FFWD REW

Investigating Calgary’s ‘Wild West’ campaign financing

Fast Forward goes back to 2004 election and follows the money

Flashing his boyish grin Mayor Dave Bronconner makes another campaign promise. Not only will he push to extend the C-Train line but he’ll build three new recreation centres. Just down the road from city hall mayoral challenger Alnoor Kassam is making promises of his own. Fewer taxes. Ten new hockey arenas. Wider bicycle paths.

While candidates pump out press releases and smile for news cameras Fast Forward has been digging into campaign records from the 2004 civic election and investigating the way these campaigns are financed. Compared to other Canadian cities Calgary has few campaign finance rules. Winnipeg Toronto and Ottawa have rules on how much candidates can fundraise and when but Calgary candidates fundraise and spend without limits anytime they want — and they can keep whatever’s left over for themselves tax-free.

Candidates aren’t required to report where many of their contributions come from and their contribution statements are littered with errors. Many candidates don’t file their statements at all. “Basically there are no rules” says Naheed Nenshi of city hall watchdog Better Calgary Campaign. “It’s the Wild West out here.”

BOOMTOWN BONANZA

The sprawl on Calgary’s edges doubles as a visual guide to large swaths of Bronconnier’s 2004 campaign contributor list. The Qualico Group built the communities of Crestmont and Royal Oak and donated over $6000. Devitt-Forand which builds grocery stores strip malls and car dealerships gave $10600 (Bronconnier’s second-largest contribution). Remington Development Corporation a builder of big-box complexes and corporate offices donated $8675.

Of Bronconnier’s $673498 war chest more than $150000 came from development construction and real estate companies. If engineers and architects are added to the calculations the number reaches almost a third of his total contributions. “That’s tradition” Bronconnier says. “The development industry is interested in what happens at city hall…. Just like the oil and gas guys contribute to the provincial campaigns because they’re interested in what happens.”

Most contributions from developers go to incumbents. Ward 10 Ald. Andre Chabot learned this first-hand in the 2004 election which he lost. “I wasn’t ever viewed as a front-runner by some of these guys that typically will contribute to whomever they think has a chance of winning” he says. After Chabot won the 2005 byelection developers regarded him differently. “They’re all coming left right and centre. I can’t even keep track of all of the contributions that are being given to my office.”

Remington Development Corporation donated to 10 of 13 incumbent aldermen in 2004 with sums ranging from $300 up to $2500 for Ward 2 Ald. Gord Lowe. Remington donated to only one non-incumbent. President Randy Remington says his company uses “similar principles applicable to finding the best candidate for any job” when deciding which candidates to support. “Both businesses and individuals have a responsibility to the city in which we work and live to ensure the best leaders are in civic office” Remington says.

All the current aldermen took donations from developers. “They are key partners in building the city and so access to the political process is hugely important to them” says Ward 8 Ald. Madeleine King who got over $16000 from those in the industry. “We need to recognize that and dignify it.” However King says voters hold the most power. “I don’t feel they’re getting short shrift.”

In other Canadian cities many of these donations from developers would be illegal for one reason: they’re too big. A contributor can’t give more than $2500 to a mayoral candidate in Toronto and no more than $750 to a councillor. In Winnipeg the cap for mayoral contributions is $1500 and $750 for councillors. Contributions are also capped in provincial and federal elections but in Calgary there’s no such rule.

Some of Bronconnier’s developer donors aren’t based in Calgary or even Alberta. Trinity Development Group an Ottawa company currently building a big-box complex in northwest Calgary donated $7250 — almost 10 times the amount that would be legal in Ottawa. “There’s a real problem at the municipal level because there are so many people who… contribute to political campaigns who stand to get some kind of benefit out of political decisions being made” says Danielle Smith Alberta director for the Canadian Federation for Independent Business (CFIB). “It doesn’t look really good.”

WANTED: BIG DOLLARS

Developers aren’t the only large contributors. In 2004 Ward 3 Ald. Helene Larocque accepted two massive cheques from unions — $11000 from the firefighters union and $10000 from the transit union. No other aldermanic candidate received single contributions even close to that size. Again this year the transit union has given her $10000.

Large donations from unions and corporations should be stopped says Smith. “What’s the quid pro quo that’s expected there?” she says. “I’m not saying that there is one but the optics on that look really bad.”

In Ontario provincial law forbids municipal politicians from receiving contributions outside the campaign period which begins nomination day (usually in September) and ends December 31 of that year. Winnipeg has a nine-month campaign period. In Calgary any day of any year is technically part of a campaign period which is defined by the bylaw as “the period of time between consecutive general elections.” “You have the potential for a union to give candidates money in between campaign periods when contract negotiations are going on or… a developer to give money to a candidate when their subdivision proposal is coming up for approval” says Smith.

