Alberta party organizers spent over $8M in taxpayer money
But taxpayers in dark as to how it was spent
Hugh MacDonald, Edmonton-Gold-Bar MLA
Photograph by: Bruce Edwards, edmontonjournal.com
Constituency organizations for Alberta’s four most prominent parties spent at least $8,238,359.03 since 2006, according to an analysis of financial statements filed with Elections Alberta.
The money flowed from political donations with the help of a 75-per-cent tax credit that cost the Alberta treasury as much as $5 million — money the province could have spent on programs and services.
Under Alberta law, constituency associations must report how much they spend, but are not required to disclose what they spend it on.
Alberta Liberal leadership candidate Hugh MacDonald, who researched the expenses of three parties, is calling for the legislation to be amended to require constituency associations to disclose expenditures over $375.
Since constituency associations are required to disclose the names of those who made donations of more than $375, they should also be required to disclose expenditures of more than that amount, he said.
“I think it is a loophole in the law and I just think it should be tightened up,” MacDonald said.
He questions how some constituency associations could ring up more than $50,000 annually in expenses — excluding election spending — when they have neither offices nor paid staff.
“What are these expenses? I have no idea,” said MacDonald, whose own Edmonton Gold Bar constituency association has spent less than $20,000 over the past five years. “Are they putting this money into charities? Is some of this money going back into the party?”
He said his constituency association spent a total of $2,620.25 last year, and one of the biggest expenditures was $700 for a Christmas party.
The lion’s share of the spending in Alberta was reported by constituency associations of the governing Progressive Conservatives. They spent more than $7.5 million since 2006. By comparison, the Liberal constituency associations spent about $302,000 and the NDP spent about $142,000.
The Wildrose Alliance racked up nearly $284,000 in constituency spending in 2010.
Canadian Taxpayers Federation Alberta director Scott Hennig supports more accountability in constituency spending, noting the political tax credit is far more generous than the 50-per-cent credit for charitable donations.
The sliding tax credit for political donations is 75 per cent for the first $200 donation, 50 per cent on the next $900 and 33.3 per cent on the next $1,200, to a maximum credit of $1,000.
Hennig estimates the tax credit for donations to constituency associations since 2006 ranges from $2.9 million to $5.7 million, depending on the size of the donations.
“You can make a $200 donation and get $150 of that back. It’s crazy.”
Alberta Finance said it issued tax credits for $7,988,739 for the five years from 2005 to 2009 for all political contributions to parties and campaigns, including money donated to constituency associations.
Elections Alberta spokesman Drew Westwater said the Election Finances and Contributions Disclosure Act was amended last year, but no changes were made to require disclosure of constituency expenditures. He said there are no rules governing how the money is spent.
Federal constituency associations are required to disclose their expenses in audited statements, according to Democracy Watch spokesman Duff Conacher. British Columbia also requires constituency associations to provide information about their expenditures.
Premier Ed Stelmach, who ran for the Tory party leadership on a platform of transparency and accountability, will review MacDonald’s request “in the fullness of time,” said spokesman Cam Hantiuk.
Stelmach’s Fort Saskatchewan-Vegreville riding association is one of the five biggest spending associations in the province, with expenditures of more than $254,000 since 2006.
At the top of the list is Ken Kowalski’s riding of Barrhead-Morinville-Westlock, with nearly $330,000 in expenditures since 2006. But the veteran speaker of the legislature didn’t believe the figure when it was put to him.
He said it was “absurd” to suggest his association spent $300,000 in five years — unless election spending was included. “We don’t spend $60,000 a year,” he said.
Kowalski acknowledged spending might have been higher than usual in 2009, when his constituency association threw a party for 650 guests to celebrate his 30th year in office.
Annual statements filed with Elections Alberta show Kowalski’s association reported expenses of $108,179.93 that year.
Kowalski said his constituency board is accountable to association members for how the money is spent, and insisted a new disclosure law isn’t necessary. “Checks and balances are there,” Kowalski said. “In 32 years of this, no one in the public has ever asked me to disclose this.”
