MPs condemn Tory minister Penashue’s campaign spending

‘The election was bought,’ interim Liberal Leader Bob Rae says

By Laura Payton, CBC News
Posted: Oct 17, 2012 6:35 AM NT
Last Updated: Oct 17, 2012 6:01 PM NT

New records obtained by CBC News are raising more questions about the election spending of Intergovernmental Affairs Minister Peter Penashue.

Documents in Penashue’s Elections Canada file show he and his campaign spent $24,711 in flights during the 2011 election campaign, but an airline in his Labrador riding wrote off most of that amount under an agreement that appears to have been made months after the election was over.

The cost of the flights that were written off would have put Penashue well over his spending limit. CBC News has previously reported that Penashue’s campaign spending records show he was already nearly $4,000 over his limit.

It also appears Penashue still owes $15,000 plus interest on a loan provided by Innu Development Limited Partnership, a company run by two Innu communities to develop business partnerships. Penashue’s brother-in-law, Paul Rich, was the CEO of IDLP before he stepped down after the community expressed outrage that Rich made more than $1 million in salary over two years.

Candidate travel isn’t subject to spending limits under Canadian election laws, but the travel expenses of a candidate’s family, staff and volunteers are. That means the airline invoiced Penashue for $18,163 of travel that falls under campaign expense limits.

A calculation by CBC News of the travel expense invoices, the previous overspending and a portion of a flat rate charged by the airline for travel shows that Penashue’s campaign overspent its limit by $17,469.06, or about 21 per cent.

‘Ridiculous giveaway’

A spokesman for Penashue, who won the Labrador riding by 79 votes, says they’re working with Elections Canada to make any changes needed.

“We have taken steps to appoint a new official agent to work with Elections Canada to help correct any mistakes that were made by the inexperienced campaign volunteer,” Cory Hann said in an email Tuesday.

Reginald Bowers, the “inexperienced campaign volunteer” Hann referred to, was appointed last December by the Conservative government to sit on the board of the Canada-Newfoundland Offshore Petroleum Board.

On Wednesday, Hann released an emailed statement from Penashue that avoided calling Bowers inexperienced.

“We have appointed a new official agent who is working with Elections Canada to help correct any mistakes that were made by the previous Official Agent. I am proud to serve as the Member of Parliament for Labrador,” Penashue’s statement said.

Interim Liberal Leader Bob Rae called the flat rate a “ridiculous giveaway” and says if it’s true, Penashue must resign his seat.

“I’m saying the election was bought. Yes, no question,” Rae said Wednesday.

The overspending gave Penashue access to constituents living in remote communities that are otherwise hard to reach, Rae said.

“You simply have to look at the size of Labrador and understand if you’re able to travel throughout the entire region of Labrador for $7,000, which is a ridiculous giveaway, you’ve got an enormous advantage over anybody else. Enormous.”

“He won by [79] votes. At some point you say the overspending was so abusive. Particularly when we know for example even in terms of the aircraft contract that similar contracts were not offered to any other candidate, so you have a situation clearly in which a company is giving an entirely unfair advantage to one candidate. It’s just not on,” Rae said.

‘Not playing by the rules’

In question period, Prime Minister Stephen Harper fired back at Rae, pointing to a Liberal MP whose campaign was fined by the CRTC over an election robocall that didn’t identify who paid for it.

“The leader of the Liberal Party is asking us for a completely different standard than his own. He accepts in his party an MP whose campaign was found to have broken the law with his automated calls,” Harper said.

“As has been conceded some time ago, there were some errors in the filings of the official agent in this case. That is the individual responsible. A new official agent was named. That agent has been working for some time with Elections Canada to correct these problems.”

New Democrat MP Jack Harris, who represents the riding of St. John’s East, says the overspending could have provided an unfair advantage for Penashue over the other candidates.

“It’s another example of the Conservatives not playing by the rules,” Harris said.

“But if it affected the result of the election, then clearly it questions the legitimacy of the result and the legitimacy of the Conservatives having an additional member sitting in the caucus and in the cabinet, and I think that’s something Canadians are very concerned about.”

Penashue did not attend question period on Wednesday.

With files from Peter Cowan

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