Beyond The Commons

Aaron Wherry covers all the goings-on in and around Parliament Hill. Follow Aaron on Twitter: @aaronwherry

Categories: Beyond The Commons, Capital Read

In-and-Out FAQ

by Aaron Wherry on Friday, March 4, 2011 2:17pm - 128 Comments

Glen McGregor answers all your in-and-out questions.

Didn’t the other parties do the same thing?
Not according to the CEOC. The major parties all transfer money back and forth between their national campaign and candidate campaigns, and between candidate campaigns. Some parties’ candidates have also participated in pooled media buys — typically, a group of candidates in nearby ridings buy an ad together and share the costs. The CEOC maintains this is fundamentally different because these candidates legitimately incurred the costs of the ads, whereas the cost of the ads claimed by the Conservatives candidates were incurred by the party.

Tags: elections canada, glen mcgregor, in-and-out

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http://intensedebate.com/people/Ottawa_Centrist Ottawa_Centrist

You have money you legally can't spend. You send it to 'Tony' for cleaning. Tony sends you back money you can spend.

It isn't a new practice, shifting money around to avoid the law.

alfanerd

That's not how it works. Not even close.

LdKitchenersOwn

That's true. I believe in at least one case the Party told the candidate they were asking to participate that they didn't even need to send the money back to the national party themselves, as the national party was capable of placing the money in their accounts for a few hours and then taking it right back out again without the local candidate even having to do ANYTHING themselves.

I'm almost certain there was also at least one case where the candidate found out that the money had been transferred into his accounts and then right back out again when he was going through his paperwork AFTER the election, and couldn't figure out how to reconcile how money came into his own account and then went back out again WITHOUT HIS KNOWLEDGE.

alfanerd

I'm almost certain there was also at least one case where the candidate found out that the money had been transferred into his accounts and then right back out again when he was going through his paperwork AFTER the election, and couldn't figure out how to reconcile how money came into his own account and then went back out again WITHOUT HIS KNOWLEDGE.

if that is the case they probably did break the rules. but you gotta wonder? what did they gain by not doing things completely above board? nothing, as far as i can tell.

criselis

They got 1 million dollars more of ads. The local candidates got 60% of the amount back as a rebate paid for by you and me as a tax payer. You may be alright with funding the Conservatives but I would prefer not to.

alfanerd

The CEOC maintains this is fundamentally different because these candidates legitimately incurred the costs of the ads, whereas the cost of the ads claimed by the Conservatives candidates were incurred by the party.

And what facts are used to make that determination? That is the central question here, why is a pooled media buy in one case legitimate, and not in the other?

dave

And what facts are used to make that determination?
The extensive paper trail and interviews with Conservative candidates that described the practice? I mean, even the Conservatives have pointed out that one reason CEOC knows about it is because they told them they did it.

alfanerd

and what does this extensive paper trail reveal?

dave

That the money belonged to the Federal party and, therefore, was not a valid expense for the candidates themselves.

Hence, why EC is refusing to reimburse the the candidates for it and why the Conservative Party is fighting tooth and nail because, without this money being allotted to the candidates instead of the party, they're 1.1 Million dollars over the expense cap at the national level and facing additional penalties. Oh, and they want you to pay them 60% of that instead of 50%. That doesn't hurt either.

AT1

Dave: That the money belonged to the Federal party and, therefore, was not a valid expense for the candidates themselves.

That's where you're wrong, and that's what the first judge contended was in fact legal. All parties are allowed to transfer money to and from local riding association.
dave

Parties are allowed to send money down and candidates are allowed to send money up. But, EC maintains that sending the money to the candidate with the implicit intent that it be sent immediately back to the party so it can buy things it's otherwise not able to is not engaging in that practice. That's shell gaming at best, and money laundering minus the criminal source at worst. If we were to scheme to see me get billed X to go into your bank account at the end of the year to reduce my holdings for tax purposes, then I invoice you for X back at the start of the year, to "fund operations" while sending you receipt you can write off, I can guarantee you Revenue Canada is going to take issue with that if/when they catch on as well.

Furthermore, what the first judge decided no longer matters because it's been overturned. We'll have to wait and see what the last judge has to say, presuming the Supremes deem to hear the matter at all or the Tories dare risk the press of having that level tell them "no".
alfanerd

No, that's not it either. Read the FC and FCA decisions if you're confused. In all in/out schemes the $ belongs to the Party – that's the whole point of an in-out scheme. It's perfectly legal for a party to give $ to a candidate to help in its campaign, and it's also perfectly legal for that candidate to spend that money on advertising.
Keith in Brampton

The real issue, it seems to me, is that this is not really a "pooled" advertising purchase, but an attempt to hide national overspending while simultaneously allowing candidates to maximize their own rebates from the taxpayers.

If the national party were giving them money for their local advertising, that would have been fine. If the candidates had contributed to the national campaign, that too would have been fine. But the EC alleges this was an attempt to claim the national advertising – over and above what was legally allowed – as local advertising. And to then get reimbursed for same. In my books, that's fraud. Whether it is in legal terms, we'll have to wait and see.
alfanerd

again, you're just claiming a conclusion as the reason for why it's illegal.

what, in concrete terms, differs from this media buy with respect to other media buys that makes this one fake?

you cant suggest that this media buy is not really a pooled media buy because its an attempt to circumvent the national spending limit unless you can actually show a concrete difference between what they did and what other parties did.
Thwim

People have explained it to you a couple of times.

Transferring down for an advert is fine.
Transferring up for an advert is fine.

