Eye-popping Tory riding war chests spark opposition suspicions, envy

OTTAWA – The refusal of Conservative riding associations to explain how they spend millions in taxpayer-subsidized cash raises suspicions they’re putting the money to questionable uses, Liberal deputy leader Ralph Goodale says.

Goodale said he can’t fathom how Tory riding associations have racked up eye-popping expenses, such as the nearly $70,000 in “travel and hospitality” reported by Finance Minister Jim Flaherty’s Whitby-Oshawa association last year.

“That’s astounding, that’s breathtaking,” the veteran Liberal MP said in an interview.

“It just doesn’t smell right.”

Ditto with respect to newly minted Labour Minister Kellie Leitch’s Simcoe Grey riding association, which reported just over $65,000 in “other” expenses, without providing any details.

“Any riding with a miscellaneous number that’s that large, that’s more than the total bank accounts of a great many ridings,” Goodale noted.

He was responding to an analysis by The Canadian Press of 2012 financial reports filed recently by federal parties’ riding associations with Elections Canada.

With some late reports still straggling in, the analysis found Conservative associations are by far the wealthiest, sitting on combined surpluses of just over $18 million. Liberal associations reported combined assets of $6.3 million while the NDP totalled $2.3 million.

In all, riding associations for all federal parties ended the year with combined war chests worth nearly $30 million, with little obligation to account publicly for how the money is spent.

Since 2004, associations that wish to issue tax receipts for donations must register with Elections Canada and file annual financial reports, which include the names of donors and the amounts they contribute as well as summaries of how much money was spent.

They report tens of thousands of dollars spent on things like “professional services,” “office expenses,” “fundraising activities,” “polling and research” or just “other” — with no detailed explanations. They do not supply receipts to Elections Canada, which thus has no way to verify whether the money was spent to stage a community outreach event or to pay for the local MP’s wardrobe, new car or family vacations.

The Liberal party supplied contact information for some of its bigger spending riding associations, which offered up relatively detailed explanations about how they spent the money.

But The Canadian Press did not receive any response to repeated requests for explanations from some of the biggest spending Conservative associations, including Flaherty’s and Leitch’s.

“This cloak of secrecy just stokes suspicion,” said Goodale, adding that it “smells of a cover-up.”

“Riding associations should be prepared to answer legitimate questions from the public about what that (spending) was for.”

NDP national director Nathan Rotman couldn’t imagine how a riding association could rack up a $70,000 travel and hospitality tab or $65,000 in other expenses.

“In my time working in riding associations and being field director here, I would have a hard time figuring out how to spend that much money … It certainly makes you wonder what they’re doing with that amount of money,” he said.

Pierre Poilievre, the newly appointed minister of state for democratic reform, said he’s open to proposals for increasing transparency.

“We’re prepared to look at all ideas on how to improve the system,” he said Friday, following a ceremony to honour a Korean War vet in his Ottawa riding.

“I’ll be meeting with members of all parties and others who have ideas on improving transparency and democracy and hopefully come up with some good proposals.”

Poilievre — whose own Nepean-Carleton Conservative association is the eleventh wealthiest in the country with net assets of $202,181 — could not say what accounted for the $10,000 it reported in “other” expenses last year.

“I’ll have to go and check. I don’t have that filing in front of me right now.”

Liberal Leader Justin Trudeau has made transparency a hallmark of his leadership. During last spring’s leadership contest, he voluntarily disclosed all his sources of income — including his inheritance from his late father, former prime minister Pierre Trudeau, and over $1 million in public speaking fees, some of it earned after being elected as an MP in 2008.

He’s promised that all Liberal MPs will begin voluntarily posting their expenses online this fall.

Goodale said the Liberals also “want to play a strong role in leading the way” on transparency when it comes to riding associations and political parties, which similarly aren’t required to provide receipts to Elections Canada to account for the money they spend.

He suggested that the law could be amended to require a greater level of detail in annual financial reports and the provision of receipts, as chief electoral officers past and present have repeatedly recommended.

Riding associations must hire an auditor to sign off on their annual reports but it’s not clear how many exercise their right to demand detailed documentation. At least one 2012 report, for former minister Peter Penashue’s Conservative association in Labrador, is only partially filled in and contains an obvious mathematical error, which evidently escaped the auditor in that case.

Goodale said it might be useful to require that the auditors be at “arm’s length” from the associations to ward against any “insider cronyism.”

While the NDP supports greater transparency and would not object to compelling riding associations to provide receipts for their expenses, Rotman said New Democrats are also concerned about the “paperwork burden” on associations.

“These are volunteer-run organizations at the local level and the compliance procedures are extensive,” he said. “The amount of paperwork, the amount of auditing that you go through in order to file each year is rather cumbersome on a volunteer.”

Rotman suggested a revenue threshold could be set, wherein wealthier associations would be required to meet a higher standard of bookkeeping and supplying receipts than poor ones.

But while cash-strapped NDP associations may still consist of a few volunteers meeting periodically in someone’s basement, the financial reports suggest a good many — primarily the flush Conservative ones — have evolved into sophisticated, perpetual campaign machines with hundreds of thousands of dollars at their disposal.

The Conservatives’ fundraising prowess has long been acknowledged at the national level. Last year, the party raked in $17.3 million — more than double the Liberals’ $8.2 million or the NDP’s $7.7 million.

But the Tories’ fundraising lead is even more commanding at the local riding level, leaving the ruling party far better equipped to prepare for and eventually fight the next election.

While the three main parties spend about the same nationally during an election campaign, the Tories are “way outspending” other parties on the ground at the local level,” said Rotman. “And that makes a huge difference in terms of what an election campaign looks like.

“We are working very hard to catch up to be able to compete dollar for dollar with them on the ground, as we have at the national level for the last three election campaigns. So that’s a big focus of the party headquarters here.”

Goodale acknowledged the Liberals have “got a ways to go to catch up” to the war chests amassed by Conservative riding associations.

Still, he argued the NDP is in even worse shape, with riding assets well below both the Liberals and Conservatives. That “indicates a real deficiency in their ground game,” Goodale said, suggesting New Democrats have not yet been able to build local organizations to sustain their surprise elevation to official Opposition status in the 2011 election.