 2016, executives at a bank involved in bidding on a government contract organized a fundraising event for the ruling party that was attended by Liberal Cabinet ministers.
  5. When Elections Alberta did an audit in 2012 it found dozens of illegal donations. As well, in a 2013 scandal in Alberta, a coalition of construction companies made it clear that their big money donations were conditional on the Alberta government changing the labour law.
  6. Donations from corporations, unions and other organizations were banned in Toronto elections in 2009, and individual donations limited to $750 annually, but a 2016 analysis by the Toronto Star found that big business and other special interest group executives and their families continue to give large amounts to city councillors.

“To match Quebec’s world-leading democratic political finance system, and stop the corrupting influence of big money donations in federal politics, the parties should work together to limit individual donations to about $100 annually and, if the parties can prove they need it, use per-vote and donation-matching public funding to give parties and candidates funding based on their actual level of voter support,” said Conacher.

The key changes that must be made to democratize the federal political donations system are as follows (to see details, click here):

  1. set an individual donation limit of $100 per year (as in Quebec) and require all donations of money, property and services to be disclosed (including volunteer services);
  2. set a limit of what candidates can give to their own campaign of $100 per year;
  3. prohibit loans to parties and candidates except from a public fund (to stop allowing federally regulated banks to buy influence with their loans);
  4. only re-establish per-vote annual public funding to at most $1 per vote, and annual donation-matching public funding (as in Quebec) if the parties can prove they need it, and;
  5. strengthen enforcement and penalties for violations.

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Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179 Cell: 416-546-3443
[email protected]

Democracy Watch’s Money in Politics Campaign page and Government Ethics Campaign page