Canada

THE $70,000 QUESTION

John Geddes March 5 2001
Canada

THE $70,000 QUESTION

John Geddes March 5 2001

THE $70,000 QUESTION

Canada

John Geddes

Ezra Levant, Stockwell Days new communications director, sums up what has made life miserable for the Canadian Alliance leader lately in two bland words: “clerical error.” But if that’s all that lies behind the uproar over a $70,000 donation to the Alliance, it might be the biggest political controversy ever sparked by a simple mix-up in paperwork. At issue is the appearance that the generous contribution was made by Bennett Jones LLP, a big Calgary law firm, just before the firm collected more than $300,000 for representing Day in a highprofile lawsuit settled in mid-December. The problem for Day is that those hefty legal fees were paid by the Alberta government—or, as the Alliance leader’s tormentors prefer to put it, the Alberta taxpayer—because

A controversial donation to the Canadian Alliance party leaves Stockwell Day twisting in the wind

Day had been sued over a letter he wrote when he was still a provincial Tory cabinet minister in Premier Ralph Klein’s government.

Any suggestion of an improper link between the big taxpayer-funded payday for Bennett Jones and the large contribution to the Alliance was strongly denied. Both the firm and the party said the donation did not even come from Bennett Jones. They said the real benefactor was a senior partner at the firm, William Britton, who had not worked on the Day defamation lawsuit. Just who was giving the money was in doubt, at least partly because the contribution came in the form of a Bennett Jones trust account cheque on which Britton’s name does not appear. As a result, the Alliance sent a receipt to the firm, not the man. “The receipt went out to Bennett Jones on Jan. 19, which looked kosher, because the cheque said Bennett Jones on it,” explained Levant. “But then

Bennett Jones got the receipt and said, ‘Hang on, it wasn’t our money, it was Bill Britton’s money.’ ” With the “clerical error” caught, according to Levant, all that was left to do was to make sure a second receipt could be issued to Britton without violating any federal party-financing rules.

If only, Day’s supporters must be wishing, it were really that simple. In reality, the situation seems far murkier—and potentially more damaging politically. Day’s own discomfort was all too evident last week when he pleaded with journalists not to ask any more questions on the issue through a tense news conference on Parliament Hill. And in fact the party’s national council, far from dealing with the matter as one that could be fixed by merely writing a new receipt, held an emergency conference call to discuss the question and then assigned a four-person panel to look into it further. By the end of last week, the party had still not issued a replacement receipt to Britton, even though Bennett Jones asked for one on Feb. 5. Evidently, the notion that it was nothing more serious than an error was not being accepted—at least, not without more investigation—by the party’s senior ranks.

In fact, top Alliance officials told Macleans there were fears inside the party that the big contribution would turn into a problem long before the story broke on CBC Newsworld on Feb. 16. Ken Kalopsis, copresident of the Alliance, said in an interview that the party’s executive director, Glenn McMurray, first saw the potential for embarrassment—or worse—soon after the Alberta government bowed to public pressure and on Jan. 16 released a detailed cost breakdown of the Day lawsuit settlement. Just two days later, McMurray issued the receipt to Bennett Jones for the $70,000, one of the richest donations the ë

party had ever received. That contribution would eventually have to be made public, since federal law requires parties to disclose every June the sources and amounts of all contributions over $200 from the previous year. McMurray was worried about how the conspicuous Bennett Jones donation would be viewed in light of the big legal fees the firm was now known to have raked in for handling Days lawsuit.

Still, Kalopsis stressed that McMurray never suspected actual wrongdoing—he just recognized the likelihood of horrible optics. “The Canadian Alliance is a political party, so a perception can sometimes become a problem,” Kalopsis said. “Glenn saw that and thought that there might be a concern.” McMurray relayed his fears to Day’s office in Ottawa and to a senior partner at Bennett Jones—Bruce McDonald, who also happens to be one of Day’s top fund-raisers and co-chairman of the Canadian Alliance Fund. It was McDonald who, in a Feb. 5 letter to McMurray, tried to straighten things out by explaining that Bennett Jones was returning the original receipt and asking for a new one to be sent to Britton, whom he now identified as the original source of the money.

