For the 200 Liberal supporters who crowded into the basement of a downtown Hamilton union hall last week, it was a chance to preview party leader John Turner’s platform for the expected fall election campaign. In a 45-minute speech, Turner spelled out the issues that he predicted would dominate the race: free trade, the environment and integrity in government (page 30). But although Turner clearly wanted to keep to that agenda, increasingly he found himself diverted by questions about his personal conduct. The week began with Turner’s denying a Maclean’s report that he had used money raised during his 1984 Liberal leadership campaign for personal expenses. Then, he later refused to
comment on reports contained in a new book that his supporters used another trust fund to pay pro-Turner delegates at a 1986 party convention.
The repeated—and still largely unanswered—questions about Turner’s use of private funds focused renewed attention on the party’s financial affairs. Maclean’s has learned that the party’s chief financial officer, Michael Robinson, has asked party officials to ensure that no federal tax receipts have been issued for donations to private trust accounts outside the party’s control. If receipts have been issued, Robinson plans to ask that the donations be turned over to the party.
At the same time, Turner has taken an unusual step to alleviate his party’s debt,
THE OPPOSITION LEADER DENIED THAT THE FUNDS WERE USED FOR PERSONAL BENEFIT
which stands at more than $6 million. He has demanded written assurances from all Liberal riding associations and candidates that they will turn over to the national party half the money paid to them by Elections Canada as rebates for local campaign expenses. Candidates who refuse to comply with that arrangement will not be allowed to run for the party, the Liberal leader has vowed. Said Robinson: “There are some people who— because it is new or because they do not like the wording of it-—are saying that they have a problem with this procedure.”
Meanwhile, in a letter to Maclean’s last week, Turner denied any knowledge of a trust account set up for his benefit with money left over from his 1984 leadership campaign. “Neither I nor any member of my family have received a personal benefit from this or any other such arrangement,” he wrote. Still, in a subsequent news conference, Turner said that money “may or may not” have remained after his leadership race.
“I made it my business to stay away from those things,” he said, adding that any surplus that did exist would have been turned over to Ottawa accountant James Ross, a longtime friend of the Liberal leader.
Turner’s assertion that he never benefited personally from the trust was supported by Warren Chippindale, who chaired Turner’s fund-raising committee for the leadership race. All of the money spent during that period, he said in a letter to Maclean’s, was spent either directly on the campaign or “in planning and executing the transition to becoming Prime Minister.” But Chippindale did not retract his earlier statements to Maclean’s that the surplus after the 1984 con-
vention was nearly $300,000 and that the money was spent on unspecified transition costs that included “living expenses for Turner.”
Lloyd Posno, the chartered accountant who signed the cheques for expenditures during and after Turner’s 1984 leadership campaign, told Maclean’s last week that the leadership trust paid for some personal items for Turner and his wife, Geills. “I could not categorically say that we did not pay for anything that might be considered personal,” said Posno. “But where do you draw the line on what is reasonable? There definitely were a few articles of clothing, but it was peanuts, and everything was reviewed and determined to be legitimate.”
Posno said that both he and Chippindale sent money left over from the race to Ross, who held it in trust for the Liberal leader. Last week, The Toronto Star quoted Ross as saying that he closed the fund after Turner had spent all the money. Declared Ross: “I suppose it was all used up. It was raised by the Toronto friends of Mr. Turner for the transition period, so he could use the money any way he wanted.”
Late last week, a new book on Turner—Reign of Error by Ottawa Citizen reporter Greg Weston— criticized him for what its author describes as weak leadership and a free-spending lifestyle. Among other things, the book asserts that, in 1985, Turner asked Ross to donate $50,000 to the party from the Ottawa Fund, a Liberal trust fund under Ross’s control. That request, Weston writes, coincided with a decision by the party’s financial management committee to spend $50,000 on furniture for the Turner family at Stornoway, the opposition leader’s official Ottawa residence, on the condition that the furniture remain party property.
S Liberal officials discounted the 1 potential political impact of Wesx ton's book. But clearly, some Liberais were alarmed by revelations of previously secret funds outside the party’s control. Said Josip Gamulin, president of the Liberal riding association in Mississauga East: “When people give money anonymously, sooner or later they are going to knock on your door looking for a favor in return.”
For his part, Robinson said that he did not object to the creation of private Liberal trusts—provided that donors to those funds do not receive tax credits. But to many Liberals, the controversy was yet another unwelcome distraction at a time when the party desperately needs to devote its attention to a possible election call.
ROSS LAVER and BRUCE WALLACE in Ottawa with MARY JANIGAN and PAUL KAIHLA in Toronto
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