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Conservative admen dubious of 'in and out' scheme: warrant

OTTAWA - The Conservative party's own election advertisers expressed doubts about the propriety of shifting money for campaign commercials from headquarters to ridings and back, according to internal correspondence made public after Tory offices were raided last week.


OTTAWA - The Conservative party's own election advertisers expressed doubts about the propriety of shifting money for campaign commercials from headquarters to ridings and back, according to internal correspondence made public after Tory offices were raided last week.

The warrant used to justify the raid by Elections Canada says the federal Conservatives made "false and misleading" statements in their financial returns for the last election and exceeded their campaign spending limit by over $1 million.

A copy of the warrant and supporting materials was provided Sunday to The Canadian Press.

Many of the accusations contained in the documents had been heard previously. Prime Minister Stephen Harper has contended ever since the raid last week that his party did nothing wrong and that officials were surprised when the RCMP, acting on a request from Elections Canada, showed up with the warrant at their offices.

The continuing furor spells political trouble for Harper, who campaigned in 2006 on a clean-up-politics agenda in the wake of the sponsorship scandal that rocked the previous Liberal government.

Buried in the almost 700 pages of invoices, receipts and accounting records are e-mails that suggest not everyone in the Conservatives' circle was certain they were acting within the law.

Under the scheme 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.

In an e-mail message sent to company colleagues in early December 2005, about two weeks into the election campaign, a senior member of the ad-buying team cast doubt on the practice.

David Campbell, president of GroupM Canada, a company related to party ad purchasers Retail Media, noted senior party officials were "thinking of 'switching"' some ad buys "over to the ridings."

"Details are sketchy and I am not sure how national or regional TV would constitute a riding expense unless all the ridings in a region pooled expenses."

Furthermore, Andrew Kumpf, another executive with the company that bought Conservative ads, had sent an e-mail to a party adman two days earlier questioning the legality of the plan to purchase ads on behalf of local candidates.

"While our thinking is that this option would be legal we are not certain beyond all reasonable doubt," Kumpf wrote.

The e-mails were among the material amassed by Elections Canada in support of its application for the search warrant.

The documents were supposed to be made public Monday, but a bizarre attempt by the Tories to get ahead of the news by briefing select reporters on Sunday led to a slapstick scene that saw party representatives switching hotels, slamming doors and scampering down fire exits to escape pointed questions from journalists who weren't invited to the meeting.

The Conservatives have defended their advertising purchases as entirely legal.

Elections Canada officials offered stark disagreement.

"The Conservative party of Canada exceeded its election expense spending limit for the 39th federal general election," the 68-page supporting affidavit for the warrant alleges.

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 affidavit, signed by Elections Canada investigator Robert Lamothe, also alleges that Tory advertising transactions - commonly 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 alleged funnelling 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.

Items covered by the search warrant included:

-e-mails and other correspondence between Conservative Party representatives, the Conservative Fund Canada, ad-buying agency Retail Media and its related companies;

-a wide range of financial documents such as invoices, purchase authorizations, receipts, accounting records, contracts and meeting minutes;

-advertisement scripts and recordings for radio and television.

Pat Martin, the NDP ethics critic, offered a foretaste of things to come Sunday, declaring that "heads should roll" if the Tories are found to have broken the election rules.

"That $1 million frankly could have bought the election," said Martin. "That's a really big advertising buy in a very close, razor-thin difference in a federal election."

The Conservatives filed a civil suit last year challenging Elections Canada's interpretation of campaign law. And senior Tories, including Harper, have publicly questioned the motives for last week's raid, suggesting the electoral agency may have been trying to short-circuit that suit.

On Sunday, high-ranking Conservative officials, including campaign director Doug Finley, chief media spokesman Ryan Sparrow and party lawyer Paul Lepsoe held briefings for hand-picked journalists in a downtown hotel room in an effort to shape the emerging story ahead of the warrant's release.

When other reporters learned of the briefing, the officials switched the encounter from the Lord Elgin hotel two blocks west to the Sheraton.

That effort proved fruitless. The uninvited reporters quickly learned of the new location and gathered in the hallway outside the meeting room. Sparrow opened and quickly closed the door on the prying newcomers.

"This is a private meeting," he repeatedly told the CBC's Keith Boag.

Those who managed to get inside the door were handed a sheaf of documents and a CD-ROM containing the warrant and affidavit material.

Sources say the accompanying spin session touched on most of the same points the party has been making since the raid.

But none of the officials would repeat their lines in public when they emerged from the room to be greeted by reporters who weren't on their guest list.

Instead they scurried for a nearby exit and beat a hasty retreat down the fire stairs.

An earlier effort to ease their difficulties failed when a hotel manager unsuccessfully tried to convince the waiting journalists to leave the premises.

He relented after the assembled media unanimously rejected his request.

The Canadian Press, the CBC, Maclean's, the Globe and Mail and the Halifax Chronicle Herald were among those who were not invited to the party's briefing.

 
 
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