One big cheque from Daryl Katz, many bigger questions in Edmonton

The public-relations problems continue to pile up for Daryl Katz, the drugstore magnate who wants a new downtown arena in Edmonton for his NHL Oilers to play in. It has been more than a year since Katz Group and the city’s council arrived at a “framework” for an arena funding deal, with Katz relenting on his insistence that the existing Rexall Place be pushed out of the concert business. That framework fell apart Oct. 18 after Katz made new demands and a previously sympathetic council ran out of patience, calling off negotiations and flinging the arena into limbo.

The city had made major concessions to get Katz to back off on the demand for a non-compete agreement with Northlands, the powerful non-profit that operates Rexall Place (i.e., the old Northlands Coliseum, which now bears the name of Katz’s main pharmaceutical brand). But the two sides remained $100 million short of the full amount for the new building—money that both insisted, despite an endless series of fairly strident refusals from the province and Ottawa, would eventually arrive courtesy of “another level of government.”

This confidence in future largesse from on high was one of the enduring mysteries of the arena debate. But on Oct. 24 one of the pieces of the puzzle may have fallen into place as the province’s ruling Progressive Conservatives disclosed their campaign finances from the spring election. The PCs had been atypically hard-pressed by their new Wildrose rival, so much so that they spent $4.7 million on the campaign while raising only $1.6 million in donations—about half as much as the Wildrose took in.

The PCs’ 2012 donors turned out to include the Katz Group, Daryl Katz, his wife, his father, his mother, and several of his employees and business partners. The Globe and Mail dug into the disclosure docs, worked party sources, and learned that Katz had written the PCs a single cheque for $430,000, which was then split up amongst individuals in order to comply with a limit of $30,000 per campaign period. According to the Globe, the money arrived late in the campaign, just as the PCs were struggling in the polls.

The letter of Alberta election law seems clear on the “one cheque, many receipts” style of split donation: under section 34 (1) of the Election Finances and Contributions Disclosure Act, no person is allowed to donate “funds not actually belonging to” them or “funds furnished . . . for the purpose of making a contribution.” And Katz may have another problem: according to a number of media reports, he lives in Vancouver, California, as well as his native Edmonton. Individual donors to provincial parties are legally required to be “ordinarily resident” in Alberta. The Globe’s revelations set off an investigation by Alberta’s chief electoral officer, Brian Fjeldheim, and after Maclean’s made note of the residency requirements in an online post, his spokesman declared that the investigation would include those too.

Alberta’s PC premier, Alison Redford, has remained as firm as ever about refusing to top up the Edmonton arena deal. Katz had apparently expected the city of Edmonton to somehow secure a provincial casino licence to fill in the last $100 million, but Redford is still saying there will be no cash and no casino. She has also promised to make the results of the electoral officer’s investigation public—something Alberta law does not yet technically require.

Meanwhile, the hubbub surrounding Katz’s donation has had the effect of raising questions about his presence on the board of AIMCo, the corporation that invests public pension funds and endowments (such as the Heritage Savings Trust Fund) on behalf of the province. The WAM Development Group is in business with Katz to develop the area around the proposed arena; WAM and AIMCo, meanwhile, are partners in northeast Calgary’s $3-billion StoneGate Landing office-retail complex, the biggest such project in that city’s history. Alberta Finance Minister Doug Horner, who appoints the AIMCo board, laughed off Wildrose questions in the provincial assembly about the links, saying, “Mr. Speaker, next they’ll probably be suggesting that I was at the grassy knoll when JFK was assassinated.”