Transferring both ways for an advert is not. That's the difference.
alfanerd

no, that's not right either. nice try though. every party does both ways, and EC and the Courts agree that transferring both ways is legit.
Jenn_

Ah. I think I see where your confusion arises. The law does place a value on intent. For example, if you intend to kill someone, that's murder. If you just kill someone without intending to, that's manslaughter. A lesser charge with lesser penalties.

In this case, Elections Canada contends the Conservatives intended to pay for national advertising through candidates individual expense claims. Their evidence for this is that the candidates basically told them so. Plus we have the fake invoices (although much more information is needed about that) and the threats and character assassinations for those who refused to go along.

When other parties' candidates get together to do a regional media buy, they intend to do a regional media buy with other candidates of that region. The paperwork may look remarkably similar, but the intent is different.
alfanerd

i've dealt with this silly notion of intent on this thread as well. it's clearly not it. intent is relevant in cases where there is an offense committed, but the intent itself cannot render an otherwise legal act illegal.
Marion

Yes, but according to David Akin (http://www.ottawasun.com/comment/columnists/david_akin/2011/03/02/17472001.html) candidates from Thunder Bay were using that money to buy ads in Toronto, and Lawrence Cannon was buying ads in Quebec City, when the riding he is running in is right across the river from Ottawa.

If you replace "ads" with "flyers", for example, would that be a local riding expense if it's not actually being distributed in your riding?
alfanerd

if that's the case, then you're on to something here.

gottabesaid

Because, as far as I can tell, the pooled media buys in previous cases weren't intended to give the national campaign more breathing room for spending. The national campaign was at its limit. Sending the money to the local campaigns to pay for national advertising was the way around it.

alfanerd

That would make sense if it were true. The pooled media buys, in ALL CASES (including the other parties), bought advertising – the content of which was exactly the same as the national advertising except for a tag line identifying the candidate, and was only broadcast in the respective candidates constituency. These advertisements promoted the party and the leader primarily, but included a tag line identifying the candidate. This much is clear, and from the Federal Court and the Federal Court of Appeal, completely proper.

Anyhow, you didnt really so much answer my question as you phrased it differently.

If sending the money to the local campaign was legal, and paying for the advertising was legal, and the advertising promoted the candidate or the party and was broadcast locally, what makes this "a way around" the spending limits instead of "making the most" of spending limits?

gottabesaid

I'll try, but I'm not an accountant, and I'm not a lawyer, and I'm not a judge. And, ultimately, it's up to the judge as to whether this is fair game, obviously.

OK… Scenario A: local campaign has $100. They raised it, it came from the local campaign. They send it to the national campaign. The national campaign spends it. The national campaign doesn't go over its limit. This is OK.

Scenario B: National campaign has $100. They raised it, it came from the national campaign. They send it to a local campaign. The local campaign spends it on local advertising in the local market. The local campaign doesn't go over its limit. This is OK.

Scenario C. National campaign has $100. They can't spend it, because they're at their limit. They send it to the local campaign. THEY don't spend it. They send it back to national. They spend it on 'local' advertising, though the advertising is essentially national in nature (and obviously this is a source of disagreement between EC and the Tories, and the judge will decide). National sends invoices to local to claim for spending money it never really had in the first place.

So, it's the national campaign, using unused local limits, to extend to their own spending capabilities. IMHO, this is violating the spirit of the law. The judge will decide whether it violates the letter of the law.

alfanerd

thanks for that. i disagree for the reasons below, but i appreciate you taking the time to write it because it shows how the media have been quite greedy with their explanations, and just insinuate rather than explain.

Scenario C is completely legal, and both the FC and FCA decision confirms that (the FAC overturns the FC decision on other grounds).

And I would add that in both scenarios C and B, your last point for scenario C "National sends invoices to local for claim for spending money it never really had in the first place" applies.

That's because whether the advertisement by the candidate using $ received from the federal campaign is bought through an ad agency or indirectly through the national campaign, is completely irrelevant to the legality of the scheme, as its perfectly legal for a candidate to buy advertising through the national campaign.
gottabesaid

"thanks for that. i disagree for the reasons below, but i appreciate you taking the time to write it because it shows how the media have been quite greedy with their explanations, and just insinuate rather than explain."

Actually, I thought I did a pretty good job of sifting through the details without getting caught up in the rhetoric that's been flying about in the media, but thanks. I've based my comments on what I read in the McGregor post above, which seemed pretty straightforward and non-accusatory to me.

I'm going to try a different explanation. I'm going to dumb it down for my own benefit here, so please don't accuse me of trying to insult your intelligence. : )

Let's say I have $1,000. It's illegal for me to spend more than $500. You have no money. You're allowed to spend $500 as well. I want to buy $1,000 worth of apples, but I can only buy $500 worth of apples — in fact it's illegal for me to spend more than $500. SO, I give $500 and tell you to buy $500 worth of apples for me. In the end, I get my $1000 worth of apples.

You might think it's ludicrous that there's a limit on how much money I can spend on apples, but the limit is there. I used you to get my $1,000 worth of apples. The question is (and this is for the courts to decide), did I use you illegally to get my $1,000 worth of apples? Or is it OK since I gave you the money, and you gave me the apples?

LdKitchenersOwn

If sending the money to the local campaign was legal, and paying for the advertising was legal, and the advertising promoted the candidate or the party and was broadcast locally, what makes this "a way around" the spending limits instead of "making the most" of spending limits?

Intent.