Larocque says her union contributions don’t influence her. “I don’t think they’re buying political favour. What they’re doing is supporting someone with a view to be open-minded” she says. “If the public was worried about it there would have been an outcry about it a long time ago instead of the same 10 people making the same 10 criticisms…. It’s not a public issue. You know what this is? This is a private issue for a few people.”

Bronconnier also says donors don’t influence his decisions. “There isn’t a mayor in Calgary’s 100-year history that’s been more aggressive on the development industry than myself” he says. “My job as mayor of the city is to lead it for what’s in the best interests of Calgarians. And sometimes that means even your supporters and friends do not like the decisions you’ve made.”

While some say contributions aren’t an attempt to buy political favour others think otherwise. “I think any contribution is an attempt to do that” says Ward 7 Ald. Druh Farrell. “It certainly doesn’t influence me and it’s pretty well known that it doesn’t influence me. But that’s what contributions are… that’s why we need to look at limits.”

STOCKPILING THE CASH

Because any day is technically a campaign day in Calgary candidates are free to fundraise anytime. Bronconnier and many aldermen hold annual fundraisers. Ward 5 Ald. Ray Jones has an annual golf tournament which he estimates brings in about $20000 a year. “That means (incumbents) have a three-year headstart on anyone who wants to challenge them” says Nenshi. “And the fact that incumbents never ever lose… those two things are not unrelated to each other.”

All incumbents received more contributions than their challengers in 2004 and all but one spent more than their competitors. (The exception was Diane Danielson in Ward 10. Challenger Margot Aftergood out-spent Danielson claiming a dubious victory in the scandal-ridden Ward 10 vote.) Even acclaimed aldermen collected and spent more than many candidates. Ward 11 Ald. Barry Erskine for example spent more than $67000 running against no one. Jim Stevenson the highest-spending non-incumbent aldermanic candidate spent only $37094 in the hotly contested Ward 3 where there was no incumbent.

Two aldermen — Lowe and Jones — spent more than $80000 on their campaigns. Lowe who brought in more contributions than any other aldermanic candidate ($119838) unleashed a $96775 campaign on his sole opponent Daniel Del Re who spent a mere $2312. The little-known Del Re (who’s running against Lowe again this year) was clobbered and Lowe finished with a $23000 surplus. (When asked about the possibility of spending limits Lowe says: “I don’t know who brings that up and why.”)

“You’ve got to have rules in place that level the playing field” says Smith. “The issue of name recognition already gives the advantage to incumbents. We don’t need to have campaign finance rules that are stacked against challengers and stacked in favour of (incumbents).”

Jones disagrees the current rules favour incumbents. “The first time I ran I ran against 23 people” he says. “I was not an incumbent and I went out and raised $50000. Anybody that says it’s not a level playing field is just too damn lazy. You don’t decide on nomination day that you’re going to run for alderman. If you’re going to be a serious candidate (then) you’ve decided this a year or two ago and you’ve been working your buns off for the last year or two to raise the funds to do the job.”

While there are no limits on contributions some candidates have self-imposed limits on how much they’ll take from a donor. These include Jones ($5000) Farrell ($2500) Ward 9 Ald. Joe Ceci ($2000) Ward 11 candidate Brian Pincott ($1500) and Ward 13 Ald. Diane Colley-Urquhart ($1500). “I don’t want to be unduly influenced one way or the other” Colley-Urquhart says. However some say limiting their contributions would put them at a disadvantage. Larocque says she supports legislated contribution limits “but that’s not the rules of what’s happening right now.”

Regardless the city is unable to bring in contribution or spending limits on its own. Provincial law doesn’t allow it. Unlike law in provinces like Ontario and Manitoba the Alberta Local Authorities Election Act doesn’t regulate campaign financing. It only lets a municipality do two things. It can pass a bylaw requiring campaign contribution disclosure which Calgary’s council has done. It can also decide what to do with surplus campaign money — something the current council has decided against.

TAKE THE MONEY AND RUN — OR NOT

Calgary isn’t alone in its lack of campaign finance rules. Other cities like Edmonton and Vancouver don’t have contribution or spending limits. However they do have rules on what happens to surplus money. Candidates aren’t free to walk away with it like they are in Calgary. “That is just rife with abuse” says Smith. “It doesn’t happen at either of the other two levels of government — federal and provincial — and it’s a huge hole in the campaign financing rules.”