Some clerical error. One member of the Alliance’s national council, who asked not to be named, said the party’s big concern now is to make sure there is no potential for this issue to resurface later in the form of an investigation by Elections Canada, which oversees federal political financing rules. The council wants airtight assurances, preferably backed up by documents, that it was Britton, not the firm, who was making the donation from the outset, and with his own money, not on behalf of anybody else. The Canada Elections Act clearly forbids anyone from acting as a front for an anonymous party supporter or trying to disguise a contribution’s true source. “No person or entity shall make a contribution to a registered party that comes from money, property or the services of another person or entity,” the elections act states.

Another complicating factor is what

Canada

appears to be the unusual use of a Bennett Jones trust account to make the contribution. According to Alberta’s law society, which is looking into the case, such trust accounts are generally to be used only to hold money belonging to the firm’s clients. But Bennett Jones managing partner Bill Rice said in an interview there is no doubt in this instance about whose funds the cheque drew on: “It was Mr. Brittons money.”

But it is Day’s headache now. Even if it amounts to nothing more, last week’s furor was a prolonged reminder of the original lawsuit against him and the fact that the Alberta government had to spend $792,064 to settle it. That case both raised doubts about Day’s judgment (he was sued over a letter he wrote to a Red Deer newspaper criticizing a local lawyer for the way he defended a pedophile charged with possession of child pornography), and dented his credibility as a champion of the taxpayer, since he allowed the provincial government to foot his legal bill. And the timing of the latest controversy demoralized many Alliance MPs. Their leader was put on the defensive just when Progressive Conservative Leader Joe Clark was turning up the heat on Jean Chrétien over the Prime Minister’s lobbying of the federal Business Development Bank for a loan to the Auberge GrandMère, a hotel in his home riding of St-Maurice, Que., owned by a friend, Yvon Duhaime. While Clark took a turn as the star attraction of Question Period—to the point of being dubbed the leader of the unofficial opposition—Day was hardly in a position to take his own shots at Chrétiens ethics. Instead, the official Opposition leader was left doggedly trying to attract attention to his claims that Liberals are not doing enough to fend off an economic slowdown.

Levant, a former editorial board member at the National Post who had just begun working as Day’s chief messagemanager when the contribution controversy erupted, insists his new boss is content to stick to economic policy. “Ten thousand jobs cut at Nortel means a lot more to Canadians than some inside-Parliament intrigues,” he said. “The issue of 2001 is going to be the economy.” The question now is whether Day can convincingly mount an offensive on what he is clearly trying to stake out as his Big Issue, recession prevention—and in the process make his shaken Canadian Alliance party forget that he has spent most of his time since last fall’s election on the defensive. EH

An improbable time for a rapprochement

Joe Clark is the most impassioned figure on the floor of the House these days. Stockwell Day has been knocked back on his heels by controversy over a contribution to his party. Is this the moment for Clarks Conservatives to start looking seriously at a rapprochement with Day’s Canadian Alliance? Strange though the timing might seem, that is exactly what rank-and-file Tories are being asked to consider by their party’s brass. Tory national director Susan Elliott says that over the next three months, PC riding associations across Canada will be asked to hold meetings to debate various options for co-operating with their estranged conservative cousins—from working with the

Alliance in Parliament, to holding a joint policy conference. “We’ve had a tendency to fall into a pattern of saying we can do nothing or we can merge,” she told Macleans. “But the reality is there are dozens of options between those two extremes.”

Still, Elliott admitted the party is asking its members to consider ways of edging closer to the Alliance just as many Tories are saying: “Who needs ’em.” Clark has rallied his caucus with his inyour-face attacks on Prime Minister Jean Chrétien over federal money that flowed to the Prime Minister’s riding—even though last week the RCMP said there is no basis for a criminal investigation and the federal ethics counsellor ruled earlier that Chrétien had broken no rules. Day, in sharp contrast, is looking wounded affer a disastrous news conference last week in which he indignantly insisted

that reporters should stop asking him about a contentious $70,000 donation to his party. But, Elliott noted: “That’s just a snapshot of where we are now, and in politics things change. I think our members will be able to look beyond today and see the long-term picture.”

In other words, despite the favourable attention their leader has been getting recently, Conservatives remain all too aware that Clark’s caucus numbers only 12—the bare minimum of MPs needed for official status in the House. And Day, despite looking beleaguered, still leads an official Opposition with 66 MPs.

So while the Alliance leader may not look like an attractive ally these days, Tories who see political strength in numbers might still decide it is time to start closing the divide on the right.

J-G.