My understanding is that when other parties have done similar (though not the SAME) transfers in the past it was impossible for their intent to have been to illegally exceed the federal spending limits because they weren't yet close to the federal spending limits. In the case of the CPC, however, it is possible to argue that the federal party's intent was to continue to spend money, even though they were at the cap, by making it APPEAR as though the money was being spent by someone else.

alfanerd

Thank you. That's the answer I was looking for and I think you're right, in that that's what EC and the DPP believe the difference is. And if so, it is the biggest scandal in Canadian history, and I mean the behavior of EC and DPP, not that of the conservatives.

If it's legal to do something, it doesnt matter what your intent is. (conversely, if its illegal to do something, it does matter what your intent is.)

so what you're suggesting is that a scheme would be legal if a party is not close to its spending limit but illegal once you get close – and none of this is in the Elections Act, and that somehow the Conservatives ought to have known that they were doing something illegal (despite doing something legal), because they were already close to their spending limit?

That is insanity. We are governed by the rule of law in this country, not by the rule of capricious biased pro-liberal bureaucrats.
LdKitchenersOwn

If it's legal to do something, it doesn't matter what your intent is. (conversely, if its illegal to do something, it does matter what your intent is.)

Mens rea.

Your intent effects whether or not what you did was illegal. If I punch you in the chest and break your ribs because you ticked me off and my intent is to hurt you, that's assault. If I punch you in the chest and break your ribs because your heart just stopped and my intent is to save you, that's not.

so what you're suggesting is that a scheme would be legal if a party is not close to its spending limit but illegal once you get close

No, what I'm suggesting is that a similar scheme could be legal if a party is not close to its spending limit but illegal once they go over. Violating the spending limit is the rule that is alleged to have been broken, so in comparing this scheme to previous schemes it's certainly relevant if the other parties didn't spend over the limit in any conceivable viewing of their spending. You can't violate a spending limit you don't have enough money to violate.
LdKitchenersOwn

To put that second point more plainly, the allegation is that the Tories reached the national spending limit and then cooked up a scheme to keep spending beyond the limit by making it seem like somebody else was doing that spending. In comparing the Tories' use of transfers to previous uses of transfers by other parties, the Tories hitting the national spending limit is an important factor because if they hadn't hit that limit they'd have been allowed to just keep spending.
alfanerd

yes, mens rea is a necessary component of a crime, but if there's no actus reus (im guessing you can find the wiki entry) the other component of a crime, there is no need to determine what the mens rea was.

You can't violate a spending limit you don't have enough money to violate.

Fair enough – you're right on that. But I still cant find a compelling reason to assign this election expense to the party when the conditions for assigning it to the candidate are all met.
LdKitchenersOwn

Sure, but there WAS an actus reus – the transferring of the funds. No one questions that the funds were transferred, the whole point is that people are trying to get reimbursed for the funds that were transferred, so the transfer of the funds is not in question. What IS in question is whether the transfer of the funds was a legitimate transfer for the purposes of engaging in a permitted regional media buy, or if the "regional media buy" is an artificial construct designed as an accounting smoke screen intended to cover-up a deliberate contravention of the campaign spending limits.

No one questions the legality of Mr. Capone transferring funds from one of his holding companies to another to pay for new trucks, but if that line in the ledger isn't really about buying new trucks but is a smokescreen to cover up the purchase of trucks filled with RUM, then that transfer of money may well be illegal.

If the Tories transferred the money in order to pay for a regional media buy they'll probably be fine, but it's up to a court to decide whether they did that, or whether what they really did was exceed the campaign spending limit and engage in disingenuous transfers of funds on paper to make it LOOK like that's what they were pooling money for a regional ad buy when they really had no intention of doing that at all.
alfanerd

the transferring of the funds was LEGAL. it can not be the actus reus. the actus reus refers to the criminal act. mens read refers to the criminal mind (quite literally, if translated from latin).
LdKitchenersOwn

It's legal to transfer funds from the party to the local candidate in order to facilitate the purchasing of a regional media buy. It may not be legal (yet to be ruled on by a judge) to transfer funds from the party to the local candidate in order to exceed the party's national spending limit by making the party's excessive spending APPEAR to be candidate spending on a regional media buy, when that's not really what it is.

In a sense I suppose the exceeding of the spending limit is really the alleged actus reus, but as the transferring of the funds is allegedly the act the party committed in order to HIDE the exceeding of the spending limit it also is an actus reus, in a sense, as it is the act they committed to try to obfuscate their breaking of the spending limit.
Not Stephen Colbert

If it's legal to do something, it doesnt matter what your intent is.

This is extraordinarily wrong. Intent makes otherwise legal acts illegal all the time. Hell, under section 49 of the Criminal Code virtually any act at all could, under the appropriate circumstances, be rendered illegal.
alfanerd

49. Every one who wilfully, in the presence
of Her Majesty,
(a) does an act with intent to alarm Her Majesty or to break the public peace, or
(b) does an act that is intended or is likely to cause bodily harm to Her Majesty,
is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.

Nice try but not quite. The intent for offenses like these are determined on an objective basis – that is the court will not try to determine the subjective intent of the accused, but they will try to determine the intent of a reasonable person who performs the act.

Give me another example, what specific act, when performed with a specific intent is legal, and when performed with a different intent is illegal?

Or, you can go in the presence of Her Majesty, cause her harm, say you did not intend to do it, and test your theory.