Many candidates have amassed large surpluses. Bronconnier’s for example was $312311 after the last election. Ward 1 Ald. Dale Hodges had the highest aldermanic surplus at $69971. Because every day is a campaign day in Calgary candidates can legally fundraise for more than two years and then suddenly announce before nomination day that they will not run. Not only are candidates allowed to keep all the money they’ve raised but because they aren’t candidates on nomination day they don’t legally have to disclose how much they’ve raised or where it came from. “The lack of guidelines… opens it up for people to be unethical yet never illegal” says Pincott.

Pincott is running in Ward 11. Erskine the ward’s current alderman announced September 12 that he wouldn’t run for re-election. He had a surplus of $6094 after the 2004 election and has raised more since (he hasn’t said how much). “He has said that he wants to run for provincial politics so he could use that money to finance his nomination” says Nenshi. “Or he could just go and buy a car with it.” (Erskine didn’t return numerous phone calls.)

Something similar happened in 2004. That July over two months before nomination day then-Ward 3 Ald. John Schmal said he wouldn’t run again. When Fast Forward recently asked Schmal what he did with his surplus — which after the 2001 election was $48000 — he refused to answer questions. “I’m not getting into it” he said. “The news media comes back to me over and over again and I’ve already told them I’ve donated it… my conscience is clear and I feel fine.” When asked if he donated his entire surplus Schmal said: “Look I’m not getting into it any further.”

Some council members — like Bronconnier Ward 4 Ald. Bob Hawkesworth Lowe and Larocque — have promised to give the surplus to charity once they leave office. Others like Hodges Jones and Ward 12 Ald. Ric McIver say they don’t know what they’ll do. “That’s something I’ll have to decide at that time and I’m hoping by then that we’ll have rules in place so it’s not my choice anymore” says McIver.

DON’T PEE HERE AND HANDS OFF OUR MONEY

Last November on the same day council passed the infamous public behaviour bylaw regulating public urination and spitting the mayor and aldermen voted against regulating campaign surpluses. It was voted down eight to seven. Those opposed to regulations were Ward 6 Ald. Craig Burrows (who had a $51105 surplus after 2004) Ward 14 Ald. Linda Fox-Mellway ($33676) Jones ($59334) Lowe ($26407) Larocque ($4680) Hodges Erskine and Bronconnier. “The people who make the decisions are the people who benefit from the current system” says Nenshi. “So they have no incentive to change it.”

In Vancouver Toronto and Winnipeg the municipality holds surplus campaign money in trust until the next election. If the candidate chooses not to run again the money goes into city revenue. In Edmonton candidates must give their money to charity if they’re not running again.

The current Calgary council is sharply divided on surpluses. “I don’t know why everybody’s so concerned about it” says Jones. “It’s not public money.… The only people who should be concerned about it are the people that are donating it.” Campaign donations on the municipal level are considered personal gifts not tax-deductible political contributions like they are on the provincial and federal level. “I object to the current funding federally and provincially” says Bronconnier. “I don’t think you need my tax dollars to run any political campaign.”

Colley-Urquhart argues that making contributions tax-deductible would be a better way to regulate campaign financing. “To me that would make it totally transparent” she says. “So whether someone donated $10 or $25 or $25000 they would be issued a tax receipt and it’s all above board.” McIver agrees. “It would say ‘This isn’t your money anymore Mr. and Ms. Candidate. It’s restricted funds under the Income Tax Act… that would open up a bunch more legal mechanisms to actually control what’s going on.”

Colley-Urquhart says last year she wrote a letter to Prime Minister Stephen Harper and then-provincial municipal affairs minister Rob Renner asking for amendments to provincial and federal law so municipal campaign donations could be tax-deductible. “I didn’t really get much back federally and provincially Rob Renner said that he didn’t think that was a priority at this time to amend the legislation” she says.

DOTTING T’S CROSSING I’S

Campaign contribution disclosure is also different in Calgary than it is in other cities. In Vancouver provincial law requires candidates’ statements to include the amount date and type of donor (corporation individual union non-profit etc.). If the donor is a numbered company the list must include the names of at least two company directors. All of this is made public.

In Calgary candidate statements lack a consistent style and are littered with errors spelling mistakes and vague contributor names. In 2004 Bronconnier had donations worth $17350 from 32 unnamed numbered companies. Another of his donors ($1500) is listed simply as “Graham.” Graham — which is a first name a last name and the name of a local construction company — also gave $400 to Lowe. Another frequent contributor is “POV.” Burrows got $1000 from “Brichwood Prop.” (sic). “Theoretically there have been auditors looking at these” says Nenshi who unsuccessfully ran in Ward 3 in 2004. “I know my auditor would have beat me up if I was misspelling the names of donors.”