Grant MacEwan University political science professor Chaldeans Mensah said the public wants more accountability. “Once you introduce a measure of public funding through tax credits there is always a need to make sure these funds are expended properly,” said Mensah. “No one is casting aspersions on Ken Kowalski, but it’s important there is accountability and transparency when funds are expended by these associations.”
There should also be legislated guidelines on how money donated to constituency associations can be used, he said. “I think there are a whole series of rules that need to be updated, and I think the public appetite for reform is increasing,” he said.
Cabinet ministers Dave Hancock, Lloyd Snelgrove and Rob Renner had no objection to reporting how their associations spend donations. “I have no problem disclosing what we spent money on, but it is the association’s business,” said Education Minister Dave Hancock, whose Edmonton-Whitemud constituency association spent $46,159.27 last year and more than $303,000 since 2006.
He said he was not surprised to be second in spending, since he has the largest constituency in the province with 72,000 voters and 150 members on his board. “We’re a very active association,” Hancock said.
Pat Godkin, executive director of the Progressive Conservative Association of Alberta, said constituency associations spend most of their money on political fundraisers such as golf tournaments, dinners, breakfasts, and guest speakers for receptions. “When you raise money, you have to have an attraction for people to come out and make a contribution,” she said.
Associations also have to pay to rent halls for monthly meetings, maintain websites and mail newsletters. Sometimes wealthy constituency associations will send money to others that need help fighting an election, Godkin said.
She said the goal of fundraisers is to build a war chest for elections. “We want each constituency to be out raising money as much as they can,” Godkin said.
Wildrose Alliance MLA Rob Anderson, whose constituency was one of the best earners for his party in 2010, favours more transparency, as long as it doesn’t overwork boards or force them to pay to have expense reports audited. “These are volunteer boards, and so it gets tough to ask these guys, when they are running around trying to put together a constituency dinner, to handle more paperwork.”
Some constituency associations were reluctant to reveal details of their spending when asked.
Dave Purewal, president of Gene Zwozdesky’s Edmonton-Mill Creek association, declined to say how his board spent nearly $40,000 last year. But Ron Pollock, president of Fred Lindsay’s Stony Plain constituency, said his association spent much of its $54,500 in expenses in 2010 on an annual silent auction, which includes food and live music.
Pollock said itemized expenses are not disclosed to the public, but they are presented to constituency board members.
It’s also not an issue with Tory supporter Krishan Joshee, who was eligible for a $325 tax credit when he paid $550 to play in Kowalski’s annual golf tournament.
“I have been a member of the party since 1971, so I give money when I can afford it,” said the former chairman of the defunct Wild Rose Foundation. “I’ve never questioned how they are spending it. I know they are doing good things. ... Besides, my family loves to golf.”
Mensah said the scale of the Tory expenses shows the party’s adeptness at raising funds and underscores why it has been in power for four decades.
“The constituency associations clearly have a lot of resources in their possession, and their ability to advertise and promote their candidates is an incredible advantage,” he said. “It makes it especially difficult for other parties to be able to compete on an equal footing against the Tories.”
dhenton@calgaryherald.com
kgerein@edmontonjournal.com
kkleiss@edmontonjournal.com
In 2010, constituency associations for Alberta’s four most prominent political parties spent more than $1.7 million to build support and raise money for political candidates in the province. The amount of money a political party spends on partisan mail-outs, fundraisers and member activities is a good barometer of its grassroots political strength. Here’s how Alberta’s parties stack up:
Progressive Conservative
Total: $1,397,251
Average: $17,040
Highest: $54,545 in Stony Plain
Lowest: $0 in 1 constituency
Wildrose Alliance
Total: $283,983
Average: $3,421
Highest: $28,703 in Calgary-Lougheed
Lowest: $0 in 13 constituencies
NDP
Total: $39,081
Average: $470
Highest: $24,695 in Edmonton-Beverly-Clareview
Lowest: $0 in 62 constituencies
Liberal
Total: $33,592
Average: $405
Highest: $6,302 in Edmonton-Rutherford
Lowest: $0 in 46 constituencies
Compiled by Karen Kleiss, Edmonton Journal
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