And as your last point, you're again incorrect – the courts would have to construe section 49 in a manner which complies with the Charter, which suffice it to say excludes the construction you're suggesting.
Not Stephen Colbert

"Depending on the provisions of the particular section and the context in which it appears, the constitutional requirement of mens rea may be satisfied in different ways. The offence can require proof of a positive state of mind such as intent, recklessness or wilful blindness. …

"A truly subjective test seeks to determine what was actually in the mind of the particular accused at the moment the offence is alleged to have been committed. In his very useful text, Professor Stuart puts it in this way in Canadian Criminal Law (2nd ed.), at pp. 123-24 and at p. 125:

"What is vital is that this accused given his personality, situation and circumstances, actually intended, knew or foresaw the consequence and/or circumstance as the case may be. Whether he "could", "ought" or "should" have foreseen or whether a reasonable person would have foreseen is not the relevant criterion of liability."

Cory J. for the majority, R. v. Hundal, [1993] 1 S.C.R. 867.
http://www.canlii.org/en/ca/scc/doc/1993/1993canl…
alfanerd

yes, what you're talking about is the mens rea, I know. What Im saying is that if there is no actus reus, there is no need to examine the mens rea.

perhaps my original phrasing could lead to the interpretation that you took, but what I meant was that unless there is an actus reus which corresponds to an offense, there is no mens rea to even consider.

every conviction requires a mens rea, but the point is that the actus reus is just as important.

thats why when i say, 'If it's legal to do something, it doesnt matter what your intent is'

its layman speak for you still need a freaking actus reus. and strictly speaking, its not incorrect – s. 49 may mention intent, but most s. of the cc dont, and mens rea must still be established to get a conviction, so traditionally, when people speak of 'illegal acts' they speak of 'illegal acts – along with a criminal intent', its implied. by corollary, when people speak of 'legal acts' it excludes 'acts which are illegal with a criminal intent'.

In other words, you are spectacularly wrong.
gottabesaid

…mens rea, actus reus…

Where's Unfrozen Caveman Lawyer when you need him?
Not Stephen Colbert

What Im saying is that if there is no actus reus, there is no need to examine the mens rea.

That is quite plainly not what you were saying at all, though it does happen to be true.

You said, "the court will not try to determine the subjective intent of the accused". You were wrong.

Now you go on to say that "you still need a freaking actus reus". Well, duh. But the actus reus could be anything.

Look at s.49 (a). What's the act element (my criminal law professor tried to persuade us not to say "actus reus")? It is wilfully, in the presence of Her Majesty, doing an act that is accompanied by the requisite mental state. It could be any act.

Now let's look at your statement that, "If it's legal to do something, it doesnt matter what your intent is." I took this to mean that a generally legal act could not be made illegal due to the intent of the actor, which I believe is a fair interpretation in context. It is also certainly wrong, because there are all sorts of legislative provisions (in the Criminal Code and elsewhere) that render generally legal acts illegal due to the intent of the actor.

But maybe I was wrong to interpret it that way. Now you seem to be saying that you meant that intent alone doesn't make something illegal (i.e. "you still need a freaking actus reus"), which is true, but no one is saying that intent alone makes the in-and-out transactions illegal (if they were, which has of course yet to be determined), and you seemed to be addressing the controversy directly, so I guess that didn't occur to me as a possible interpretation. Well, that and because of the meaning and order of the words.
Thwim

Intent matters. Hence why there are different levels of homicide charges.
alfanerd

yes, but unless you do commit homicide, your intent does not matter.
Thwim

And the act of transferring funds down to local candidates and back to the national party is the action for which intent matters. Good to see we agree.
alfanerd

no, transferring funds is legal back and forth is legal.

Keith in Brampton

Except this isn't a true pooled media buy, but and attempt to pass off a national buy as something else.

alfanerd

and what is it about this pooled media buy that makes it not a pooled media buy but an attempt to pass of a national buy as something else?

i mean other than your prejudice and general hatred of the conservatives?
Holly Stick

The basic dishonesty of the Conservatives? Buncha crooks.
alfanerd

thanks for proving my point
LdKitchenersOwn

what is it about this pooled media buy that makes it not a pooled media buy but an attempt to pass of a national buy as something else?

Possibly the fact that the entirety of some candidates' involvement in the "pooled media buy" was simply the fact that the money from the national party sat in their local accounts for a short period of time, whether the local candidates knew that it was being transferred in and then right back out again or not. Or the fact that at least one candidate only found out after the election that the money had been transferred in and out of his account. Or the fact that the scheme was so plainly an attempt to circumvent campaign spending limits that some of the party's own candidates refused to participate because they didn't believe that the scheme could possibly be legal.

AT1

GBS, fair enough, but the problem remains that no single action was against the law, whereas Election Canada contends that the combined actions were.

It seems clear that the Cons found a loophole in the regulations and exploited it. That hardly makes it fraud. Change the regulations,close the loophole, but arguing retroactively that something is illegal in combination, but not in components, stretches any sense of logic.

Sigh, wouldn't it be simpler to give each party a maximum spending limit and let them divvy it up to how they see fit, without having to arbitrarily decide what constitutes a local or national campaign.

LdKitchenersOwn

arguing retroactively that something is illegal in combination, but not in components, stretches any sense of logic

Aren't there all sorts of actions that are legal as separate components, but not legal in combination?