Bronconnier listed five registered charities on his list. (The Income Tax Act forbids charities from financially supporting candidates for public office.) The mayor and other incumbents also enjoyed support from Enmax a wholly owned subsidiary company of the City of Calgary. Enmax donated to six incumbent aldermen ($1670 in total) in addition to the mayor ($2100). Non-incumbents received no listed donations from Enmax. (Peter Hunt the company’s VP of public affairs says Enmax no longer contributes to political campaigns because it “just wasn’t appropriate” and city council has since disallowed donations from wholly-owned city agencies.) Eight incumbents listed sizable donations from the Calgary Airport Authority. (The city is responsible for appointing three directors to the authority’s board.) Bronconnier listed $400 from the Calgary Health Region and $8100 from the Calgary Stampede of which he is a board member.

Candidates have to disclose the amount and source of any donation over $101. Because of this many candidates don’t list where much of their revenue comes from. Jones for example listed less than 30 per cent of his contributions. (Much of it he says comes from $10 50/50 draw tickets and silent auction sales at his annual golf tournament.) Burrows reported just over half of his $103900 in contributions. (Burrows didn’t return numerous phone calls.) Many aldermen hold $100-a-ticket fundraisers and therefore don’t have to disclose who buys the tickets.

BYLAW GONE BAD

The 2004 candidate statements are also inconsistent. Some candidates include interest in their contribution totals. Others don’t. Some use a form that breaks down fundraiser revenue and cash donations; others list just one lump sum. Lowe Larocque Chabot and McIver got the campaign period dates wrong and two aldermen listed expenses that were made after the campaign period ended. Ceci and Farrell both listed donations to the Ward 10 judicial review under their campaign expenses. (The review was launched after election day but was called off when Aftergood resigned.) Lowe also made a $1500 donation to the review but included it in his “charitable contributions” expenses.

These errors caught the eye of retired engineer and citizen muckraker Richard Puckridge after they were filed in January 2005. Alarmed that auditors had approved the statements in question he filed nine complaints with accounting bodies about the auditors. “It’s basically a rubber-stamping job (auditors) do” Puckridge says. “It’s a total farce what’s going on at the moment.”

In response to Puckridge’s complaint Lowe’s auditor said the bylaw isn’t “entirely clear” on when exactly the campaign period is. To back this up he pointed out that different candidates had used different campaign dates. Jones’s auditor noted “it is unfortunate that an individual feels this strongly on matters regarding elected candidates.” Puckridge’s complaints were eventually dismissed.

In Ontario a voter can request a compliance audit from the city if they think a candidate has broken campaign law. There is no such legal mechanism in Calgary and Barbara Clifford the city’s returning officer is powerless to investigate or appoint another auditor to investigate candidate statements. “I have no bylaw enforcement authority at all” says Clifford. The current system relies on auditors’ thoroughness and candidates’ honesty. “If they have not reported (a donor) who they should have how would I know?” says Clifford. “That would be part of the audit process.”

Some candidates don’t even bother to file their contributions by deadline which is more than three months after the election. Two of eight mayoral candidates in 2004 missed the deadline as did eight aldermanic candidates. (None were incumbents.) In Winnipeg candidates who don’t file by deadline are forbidden from running in the next election. In Calgary they’re free to run again. Pincott missed his deadline last year and was fined. “As well I should have been” he says. “I had no excuse.” Another candidate who’s running again Steve Chapman in Ward 8 filed his contribution list without having it audited first. “I think our accountant was away on holidays” he says.

WANTED: FINANCE REFORM

Ask Bronconnier about Calgary’s campaign finance rules and he’ll tell you everything’s fine. So will aldermen like Jones. “I don’t think anything’s broken personally” Jones says. However a growing number of voices both on and off council are calling for reform. The Better Calgary Campaign (BCC) wants spending and expense limits and rules for surpluses.

The BCC also wants full disclosure of donations before election day. Most aldermen say that’s not feasible — “That’s too onerous and unrealistic” says Hawkesworth — but one candidate is already doing it. “If somebody feels that it’s not logistically possible then I would suggest they’re not really keeping track of things” says Pincott who’s posting donations to his website as they come in. “Because as the money comes in you’ve got to write it down.”

Colley-Urquhart and King want the city to hire a consultant to look at campaign financing in other cities and make recommendations for Calgary. “(We) need a comprehensive review of the whole campaign financing issue” says Colley-Urquhart. “People are calling for it.” King agrees. “They’re very unhappy with the idea of aldermen being able to keep campaign contributions” she says. “We should be leaders in the sphere of accountability.”

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