OTTAWA (CP) - The Conservative party may have illegally accepted millions in unreported donations last year because it didn't understand political financing laws.
That's the startling conclusion drawn from testimony given to a Senate committee by the Harper administration's point man on cleaning up government. Treasury Board President John Baird told the committee late Tuesday that his party did not consider fees paid to attend the party's March 2005 policy convention to be political contributions.
However, Elections Canada spokeswoman Valerie Hache says the law stipulates that convention fees do constitute a donation "to the extent that the person paying the fee is not receiving a good or service that has any commercial value beyond its political value."
However, any portion of a convention fee that covers lodging, meals or travel does not count as a contribution, she told The Canadian Press earlier this month.
Paul Lepsoe, legal counsel for the Conservative party, adamantly disputed that interpretation of the law. He said there is no such stipulation in "the Elections Act or the Income Tax Act or any other federal statute that I'm aware of."
He maintained that the party has "fully complied" with the law.
Furthermore, a spokesman for Baird said Elections Canada audited and approved the party's convention books.
The Tories' 2005 convention was attended by about 2,900 party members, who paid a regular fee of $600 each, although discounts were available to some. That means the party stood to rake in as much as $1.7 million, all or some of which should have been reported to Elections Canada as donations.
Baird admitted to the Senate committee on Tuesday that did not happen.
"Some political parties take their delegate fees to a convention as being a donation. My party at the last convention did not," he told the Senate's legal and constitutional affairs committee.
Indeed, registration forms for the convention show that the party even charged a $750 fee to professional groups and outside associations, generally lobbyists, who sent representatives to observe the convention.
For such fees, the registration form also noted that payment could be made using corporate credit cards and corporate cheques.
But Steven MacKinnon, national director of the Liberal party, said his legal advice is that such fees constitute an illegal corporate donation.
Political parties were banned from accepting corporate donations in 2004, when a number of financing reforms were introduced - including the provision on delegate fees.
MacKinnon said the Liberal party will file a complaint with the country's elections commissioner about the Tories' handling of convention fees.
"This is millions and millions of dollars potentially in illegal contributions," he said. "(Baird) is admitting that his party broke the law."
MacKinnon doubted that Elections Canada would have approved the Tories' convention books, saying the agency looks at party finances only once a year and "doesn't bless" individual events. The parties' final reports for 2005 have not yet been submitted to Elections Canada.
Elections Canada had no immediate comment.
The Tories' convention registration form noted that "some portion" of the delegate fee "may constitute a contribution" and thus be eligible for a tax receipt.
Toery lawyer Lepsoe said receipts would have been issued only if the convention had made a profit, which it didn't. He said delegate fees covered the actual costs of staging the convention and, therefore, did not constitute donations.
"This is the way it's been since time immemorial," he said, citing Section 408 of the Elections Act, which governs fundraising events.
Baird was appearing befofre the Senate committee to defend the proposed Federal Accountability Act which, among other things, would reduce the ceiling on personal political donations to $1,000 from $5,400.
Liberals have complained that if the act goes into force by the fall, as the government hopes, it would prohibit anyone who has donated more than $5 this year to the Liberals from paying the $995 fee to attend the party's leadership convention in December.
But Baird said he didn't know until recently that this was even an issue. And at various points in his testimony, he suggested it's optional for parties to decide whether to declare convention fees as donations, for which tax receipts would have to be issued.
"In the last number of months, I was putting the paper together to do my own income taxes and I did not get a tax receipt for our (Montreal) convention . . . . It was never raised by anyone in the drafting of the bill, as far as a delegate fee goes," he said.
"In my federal political party, you do not get a tax receipt. It is not counted as a donation," he said at another point. "In my provincial party, you do."
