The bucks start here
Behind every great leader is an equally great bagman
John Godfrey is a senator, appointed to the upper chamber in 1973 by a grateful Prime Minister Pierre Trudeau. He is a senator because he is a good bagman; he has raised money, lots of money, for the Liberal party’s election campaigns. Now, as a new campaign unfolds, Godfrey will be doing what he does best for the Liberals—prowling the corporate sanctuaries of
Toronto’s Bay Street eliciting donations to the cause.
Godfrey is a leading player in a private, ritualistic and utterly essential drama that takes place behind the scenes of every election campaign—the restrained, formalized hustle for the funds required to bring the party’s message to as many voters as possible before election day. The men in-
volved in this activity are virtually unknown outside political circles, yet their efforts count for more than perhaps anyone else’s—with the exception of their party leaders—in the eventual outcome of the election. Fund raisers are typically a mysterious breed, furtive in their behavior and tight-lipped in their conversation. Their undercover style of operation has
A great time to be a New Democrat
With its limitations on the size of political donations and its insistence that donors of more than $100 be identified, the 1974 Election Expenses Act is the bane of Liberal and Tory bagmen. But it’s one of the best things that ever happened to the New Democratic Party. The act provides tax credits to encourage individual—as opposed to corporate—donations to political parties. As the NDP has always relied heavily on the support of individuals, it suddenly found itself for the first time on the same financial footing as the Liberals and Conservatives. The following breakdown of the amounts raised from the act’s introduction up to the end of 1976 was compiled by Maclean ’s from figuressubmitted to the Chief Electoral Officer.
Party From individuals Liberals 52% Conservatives 44% NDP 71%
earned them their less than flattering nickname; they’re commonly known as bagmen, though the term isn’t meant to be as disparaging as the dictionary definition, which encompasses the collection or distribution of “illicitly gained” money.
Godfrey, 65, a successful Bay Street lawyer before going to his reward in the Senate is a refreshing exception to the type. H< cannot stand secrecy and laughs at a predecessor who used to make his calls from airport telephone booths and whisper: “I can’t tell you where I am, but it’s the biggest city in the biggest province.” Then there’s Patrick Vernon, Godfrey’s current counterpart in the Conservative party, also a Bay Street lawyer. Vernon, 51, refuses to be photographed and, while he will agree to be interviewed, makes a point of meet-
ing reporters on neutral ground, away from his own office. Vernon is even twitchy in the company of other bagmen. Once, after a meeting with Godfrey, the Liberal bagman suggested they have lunch together at the ultra-stuffy Toronto Club. Vernon declined; he said they should not be seen together.
There are dozens of other bagmen at work in this tight, private little world, out of the public’s eye. During this election campaign, Godfrey will be helped by Senators Maurice Riel of Montreal and Harry Hays of Calgary plus Joe Cruden, a Bell Canada executive, and Doug Thomas, a Toronto financier, among others. Vernon will be assisted by Guy Charbonneau, a Montreal insurance executive, and Roy Deyell, a Calgary lawyer, as well as up to 200 junior bagmen in Toronto. The New Democrats do not make much effort to attract corporate donations, of course, but they do canvass the unions. The man chiefly responsible is the party’s treasurer, Gordon Brigden, staff representative for United Steelworkers.
The NDP has always relied on individual contributions to a much greater extent than the Liberals or Conservatives and has therefore benefited more from the Election Expenses Act passed in 1974. providing tax relief for individual donations and requiring public disclosure of all donations over $100. The NDP’S newly fattened coffers (chart p.44b)will allow it tospendin excess of $1 million at the national level in this campaign, compared to just $353,852 in 1974.* The Liberals and Conservatives will spend more, much more, probably close to the ceiling of $4.3 million imposed by the new act. The government even tried to raise the ceiling to $5 million but the other parties were not sympathetic. (The Liberals spent about $4 million at the national level in 1974, which translates with inflation to about $5.5 million now. The Tories spent $2.8 million in 1974.)
Now it’s up to the fund raisers to see that the money is there for the campaign. This will be Godfrey’s fourth federal election as a Liberal bagman. He was expected to retire from the field after the last election in 1974, but he raised an astounding $ 1.5 million on his own from 90-odd firms and was deemed too valuable to let go. Besides, he says, “1 despise people who get appointed to the Senate and then just quit. I want to do my duty.”
