OTTAWA - Conservative candidates and their official agents knew next to nothing about election advertising that their campaigns had helped pay for, Elections Canada discovered during its probe of the party's in-and-out financing scheme.
They scratched their heads trying to recall details of the ad-buying arrangement orchestrated by the party's headquarters. Several simply remember Conservative officials telling them money would land in their accounts, cash that must be swiftly returned to Ottawa.
Others, like agent Barbro Soderberg, expressed doubts about the plan to deposit funds into local campaign coffers and almost immediately transfer it back to the Conservative party.
"As a bookkeeper I know that sometimes you have to use creative accounting between two small companies," she told Elections Canada last September, "but I found this move was being a little too creative."
Documents officially released Monday list several cabinet ministers whose ridings received ad money from Conservative headquarters during the last election with strict instructions to swiftly send the money back to the party. They include Foreign Affairs Minister Maxime Bernier, Communications Minister Josee Verner, Public Safety Minister Stockwell Day and Transport Minister Lawrence Cannon.
Long before the RCMP and elections officials descended on Conservative party headquarters last week, the elections agency had turned over numerous stones in search of revealing e-mails, statements and invoices that would help explain whether the Tories broke the rules in the last election campaign.
The material gathered through interviews and a court-approved order, which obliged ad-buying firm Retail Media to turn over a sheaf of documents, provided the basis of Elections Canada's application for the search warrant that opened the door to Tory headquarters.
The search warrant contains allegations that have not been proven in court, and the Conservative party denies it violated the elections law.
An affidavit signed by Elections Canada investigator Robert Lamothe alleges that Conservative advertising transactions - known as the "in and out" scheme - allowed the party "to spend more than $1 million over and above" its legal campaign limit of $18 million.
The document maintains that the Conservative Fund Canada, the party's official agent, filed financial returns "that it knew or ought reasonably to have known contained a materially false or misleading statement."
The Liberals and NDP say the extra cash may have tilted the electoral balance in favour of the Tories, securing a minority government for Stephen Harper in the January 2006 ballot.
Tory House Leader Peter Van Loan said Monday said he saw "almost nothing new" in the warrant documents that the Conservatives haven't already provided to Elections Canada as part of a lawsuit the party has launched.
"I certainly didn't see anything that would justify a search of the type we saw last week," he said in an interview.
During the election campaign, the party shifted money from its national office into - then quickly out of - 67 local ridings in a way that allegedly obscured the extent of its national ad spending.
The movement of national advertising money between party headquarters and local candidates was "entirely under the control of and at the direction of officials of the Conservative Fund Canada and-or the Conservative Party of Canada," says the affidavit.
Elections Canada investigators conducted interviews with 15 of the candidates and-or their official agents. They tried to speak with others, but some 16 people declined to be interviewed, saying they had been advised by Conservative counsel they should not speak without party lawyers present.
Investigators also spoke with Retail Media executives, including chief operating officer Marilyn Dixon, who speculated one invoice filed with Elections Canada "must have been altered or created by someone, because it did not conform to the appearance of the invoices sent by Retail Media to the Conservative Party of Canada with respect to the media buy."
Perry McDonald, official agent for Tory candidate Garreth McDonald in Winnipeg-North, remembered "signing on to something to do with a local radio station" - a deal possibly arranged by a Conservative party organizer.
"Mr. McDonald was not aware of and could not recall receiving any invoice or invoices, from either Retail Media or the Conservative Fund Canada."
McDonald did remember "a wash in and out of our account. I do seem to recall an entry of $6,500 and then it was taken out again."
David Pallett, agent for candidate Dan Mailer in the Ontario riding of London-Fanshawe, remembers orally authorizing someone from party headquarters to transfer funds for advertising into the local account.
He told investigators he assumed the transfer was legal since it originated with the party.
Pallett did not enter into a contract with a media company, nor did he provide written authorization to anyone to incur costs on behalf of the campaign, the affidavit says. "He is not familiar with the company Retail Media."
Douglas Lowry, agent for Sam Goldstein, the Tory candidate in Toronto's Trinity-Spadina riding, was advised of the party's desire to deposit about $50,000 into the local account.
"There was no discussion pertaining to the advertising or its benefit to the Goldstein campaign," the affidavit says. "Mr. Lowry was simply instructed to post the funds as an advertising expense, and he did so."
Goldstein would neither confirm nor deny his involvement in the media funding program.
"Mr. Goldstein also indicated that he would not respond to our questions in writing," the affidavit adds.
Van Loan shrugged off the fact that some Conservative candidates and their official agents made damning comments about the scheme. He said official agents are all volunteers who typically aren't well-versed in complicated election law.
Van Loan argued that what the Tories did is no different from the practices employed by other parties to ensure their national message is promoted at the local level. For instance, he said, the Liberals require candidates to pay for and use brochures developed by the national campaign.
"The unequal treatment is not justified."
Steve Halicki, the Conservative candidate in York South-Weston, said he doesn't believe the party did anything wrong despite the reservations of Soderbergh, his own official agent, who worried the scheme was "a little too creative."
Halicki said he doesn't know what ads his campaign helped pay for but he's sure they were beneficial to him. He said anything that promotes the party's leader and policies helps local candidates and the party should get credit for more accurately reflecting that fact in its accounting.
"Local candidates have been freeloading on national budgets, getting free coverage and free media stuff without having to belly up to the bar as they say. What they did in this case was actually ask candidates to belly up to the bar," he said in an interview.
"I benefited immensely from the national stuff and it was only fair that I should ... be responsible for a portion of the expenses."
The Conservatives filed a civil lawsuit last year challenging Elections Canada's interpretation of campaign law. Senior Tories, including Harper, have questioned the motives for last week's raid, suggesting the elections agency may have been trying to do an end-run around the suit.
The Tories held an invitation-only briefing Sunday for select reporters, to whom they gave advance copies of the affidavit filed in support of the search warrant. Other reporters were reduced to chasing Tory officials down hotel hallways and staircases.
Van Loan called the select briefing "a positive step in transparency."