AT1

Like what, LKO?
Jan

We don't know what evidence the Prosecutor has. He says it's voluminous – I'm taking him at his word. Don't forget they raided the offices of the CPC. All they need is some correspondence indicating what the plan actually was. And then there's the candidates and their agents. Some of them testified at the Kangeroo committee and they could really nail the party. There were tales of bullying and illogical explanations about how the money was being used.
tobyornotoby

Mundane: Drinking at the bar then Driving home
Bond villain style: Filling your pool with piranha fish then Inviting someone to come to swim
CSI Canada: Covering your driveway with electro-conductive jelly then Slicing the outer insulation of an extension cord and connecting it to a power source then waiting for your wife to come home to pick it up and plug in her car overnight

Don't try any of these at home kids
alfanerd

nicely done coming up with these examples. the difference is that these are quite clearly illegal, as in an Act states that drinking and driving, in combination is illegal.

that's not the case here.
Holly Stick

The whole point is the combination of legal actions to make an illegal action.
alfanerd

what illegal action is that, and where in the act is this action defined as illegal?
Not Stephen Colbert

Not everything that's illegal is clearly illegal. That's why we have appeals and dissents, and why law schools get to assign extremely long casebooks that I have to spend most of my March break getting caught up on.
LdKitchenersOwn

Well, except that in this case spending in excess of campaign spending limits is pretty axiomatically illegal. The question for the courts is did the Tories do that clearly illegal thing and try to make it look like something else, or did they legitimately do something else.
Not Stephen Colbert

This is true. I don't promise that everything I say in this thread will be relevant to the in-and-out issue, though. Sometimes I just feel the need to correct people who are confused about the law.
alfanerd

yes, go back to studying, you need it.
LdKitchenersOwn

Spending over a million dollars more than the campaign spending limit is quite clearly illegal.

The question for the courts is, did the Tories do that and try to cover it up by disingenuously moving money around between bank accounts and cooking up some misleading "invoices", or did they simply not do that at all.
dave

As my dad liked to note. it's illegal to knowingly conceal a firearm. It's also illegal to transport one in the open.

But, the simpler one is that it's legal to be drunk. As long as you're not in public. And don't hurt anyone. Or drive.
Not Stephen Colbert

More on point, it's perfectly legal, in and of itself, to give money to a police officer. It is not legal to give money to a police officer with any of various intents (to protect yourself from punishment for a crime, for instance). It's perfectly legal, in and of itself, to wear a mask. It is not legal to do so with intent to commit an indictable offence. There are a lot more examples.
Marion

While not "illegal" in a criminal sense, putting too much money into your RRSP will get you a fine from Revenue Canada. It doesn't matter if you made one deposit of 100k or 100 of 1000.

But putting money into your RRSP is not wrong per se, until you have reached your limit.

gottabesaid

Well, what is creative accounting to some is gaming the system to others. That's why we have judges. I'm in the camp that believes that the spirit and intent of the law was broken. Others believe this was a legitimate loophole. Again, let the judge have at 'er.

As a point of clarification, I've never called this fraud. If it were fraud, criminal charges would have been laid.

Keith in Brampton

There's the legal definition, and there's the moral definition. I have no problem saying that if they did what they are accused of doing, they have definitely committed fraud in the moral sense.

Kathryn_C

"It seems clear that the Cons found a loophole in the regulations and exploited it. That hardly makes it fraud. Change the regulations,close the loophole, but arguing retroactively that something is illegal in combination, but not in components, stretches any sense of logic."
—
Except they didn't find the loophole – the Bloc found it in 2000. It was in the process of being closed even as the Conservative went ahead and exploited it: http://en.wikipedia.org/wiki/In_and_Out_scandal

They could not have been unaware.

alfanerd

So that graph in the link provided by AW is quite accurate and quite helpful. My questions to the harper haters and those who are just "outraged" at this scandal is these:

1. What step, or combination of steps (using the numbers in the link provided by AW) is illegal?

2. Which steps did the other parties not follow thereby making their in-out scheme legal, but making the conservative scheme the greatest threat to democracy ever?

canon70

A key concern of the CEOC was the failure of the candidates to submit documentary evidence of the existence or terms of a contract with RMI under which the advertisements were purchased by the candidates directly, or by the Party as the agent of the participating candidates. Indeed, the Party conceded that no contractual document between RMI and the candidates or the Party existed. This is particularly significant because, except for the candidate and the official agent, no one may incur an expense on behalf of a campaign without the written consent of the official agent.
http://decisions.fca-caf.gc.ca/en/2011/2011fca74/…

alfanerd

Thanks for your reply. It's interesting i've been asking this question throughout this thread, and I've received so far 4 different answers. It's intent, it's the lack of documentary evidence, it's national advertising disguised as local, it's the fake invoices…

So, if you're right, then the scheme was legal except that the paper trail was insufficient? SHOCKING I tell you. What has our democracy come to when a political party can flout the law in such disgusting fashion, by not providing sufficient paperwork. Im outraged.
alfanerd

Thanks for your reply. It's interesting i've been asking this question throughout this thread, and I've received so far 4 different answers. It's intent, it's the lack of documentary evidence, it's national advertising disguised as local, it's the fake invoices…

So, if you're right, then the scheme was legal except that the paper trail was insufficient? SHOCKING I tell you. What has our democracy come to when a political party can flout the law in such disgusting fashion, by not providing sufficient paperwork. Im outraged.

canon70

lol. Try making a claim on your income tax without sufficient paperwork and see what happens.
LdKitchenersOwn

the scheme was legal except that the paper trail was insufficient? SHOCKING I tell you.

