Penashue records removed from election spending file

Letters shedding light on the election spending and deal-wrangling by a cabinet minister's top campaign official have been removed from a public Elections Canada file.

CBC News had reported on the letters in the course of an investigation into spending and fundraising by the campaign of Labrador MP and Intergovernmental Affairs Minister Peter Penashue.

The letters, including correspondence from Conservative Party lawyer Arthur Hamilton and a lawyer for the region's Provincial Airlines Ltd., provided details on some of the problems Elections Canada auditors found in Penashue's 2011 election return.

They were also a way to track progress on a file in which neither the election agency nor Penashue have provided much in the way of explanation. Penashue promised last November to speak directly to his constituents but instead released a statement on his website.

Officials with the agency had to follow up several times with Penashue's official agent, Reg Bowers, over missing receipts and mis-categorized expenses. The party eventually replaced him with their own chief financial officer, Sandra Troster.

All candidates are required to file invoices and other receipts with the agency to back up their campaign spending, much of which is eligible for a refund if they win enough votes. Election campaigns are also subject to a spending cap, with a penalty of up to $5,000 and a five-year ban on running for MP for wilfully breaking expense limit rules. The penalty for accidental overspending is a fine up to $1,000 or three months in prison.

Each candidate's file also includes copies of banking records, receipts provided by their campaign to donors and, in some cases, correspondence between auditors and the candidate's official agent or other representatives.

The letters were in the file "in error" and have been removed, according to a spokesman for Elections Canada.

Airline 'wrote off' balance

The file, which is available for public viewing with a few days notice, showed Penashue was given a deal on Provincial Airlines flights during the campaign.

The now-removed letter from the lawyer for Provincial Airlines, sent to Elections Canada last September, said the airline wrote off anything over $7,000.

Invoices supplied to Elections Canada by Penashue's campaign show Penashue, his family and workers spent $24,711 on flights with Provincial.

"We understand that our client was advised in the fall of 2011 by representatives of the campaign that the campaign was only financially capable of paying the sum of $7,000 for air travel. Accordingly, our client … wrote off the remaining balance," Thomas Kendell wrote to the assistant director of Elections Canada's political financing and audit unit.

CBC News reported the details of the correspondence on Oct. 17.

In another letter that's now been removed, Conservative Party lawyer Arthur Hamilton says the airline contract submitted by Bowers "is not reliable in its costing, and does not represent the minimum commercial value Provincial Air believes the campaign received in the 2011 election period."

A discount on the commercial value of an item or service provided to candidates counts as a political donation. Corporate donations are illegal in Canada.

Hamilton noted in the Aug. 7, 2012, letter that Bowers has been replaced by Troster. He said the party was working with Elections Canada to review the election return for any corrections.

'Isn't generally forthcoming'

The election agency doesn't provide enough information to Canadians, says a spokesman for Democracy Watch, a group that advocates for open and transparent government.

"It's not entirely unsurprising, because Elections Canada isn't generally forthcoming with information," said Tyler Sommers.

"The reality is we're not going to hear anything when they finish this, either. It's very seldom that we get any information out of Elections Canada. So the fact is, if they were to say, well, we'll give you information once the file is closed, I personally wouldn't be able to take them at their word on that, because in the past that's not been what they've done. They've given as little information as possible."

The agency doesn't provide any information about the thousands of complaints it has received over the years, Sommers says, other than vague compliance agreements posted to its website.

"That's what we're very concerned about, because as a law enforcement agency and as the body that enforces our free and fair elections, they should be very forthcoming with information, and they should be informing Canadians [about] absolutely everything they can about how they are ensuring that our elections are free and fair," Sommers said.

Sommers says it's up to parliamentarians to enact a law that forces Elections Canada to make more information public.

"There's been gaping holes for many years and no one's filled those holes," he said.