Thank you, Mr. Chair.
As you requested, I will now make a statement on the decision I made in the spring of last year in relation to transactions reported in the returns of a number of Conservative Party of Canada candidates in the 39th general election.
In doing so, it is important to note that this decision is currently the subject of a judicial review before the Federal Court. As well, the circumstances surrounding the regional media buy program are under investigation by the Commissioner of Canada Elections.
I will not interfere with either of these processes and intend to limit my remarks to circumstances that are in the public domain. I will give the committee a general overview of my decision in relation to the regional media buy program and the factors that led to it.
In 2005, the Conservative Party of Canada initiated what it termed a regional media buy program. Under this program, the party facilitated the purchase of radio and television advertising time from the agency Retail Media. These purchases were described by party officials as involving commitments or contributions from candidates who later claimed an expense in their returns. Sixty-seven campaigns reported advertising expenses in amounts up to $50,000 related to this regional media buy program. Seventeen returns of participating candidates were processed in accordance with the procedures that I just described to you a little earlier, that is in accordance with the usual verification procedures, and the expenses in question were reimbursed.
However, when we examined other returns, a statement by an official agent led Elections Canada to review the transactions related to the regional media buy program. When asked a routine question about the regional media buy expense reported in his candidate's return, that official agent replied that he thought the candidate had contributed to national television advertising. He added that, as it was impossible for the candidate to spend the limit, the party had asked him if he could contribute. This uncertainty on the part of an official agent about a significant expense—in this case, it represented 40% of the total election expenses of the candidate's campaign—raised a red flag. It prompted a review of all returns that included a regional media buy expense. The information arising from that review raised doubts as to whether the regional media buy expenses were those of the candidates.
In November 2006, my predecessor requested that each of the 11 campaigns whose returns had reached the final review stage provide additional supporting documentation for the regional media buy expense. On January 12, 2007, the same request was made of another three campaigns whose files had also reached the final review stage. These 14 requests were made pursuant to section 451(2.2) of the Canada Elections Act and sought additional information to establish that the claimed expenses were those of the campaigns that had claimed them. This included a request for a copy of any contract or other written agreement, a copy of the advertisement or script, documentation indicating the date of broadcast and the documents stating the date on which the official agent authorized the expenditure in accordance with his responsibility and obligation under the act. The candidates were invited to communicate with Elections Canada if they had any questions or needed clarification in relation to this request. Of course, the candidates concerned were also free to provide any other information that could serve to remove doubts as to the claimed expense.
From December 2006 to March 2007, there were numerous exchanges, both written and verbal, between officers of the Conservative Party of Canada and Elections Canada officials. The information provided on those occasions failed to dispel the doubts that had arisen. On April 5, 2007, after careful consideration of all of the information available to me at that point in time, I made the decision not to reimburse expenses relating to the regional media buy program. All other eligible expenses were reimbursed at that time. It was also decided to refer the circumstances surrounding the regional media buy issue to the Commissioner of Canada Elections.
On April 11, 2007, a meeting was held at the request of the Conservative Party of Canada. On that occasion, party officials reiterated their position on the regional media buy program. They also indicated that the candidates concerned would not be in a position to provide anything other than the material they had already provided.
In the course of that meeting, party officials were informed of the decision not to reimburse the regional media buy expenses and that the matter had been referred to the Commissioner of Canada Elections.
The committee should know that official agents and candidates who were identified as having participated in this program were also informed that the circumstances surrounding the regional media buy program were under review by the Commissioner of Canada Elections.
I also wrote the official agents and candidates whose expenses had not been reimbursed at that time to advise them of my decision to exclude the amount of claimed expense from the total of election expenses. Official agents and candidates were also informed that the decision to exclude this expense could be reassessed if they provided additional supporting documentation that satisfied me that the claimed expense was incurred by the campaign. No official agent or candidate provided any additional information.
I wish to return briefly to my decision not to certify the reimbursement of regional media buy expenses.
There was no single deciding factor leading to my decision. In fact, rather, it was an aggregate of factors that precluded me from being satisfied that this expense was an election expense warranting a reimbursement.
In addition to the statement by an official agent to which I have already referred, other statements were made by other official agents or candidates also disclosing a lack of detail and knowledge of the regional media buy expense.
The second factor was the absence of documentary evidence that would assist in establishing the existence of a contractual agreement by any of the participating candidates with the supplier retail media.
The third factor was representations of party officials that all arrangements for the purchase were made by the party and that invoices were sent to the party.
The fourth factor was particulars of the arrangements whereby invoices were provided to candidates by the party rather than by retail media as the supplier and the fact that moneys were transferred by Conservative Fund Canada, which maintained control of the money throughout the process by means of prearranged bank wire transfer instructions.
Finally, the fifth factor was the important and unexplained discrepancies in the amounts charged to various candidates for the same advertising, so the expense claimed by each candidate did not reflect the commercial value—which we discussed before—of the ad placement.
Having considered those factors, I would have decided to exclude those expenses for reimbursement.
I did consider other contextual elements that might have dispelled my doubts with regard to the nature of those expenses. These included the advertising in question and the fact that the party had spent close to the election expense limit in the 39th general election. With regard to the advertisements themselves, they were of no assistance in dispelling the doubts as to whether the regional buy expenses were those of the candidates.
It has been said that transactions of this kind are usual and engaged in by all registered parties and their candidates. I did ask Elections Canada staff to review the returns of all the major registered parties and their candidates in both the 38th and 39th general elections. Elections Canada has not identified any other transaction or group of transactions in which all of the factors I mentioned earlier were at play.
As was mentioned earlier, in order for the final instalment of the reimbursement to be made, I am required to certify to the Receiver General that I am satisfied a candidate and his or her official agent have complied with the requirements set out in the legislation. In a situation where an expense appears not to have been incurred by a candidate or where an expense has not been reported at commercial value, I cannot be satisfied the expense is reported in compliance with the act.
The same factors that led me to refuse reimbursement of the regional media buy expenses as being those of the candidates also led me to the referral of the matter to the Commissioner of Canada Elections. The commissioner's investigation is ongoing at this time, and given the arm's-length relationship that I seek to maintain with the commissioner, I am not in a position to answer questions that are within the scope of his investigation.
Members of this committee are also aware that the decision to exclude the regional media buy from the total election expenses eligible for reimbursement is the subject of a judicial review application brought before the Federal Court, and that was made on May 14, 2007. The position of Elections Canada has been stated in an affidavit filed before the Federal Court. It includes a full explanation of the circumstances and factors that led to the decision that is challenged.
In closing, I trust the earlier review of the political financing regime would have been useful to committee members. Similarly, my purpose in making this statement was to reiterate for the benefit of members of the committee the key factors involved in the regional media buy program.
I still have decisions to make in relation to this file. New information has emerged that is in the public record. In due course I will need to take all available information into consideration in making further decisions required to bring closure to this matter. Until such time, I intend to defer to the process currently under way with the Commissioner of Canada Elections and before the Federal Court.
Thank you, Mr. Chair.