You don't think it's a problem, if one is accused of cooking up a (potentially illegal) scheme to make a mere bank account shell game look like a legitimate "regional media buy" in order to ignore campaign spending limits, that there's insufficient documentary evidence that a "regional media buy" actually took place?
LdKitchenersOwn

It's intent, it's the lack of documentary evidence, it's national advertising disguised as local, it's the fake invoices…

Yes. It's all those things.

The intent of the scheme was to circumvent the campaign spending limit.

There's little documentary evidence to suggest that the innocent "regional media buy" that supposedly explains away the alleged overspending was actually an innocent "regional media buy" (and, as an aside, also potentially "cooked-up" documentary "evidence" which suggests a possible attempt to FAKE a "regional media buy").

It was "local advertising" that many of the local candidates didn't want, that some local candidates complained would hurt them, and that in some cases local candidates weren't told they were participating in. It was also so transparently an attempt to make national spending look like local spending that some of the party's own candidates refused to participate in the scheme because they believed it was an illegal scheme to make national spending look like local spending.

And if your defence of your accounting trick is that the spending is simply for a routine regional media buy, but you create… let's say "inauthentic"… invoices that appear to be from an advertising company and to show candidates spending funds to pay for a regional ad buy from said company, but the invoices AREN'T from said company, and they were made without the knowledge of the company or the candidates, well, let's just say it doesn't bolster that defence.

Dave

Wasn't there "local advertising" in ridings which (and here's where the CPC's argument starts to fray a little) there aren't actually any local TV stations?

alfanerd

That may be closer to the truth of the matter. Strangely, I've read both the FC and FCA decision and couldnt find anything about altered invoices. Do you have some information on what invoices were altered and how they were altered?

Jan

All invoices were identical, except for the amount. So they appear to be separate invoices from Retail Media. Unfortunately they all contain the same typo. That's what tripped the auditors. And, Retail Media said they didn't issue them and that the format wasn't even theirs.

alfanerd

Ok thanks. That's helpful. That cant be the whole story though, there needs to be more, but Im not sure if that 'more' is public yet.

Keith in Brampton

I think I read somewhere on this site a while back (can't remember which story) that the national party claims it was given one invoice with all the names and the breakdown on it, and they then removed the information about the other candidates from the copy prepared for each candidate.

LdKitchenersOwn

They may have claimed that, but I'm also quite certain that the advertising company said that the invoices looked nothing like the real invoices that they prepare for clients.

AT1

PM, other parties do pooled media buys. How they split up the bill for reimbursements?

Jan

I don't know but EC puts out a handbook onb how to handle all this.

TimesArrow

Let's see if i've got this[ corrections welcome. Keep it simple please]

The national campaign was maxed and conceived of a scheme to use up spending room still available at the local level. Unethical? Maybe? Breaking the spirit of the rules rather then stirct legal intent – yes. Illegal – no?? yes?? I don't know.

The kicker seems to be the attempt to cover it up with faked invoices. How on earth is this not illegal and unethical? Or did i miss something?

LdKitchenersOwn

I'd say at this point "illegal, maybe" until the courts rule.

That said, I would like to think that even if they managed to skate on a technicality that the Tories would pay a price for having engaged in a scheme that was so transparently unethical that some of their own candidates refused to participate on the grounds that they were certain that it had to be illegal.

Probably not though. Not only did Harper learn a whole lot from studying the Master, it seems to me that he's also inherited Chretien's Teflon coating.

TimesArrow

Still, he'll never be able to pull this off:not with a straight face.

“A proof is a proof. What kind of a proof? It's a proof. A proof is a proof. And when you have a good proof, it's because it's proven.”

alfanerd

Breaking the spirit of the rules rather then stirct legal intent – yes. Illegal – no?? yes?? I don't know.

you're quite right timesarrow, they broke the spirit of the law, not the letter. anyways, that's the case as far as i can tell.

you cant get convicted in canada for 'breaking the spirit of the law'.

http://dougsamu.wordpress.com dougrogers

Then why bother making laws?

alfanerd

laws dont just create prohibitions, first of all.

secondly, in cases where a law does create a prohibition, it needs to be clearly set out.

the principle that what is not forbidden by the law is allowed by the law, is a necessary one in a free society. would you like to get arrested nor for something that is illlegal but because some capricious douchebag thinks you broke a vague concept such as the "spirit of the law"? if so, I have excellent travel recommendations for you: saudi arabia, north korea, zimbabwe, iran, …

anyhow, it speaks to your ignorance on this matter and of law generally that you would consider it desirable that people get arrested for breaking the "spirit of the law".

its an extremely authoritarian attitude to take.

http://dougsamu.wordpress.com dougrogers

You sure do project a lot.

I suggest that offending behaviour, that the members of a consensual and agreeable society agrees violates the spirit of that agreeable society, is what causes them to create laws.

Lets say society passes a 'letter of the law' kind of law that prohibits anyone from breaking a window. So someone comes along and tosses a rock through someones window.

Throw them in jail! They broke the letter of the law!

Why did they break the window? Because they had a rock and wanted to throw it. Then it's jail for them.

Or did they break the window because they needed to get the inhaler that the asthma victim, helpless in the street can't get for themselves?

Throw them in jail! They broke the letter of the law!
alfanerd

That is entirely besides the point. I would not support the ridiculous application of the law which you are proposing. You're the one who would go further and who would not only enforce the letter of the law, but you would enforce its spirit.