His duty is to the Liberal party. For this election his canvass has been pared to just 35 firms but they are traditionally the party’s biggest donors and he will be asking them to contribute $50,000 each.** The
* AIthough the political parties were not required to file financial statements in past elections. Khayyam Z. Paltiel. professor of political science at Ottawa's Carleton University, has conducted a study of spending in the 1974 campaign. The figures used are his.
**Major donors to the two main parties since 1974. in alphabetical order: Alberta Gas Trunk. Aluminum Company of Canada. Algoma Steel, Bank of Montreal. Bank of Nova Scotia. Canadian Imperial Bank of Commerce. Canadian International Paper. Denison Mines. Do-
minion Foundries and Steel. Ford. Gulf Oil. Hawker Siddelev. International Nickel Company. Noranda Mines. Northern Telecom, Royal Bank. Steel Company of Canada, Toronto Dominion Bank.
pitch will come over drinks at the club, in the executive suite or even over the telephone. Godfrey’s approach will be simple and direct: You don’t have to like Trudeau and the Liberals, but in the interest of democracy and free enterprise you should support them. He will suggest a donation of $2,000 for every $1 million the firm makes in profits. Few will turn him down.
How did Godfrey, Vernon and the others become bagmen? “Nobody joins a party to be a fund raiser,” says the Liberals’ Joe Cruden. Nor are the bagmen chosen by their peers in a democratic vote at a party convention. Rather, the mantle is quietly passed from one to the next with a nod from the party leader. Godfrey was tabbed by his predecessor, John Aird, in 1968. His credentials were that he had done some fund raising for the provincial Liberals, he had good contacts on Bay Street from his law practice and he liked Trudeau, who had just been elected Liberal leader. There were no press releases about Godfrey’s appointment, no stories in the daily press. Such recognition is reserved for the politicians, not the bagmen, who are usually referred to in public, if at all, in pejorative terms. But they quietly go about their work with the conviction that “somebody has to do it” and with visions of Senate
appointments dancing in their heads.
Their politics are generally to the right of their own parties’, as befits someone dealing with money. But, when they are asking for money, they try to avoid mentioning politics except in the broadest terms. “Don’t talk politics,” an instruction sheet for Liberal bagmen advises bluntly.
“Leave it to the politicians. Introduce yourself properly and explain why you are canvassing. Discuss free enterprise, etc. Corporations should accept responsibilities the same as citizens. Shareholders, best interests are being furthered by supporting free enterprise.”
The bagmen do, however, serve as a conduit of business opinion back to their parties. During the 1974 election, for example, when things were going badly for the Conservatives, Robert Stanfield met with his party’s bagmen in Toronto. He came under attack for everything from his advocacy of wage-price controls (a “socialist” policy, said one bagman) to his failure to come out against the capital gains tax. For Stanfield, it was a tougher session than any press conference he endured during the campaign.
Fund raising used to be done by the political leaders themselves. That was until the campaign of 1872, when Prime Minister John A. Macdonald sent an urgent plea for money to the Canadian Pacific Railway Company which was seeking the federal charter to build the first transcontinental railroad. “I must have another $10,000,” telegrammed Macdonald. “Draw on me,” replied CPR executive John J. C. Abbott. The correspondence, which came to light after the election, caused an uproar that all but destroyed both Macdonald and the CPR, although both later recovered.
Today, the leaders keep their distance from fund raising, leaving the job to bagmen with no questions asked. Theoretically, at least until the recent public disclosure of all donations over $100, the leaders did not know who gave to the party or how much and, therefore, could not dispense favors accordingly. But such large sums—sometimes in excess of $100,000— are involved that the odor of something being bought still lingers. It is an accusation that the bagmen vehemently deny.
“When I was in charge of raising money in Ontario for the 1968 federal election,” says Godfrey, “all canvassers were instructed to approach prospective donors on the basis that giving a donation was merely being a good corporate citizen, and there was nothing in it for anyone, that they were merely supporting the democratic process and that they should give equally to the party in power and the official opposition.
“I was well aware that it had been traditional for corporate contributors to give 60 per cent to the party in power and 40 per cent to the official opposition ... It always seemed to me completely illogical, if a contribution was made by a public company on a non-partisan basis, that the party in power should receive more than the official opposition. To me, such a practice might logically suggest, particularly to the cynical, that the donor was looking for something for his money, and that was why he was giving more to the party in power.”
Godfrey thinks some veteran politicians thought he was out of his mind when he started telling donors that they should give equally to both the party in power and the official opposition. “All I can say is that the
results speak for themselves. I quickly found that corporate donors were very receptive to that type of approach, and by putting the request for funds on a high moral plane I am sure we were far more successful in getting corporations to raise their donations than if we had even vaguely hinted that there might be some undefined advantage in their giving.”
