Summer school for scandal – An ITQ refresher course on in-and-out (and why it matters)

With just hours to go before the Ethics committee kicks off its eleven-months-in-the-making investigation into the Conservative in and out election spending scheme, it seems like as good a time as any to re-post the official ITQ In and Out FAQ, which was originally published on April 28, 2008.

What, exactly, are the Conservatives accused of?

The commissioner of elections, William Corbett, is currently investigating the possibility that the party exceeded the spending cap on advertising by more than a million dollars during the last election by transferring money to the campaigns of individual candidates, where it would go on the books as an advertising expense for the local campaign. The local officials would then return the money to the party. Once the election was over, each of the local campaigns would be able to apply for a partial reimbursement from Elections Canada, which refunds up to 60 per cent of campaign advertising expenses.

When those candidates applied for rebates from Elections Canada, the agency looked into exactly what kind of advertising was bought with the money. Elections Canada ruled that the advertising had actually been paid for by the national campaign; despite the fact that the money had ostensibly been spent by the local campaign, it hadn’t, in fact, incurred any real expense – and was, therefore, ineligible for the rebate.

How did the Conservative Party respond?

Not surprisingly, with outrage: the party promptly challenged the ruling, and sued Elections Canada, arguing—then and now—that there was nothing untoward about transferring money between campaigns; it was entirely within the rules, and a normal practice for every party, which is something that, as yet, the party has not been able to demonstrate. The lawsuit is still before the courts, but is not directly tied to the investigation by the elections commissioner, which is still underway.

After Elections Canada ruled against the Conservatives on the rebate issue, Canada’s elections commissioner—who is charged with looking into possible violations of the law—began his own investigation into whether the “in and out” system was actually designed to allow the national campaign to spend more than the legal limit.  It was that investigation—still ongoing—that resulted in the recent made-for-CBC-TV raid on Conservative party headquarters. Despite what some in the party, including Stephen Harper, initially suggested, the search was authorized by a Toronto judge, and performed under the aegis of the RCMP, and had nothing to do with the party’s lawsuit against Elections Canada.

How did Corbett convince a judge to issue a warrant to search the headquarters of a federal political party? Weren’t the Conservatives cooperating with his investigation?

Corbett’s office submitted hundreds of pages of internal party emails, invoices, and other documents to bolster his belief that the party may have violated the law by skirting the spending limits. The commissioner also filed a lengthy affidavit from the lead Elections Canada investigator, Ronald Lamothe, who gave a meticulous account of his efforts to get answers from the Conservative Party, with limited success. According to Lamothe’s report, more than half the candidates contacted refused to speak to Elections Canada; others submitted boilerplate responses, on Conservative Party letterhead, declining the request for an interview.

Those candidates who were willing to speak to Elections Canada, however, gave remarkably consistent accounts of what went on during the campaign, particularly the very explicit directions from the party on how the money was to be spent, and, in some cases, even admitted that they had no idea exactly where or how the money had been spent. In the months since the scheme first came to light, other former candidates have gone public, and have claimed that the party exerted considerable pressure on those who were reluctant to take part. This was backed up by documents made public last week when the search warrant was unsealed. Lamothe also raised the possibility that someone in the party may have deliberately altered at least one invoice from the advertising company involved in the buys in order to make it appear that individual campaigns were purchasing the ads, and not doing so as proxies for the national party.

Is that bad?

Oh, yeah. If that turns out to the case, it would make it difficult for the Conservatives to continue to insist that the party had always intended to follow the rules; as is so often the case, the cover-up would be worse than the crime, both politically and legally. Breaking financing rules under the Canada Elections Act, while serious, is one thing; forging or altering official documents could very well result in criminal charges.

Was there any other politically damaging information in the warrant request?

Several high-profile Conservatives were named in the documents, including the Prime Minister’s deputy chief of staff, Patrick Muttart, at the time, the party’s executive director, senior Quebec cabinet minister Lawrence Cannon, and Mike Donison, special advisor to Government House Leader Peter Van Loan on, of all things, democratic reform. Not surprisingly, the Liberals are now pushing for the immediate, if temporary suspension of the three Conservative campaign officials—Muttart, Cannon and Donison—now employed in senior roles in the Harper government.

So what happens next?

Based on the new allegations contained in the warrant, the Liberals have challenged the Tories to release every one of the contested ads, and encourage any and all local candidates involved in the scheme to cooperate with Elections Canada. All three opposition parties are also getting ready for a showdown at the Procedure and House Affairs committee, which has been held hostage for more than six months by a government-backed filibuster against a motion to hold its own hearings into the scheme. According to the opposition, there are more than a few former Tory candidates who would be more than willing to testify about their experiences during the last campaign. The committee could also call party officials like Doug Finley, current staffers like Donison and Muttart, and even—in theory—Harper, in his capacity as leader.

UPDATE: After an energetic but ultimately unsuccessful attempt to scupper a second motion — this time at the Ethics committee — the previously irresistible force met the immovable object in committee chair Paul Szabo, who gave the Conservatives just over eight hours of committee time to make the case against looking into the party’s financing practices before shutting down debate and putting the question to committee members, much to the delight of the opposition. The motion – proposed by Liberal MP Charles Hubbard, but enthusiastically backed by all but the Conservatives – passed easily, and was the impetus for the special summer hearings that are set to begin later today.

Bonus question: Who came up with the whole “In and Out” nickname, anyway?

The Ottawa Citizen, which broke the story last year, was the first to use the phrase “In and Out”, although it actually originated with one of the candidates, who employed it while explaining describing the system of payments to reporters Tim Naumetz and Glen McGregor last year. Money from the national campaign went IN (to local candidates’ coffers), and then OUT (to pay for advertising). Voila: “In and Out”. (Possibly of interest only to style guide aficionados, but included here anyway, for the record: McGregor prefers the term to be styled as in and out – with no hyphens, except when used as a an adjective to modify ‘scandal’ or scheme’ – and not capitalized.