Besides, there are infractions for which there is no defense, where the letter of the law is strictly followed, I believe they are called absolute infractions (or at least that would be a direct translation from French). They are drafted in a way which clearly identifies them as such, because usually there is at least always a defense.

anyways, beyond the airy-fairy claptrap about an agreeable society, in our society at least, we make laws, and thank freaking godlaws which prohibit activities cannot extend their reach as provided in the written statute. this is a very real embodiment of the notion of the rule of law, and it saves us from a tyranny where the subjective judgment of a bureaucrat trumps the clearly written will of an elected legislature.
http://dougsamu.wordpress.com dougrogers

I seem to have driven you to a completely incoherent defensive babble.
James Connors

Don't blame yourself.
alfanerd

never mind i guess this topic is above your pay grade.
http://dougsamu.wordpress.com dougrogers

Well, at my rates you must be one of those elites.
Not Stephen Colbert

Besides, there are infractions for which there is no defense, where the letter of the law is strictly followed, I believe they are called absolute infractions (or at least that would be a direct translation from French)

You appear to be thinking of strict liability and absolute liability offences. These are offences for which the Crown need not prove any fault element ("mens rea", which frequently but not always means intent), but rather only an act element ("actus reus"). Strict liability offences offer a due diligence defense, which absolute liability offences don't. I don't know if it's technically accurate to say that absolute liability infractions have no defense–I suspect, without being certain, that the defense of necessity (limited though it is) and other common law defenses would be available for absolute liability offences just as they for mens rea offences–though for practical purposes it's at least pretty close to true.

None of which has much of anything to do with the topic at hand. I just like being helpful on rare occasions.
Not Stephen Colbert

Also:

the clearly written will of an elected legislature

Man, you've never read any legislation, have you? "Clearly written" sure would be nice, but it just ain't so.

Jan

I know – if presenting fake invoices in order to receive a rebate isn't wrong – morally and legally – I give up.

tobyornotoby

The had the opportunity to refuse to go along with it after the ad buys were already made. That's why the invoices were faked.

TimesArrow

Is it known then how many were faked? Logically there would only be one or two, since that's the number of people who refused, no??

Loraine Lamontagne

If it were found that fake invoices were produced I don't think we'll talking about administrative issues any more.
alfanerd

it's telling of the ultra partisanship of AW's readers, that this incredibly stupid comment is a +2 (right now anyways).

If your intent is to do something illegal – which, cooking the books to go over your spending limit is – then, yes the intent matters.

Let's go over this doozy shall we?

if your intent is to cook the books to go over the spending limit and you did cook the books, then you did something illegal, and hence my point that if it's legal, intent doesnt matter, stands.

if your intent is to cook the books and you dont cook the books, then it really doesnt matter, because you didnt cook the books.

how can you people consider yourselves "liberal" yet want otherwise innocent people jailed because you subjectively project an evil intent on them? oh, …righ, political gain…

TJCook

And you seem willing to extend an unlimited benefit of doubt to the CPOC. Something tells you'd be less gracious if it were Michael Ignatieff putting on a brave face and calling something like this an "accounting dispute", with two Liberal senators facing potential jail time.

Accusations of "ultra partisanship" cut both ways.

alfanerd

im partisan, no question. but i generally oppose election spending limits anyways, and if Ignatieff had done this, I cant guarantee, but I hope that I would be objective in judging that situation.

also, i admit the CPC may have done something wrong. i just dont know what it is yet, as from what i can tell their in/out scheme did not substantially differ from other in/out schemes.

Jenn_

Well, let's look at the same sort of thing, just different players. Let's say I win the lottery tonight. I have lots of money I'd like to give to the Liberal Party. But legally, I can only give $1275 or whatever the limit is these days. So, I give some money to my hubby and my children so that they can give their legal limit to the Liberal Party for me. It is perfectly legal for me to give my money to my family. It is perfectly legal for my family to donate to the Liberal Party. Have I done anything wrong?

practical mom

If you just give the money and request that they donate it to the Liberals then I don't think you have done anything wrong. If you give the money and require that they donate it to the Liberals then I think you have done something wrong.

In the in and out scheme, the recipients of the money did not have real control over the money at any time. That's why it fails to look like candidate spending and looks exactly like party spending.
Jenn_

I think Elections Canada would have something to say about a "request", although here's a slightly different scenario that I do think would be okay. Let's say I win so much money I can afford to give each of my children $100,000. Let's say they are grateful. They want to do something for me, and know that I would appreciate a donation to the Liberal Party (which I would know about since I do their taxes) So, they donate some, maybe their limit, maybe just $100. Either way, I'm sure that would be fine. But in all cases, it comes down to intent. Did I give them money with the intention that the Liberal Party would get it? If so, I laundered my limit through them. If not, all is fine.
practical mom

Well, I meant request in the true sense of the word so that the candidates, or your family members, could receive the money and then spend it as they chose to without repercussion.

It seems clear that if the candidates did not agree to send the money back to pay for the media buys contracted by the party then they would not get the money. So in the in and out scheme it seems clear that the ad spending was required and not requested.

gottabesaid

I wouldn't say I'm neutral, but I do try to be halfway reasonable about things.

I think you've touched on what'll surely be the meat of the Conservatives' defence: the spending was local, it wasn't national. The national campaign put money towards the local campaign, then took the money back to buy the advertising. The prosecution is going to argue that the national campaign used the local campaigns to camouflage spending on the national campaign when the national campaign spending limit had been reached. Should be interesting.

alfanerd

so who's eating the apples?

gottabesaid

F**cked if I know. Sure am hungry, though. I could eat $500 worth of apples, I think.

chet

Wherry uncritically perrots his favoured position,

while the astute commenters above ask the right questions to reveal some very inconvenient facts that do not favour the scandal mongering leftists.