It is extremely rare, he says, to encounter a donor who expects a direct return for his contribution. “Since I became involved in 1968, I can only recall four instances in which a prospective donor stated that what he might give would be influenced by some action, legislative or otherwise, which he wanted the government to take. I can recall how startled these gentlemen were when I told them forcefully and in no uncertain terms that the Liberal party was not for sale, the government was not for sale, and that was not the basis upon which the Liberal party raised or accepted money.”
That’s not to say Godfrey doesn’t get complaints from donors, particularly about pending legislation. “And occasionally I have passed on the views of the business community to the appropriate minister,” he says. “There is the president of one large corporation who, when I call him every year for their donation, gives the Liberal party and the government a fiveminute tongue-lashing, which has now become traditional. When I tell him that, for the kind of money his company donates, he can, as far as I am concerned, call the Liberal party and the government anything he wants, he simply laughs and cheerfully sends in their usual contribution.”
The Election Expenses Act, which came
into effect just after the 1974 election, was supposed to shift the focus of fund raising from corporations and unions to individuals. Tax credits of $75 were offered on donations of $100, and public disclosure was required for all contributions over $100. Both political parties and candidates were also to be partially reimbursed from the public purse for their expenses. But the new act did not, as in the United States, ban corporate and union donations, and the Liberals and Conservatives have found they cannot be easily weaned from their traditional corporate donors.
They have tried. The Conservatives, for example, have experimented with massive direct-mail campaigns, sending out as many as 600,000 letters at a time in their appeals for money. But the results have been less than spectacular. The Liberals have asked their MPS to put the arm on their constituents for money, but have met with only middling success outside Quebec. “Some MPS just will not accept the responsibility of raising money for the party,” laments Godfrey.
Both parties have been raising money since the 1974 election and had collected more than $7 million each by the end of 1976. But most of that money has been eaten up in operating expenses or been plowed back to the ridings where it was raised. Moreover, the Conservatives had to pay off a debt of close to $1 million left over from the 1972 and 1974 campaigns. The Liberals came out of those two campaigns with a surplus of close to $ 1 million and are in much better shape financially.
Still, both parties must raise over $3 million for their national campaigns and are counting on their traditional corporate supporters to supply most of it, as they have in the past. But public disclosure of donations has clearly scared off some corporations. They are not just concerned with the bad publicity that often accompanies such disclosures; that, in fact, has been minimal. But disclosure also tells fund raisers in other fields who is giving and how much is being given and leaves some corporations open to a multiplicity of demands for money. Thus, Southam Press found it was being approached for money by provincial parties, although it had only given to federal parties in the past. The board of directors looked at the request and then decided to stop all political donations, federal or provincial. Says Southam President Gordon Fisher: “I guess what we decided was that the world is changing ... and we’d better change, too.”
Sentiments like that annoy the bagmen. But they find even more infuriating the attitude of American-owned companies that have stopped contributing in Canada because such donations are illegal in the United States. The list of such companies is long and includes giants like Imperial Oil. General Motors, and IBM. Godfrey and his Tory counterpart, Pat Vernon, actually paid a joint visit to GM in an effort to change the company’s mind, but to no avail. Grumbles Godfrey: “They’re just importing their own laws into Canada.”
A further constraint on the bagmen has been imposed by Trudeau. He has established an annual ceiling on corporate donations of $25,000 or $50,000 in election year. Explains Trudeau: “We don’t want to be indebted to any small number of large corporations.” The ceiling, in effect, applies to the Conservatives as well, because few companies will give more to one party than the other. While a ceiling of $25,000 a year can add up to $ 100.000 over a four-year period, the self-imposed restraint has put a crimp in the style of the bagmen, who are used to receiving that much or more in one lump during an election campaign.
The new Election Expenses Act has taken some of the pressure off the bagmen by putting a ceiling on expenditures ($4.3 million for the national campaigns plus about $27.000 on average for individual riding campaigns). But with the new restrictions on fund raising, as well as spending, the bagmen may have trouble reaching even that ceiling. Godfrey, for one, professes little concern. “I am convinced,” he says, “that had the Liberal party as a whole, including candidates, spent $1.5 million less or $3 million more in the last election, it would not have affected the outcome in any single riding.” That, however, is not the attitude of party campaign managers who, as election day approaches, depend ever more heavily on the John Godfreys, Patrick Vernons and Gordon Brigdens of this world. Q