Meanwhile, our GDP improves, imployment increases, Canadians' lives get better, and the leftists are left chasing shadows once again.

Thwim

Feel free to perrot your favoured position on your blog.
Kathryn_C

What's your beef with Jules Perrot now? http://en.wikipedia.org/wiki/Jules_Perrot

Enough of your Taglionism.
gottabesaid

"…while the astute commenters above ask the right questions to reveal some very inconvenient facts that do not favour the scandal mongering leftists."

They have asked the right questions and contributed greatly to the conversation. What have you contributed?

gottabesaid

This posting is very helpful for a dummy like me. Many thanks!
AT1

Umm, so it's OK to transfer money back and forth….and it's OK to pool media expenses, but not both?

Yeah, the law is crystal clear! Which explains why the judge in the first court case was understandably confused about the obvious electoral fraud.
tobyornotoby

It's not okay to retrospectively pretend that expenses incurred by the national party were somehow a spending decision of constituencies that didn't raise the money, and didn't participate in the decision to spend it. If you were trying to understand, rather than hoping not to, you might get that.

To recap: Making an arrangement for joint spending (or fund raising) would be allowed, but faking it after the fact, isn't.
dave

No, what's not OK is to send money from one of the party levels to another with the express intention of making it look like one's not spending their own money.

So, transferring money from a candidate to the party to buy ads to "run locally" through their established media connections is ok, and transferring money from the party to a candidate to help them with their local campaign is ok.

But, transferring money from the party to the candidate and then telling the candidate to turn around and send it back to the party while claiming it as their own in an effort to get around the party's hard cap on election spending by attempting to hide the money under the candidate's own cap is not allowed.

In fact, the attempt to hide "ownership" of the cash would be the very definition of money laundering if not for the fact that the source of the money was otherwise legitimate.
Jan

AT! – that wasn['t the issue in the original case. In it, Elections Canada were refusing to issue the rebates and a couple of candidates sued to get them. The first court said that EC couldn't withhold them without determing that they were illegitimate. On appeal, the court said they could. Meanwhile the EC proceeded with questioning the legality of the whole scheme – with the result – charges have been laid against the organizers of it.
AT1

tobyornotoby, I fully admit that I might not understood the gravity of the charges.

However, you cannot claim that this was done 'after the fact', since the regional media buys apparently had the local candidates or riding association name on them. Elections Canada is saying that an ad promoting the national campaign is not eligible for local expenses because the national campaign wired money to the local association and they wired it right back.
TimesArrow

Then why the alleged fake invoices? [ how many so far?]

To say they had an opportunity to refuse while calling them turds and idiots and threatening to call in the heavy mob is a tad dissonant, no?
alfanerd

well, as for the alleged fake invoices, im not sure whats going on there, and that cant be good.

but as far as the whole scheme is concerned, other than fake invoices, what was illegal? I still dont know, and everybody here who pretends to know has been, so far anyways, completely wrong.

but why would they fake invoices then? I have no clue.

also, as far as calling them turds and idiots, that's bad form, but its not illegal, and some candidates did refuse to take part in the program, so something is off there too.
AT1

Yes, but the ruling also recognized that transfer of funds was a common occurrence and permissible.
Selena

I guess we know where the "con" in conservative comes from.
Kathryn_C

Transfer of funds from the Party centre who have heaps of cash to local candidate who does not is acceptable and understandable – all parties do this. Generally, the main party is going to be able to raise more funds than an unknown local.

Transfer from candidates to the main party (if they have not already overspent campaign limits) also okay within the guidelines – i.e. they must be shown to be contributing to the Party campaign on their own behalf. I believe there are technicalities with this which give us the identical slick ad running on all local tv stations with some tacked on bit at the end about the local candidate.

In-and-out neither of these, it is a scheme to get around spending limits imposed on all parties. It was used by the Harper Conservatives when they found themselves with fistfuls of cash and no way to legitimately spend it. Contrary to the talking point, it is not "done all the time" in fact the only other party who has done it was the Bloc in 2000; at that time, it was within the guidelines but when exposed as the scam it was, it eventually led to the tightening up of the rules. (http://en.wikipedia.org/wiki/In_and_Out_scandal).

So technically, it was within the letter of the law at the time, as the Conservatives have been arguing. But it was certainly outside the spirit of it as they would have been well aware by then and had it been known, it would have made quite a mockery of the "accountability" platform they were running on.

IMPORTANT NOTE:
Not only does in-and-out try to game the system against legitimate restraints on election spending by any one party. The individual candidates claim expenses *they did not incur* against their taxes and it was in order to get their unearned rebates that the Conservatives launched their suit against Elections Canada in the first place.

This is tax fraud and no government or political party should be defending it.
Kathryn_C

Also well covered by Kady O'Malley on The House this morning.
s_c_f

Well, now we know that this claim from the CEOC is a lie. http://www.canada.com/ottawacitizen/columnists/st…

The NDP did the exact same thing, but has not been investigated by the CEOC. The evidence is incontrovertible – an NDP email detailing the exact expenses and procedures of in-and-out (individual candidates claim expenses for costs incurred by the party), but this time it was the NDP.

I won't be holding my breath for Wherry to report this development.
Thwim

Transferring down to the local so they can buy an advert is fine.
Transferring up to the national so they can buy an advert is fine.
Doing both is the problem.. especially when you're claiming it was a "local" ad buy, but the invoices indicate it was anything but.

Lying to EC about the expenses is *always* wrong.