Blog | May 02, 2013

By Sarah O'Donnell, Edmonton JournalEDMONTON-With less than two weeks left before last spring’s provincial election, Edmonton Oilers owner Daryl Katz stepped in with an offer to help the Progressive Conservative party.According to an investigation released by Elections Alberta Wednesday, Katz contacted Calgary businessman and veteran PC fundraiser Barry Heck, an old acquaintance, and agreed to collect donations from work associates and friends.According to an investigation released by Elections Alberta Wednesday, Katz contacted Calgary businessman and veteran PC fundraiser Barry Heck, an old acquaintance, and agreed to collect donations from work associates and friends.Perceiving an urgent need to purchase ads during the final week of the fiercely fought campaign, both sides discussed the legal propriety of a bulk donation as other high-profile PC supporters and Katz Group executive Jim Karvellas got involved.On April 16 — six days after Katz reached out to the party — the PC’s Edmonton office received a $430,000 bank draft from Katz Group Properties Inc. while a letter to Heck identified the 17 contributors behind that bulk donation who should receive receipts for increments ranging from $15,000 to $30,000.Wednesday, after 700 hours of investigation that included 19 interviews and “extensive documentary evidence,” Elections Alberta said there was nothing wrong with making, or taking, that bulk donation. And no one breached provincial laws that limit donations to a maximum of $30,000 per person, corporation or union during an election year, according to the April 16th report by former chief electoral officer Brian Fjeldheim.“Based on the investigation, I am satisfied that each of the contributors contributed to the (Progressive Conservative Association of Alberta) from their own funds,” Fjeldheim wrote.Opposition parties decried the decision, saying the donation arriving in a single bank draft violated the spirit, if not the letter, of fundraising laws. But those at the heart of the investigation said the ruling confirmed their belief that they’d done nothing wrong.“We are very pleased this matter has been resolved and Mr. Katz has been vindicated,” Josh Pekarsky, a spokesman for Katz, said in a statement.The donations tied to Katz and his associates have been a source of political controversy, and some mystery, since the fall.When the party filed its election-related financial statements with Elections Alberta in October, its list of contributors identified Katz, three family members, his company and executives with the Katz Group as making the individual donations.But the contributions led to repeated opposition attacks after the Globe and Mail reported that Katz provided a single $430,000 cheque for those donations. Both the PC and opposition parties asked Elections Alberta to investigate whether campaign finance laws had been broken.Fjeldheim, who retired in April, said in his written decision that each of the contributors repaid Katz Group Properties Inc. from their own funds. The timing of those repayments ranged from a few hours to 18 days later.By issuing a single bank draft, the Katz company “essentially lent money to the contributors for a brief period and facilitated the pooling of their contributions through a single bank draft,” Fjeldheim said.“The Act did not prevent contributors from borrowing monies to make contributions to the political entities so long as the loan was repaid.”The money from Katz and his colleagues, which came at a crucial point in the 2012 election, made up nearly a third of the $1.5 million the Tories collected for the party’s war chest during the three-month election window.Kelley Charlebois, the Tory party’s executive director, said the Katz donation was important to the Tories but the party raked in much of its cash in the final weeks of the campaign.He said the campaign was not running out of money when the donation came in, but it allowed the party to do things it wouldn’t have done otherwise.“Sure. I mean, every time you receive donations it enables you to make choices about where you want to spend your money. You come into a campaign with a set plan and you add or take away as you see fit,” said Charlebois.Charlebois said the party would not hesitate to receive a bulk donation again despite the controversy.As a result of the investigation, the PC party did return $25,000 after learning from Elections Alberta that a personal donation by Katz Group chief financial officer Paul Marcaccio was illegal. In a decision released Tuesday, Elections Alberta said Marcaccio, whose main home is in Toronto, could not donate because contributors must ordinarily reside in Alberta.Marcaccio received a letter of reprimand from Elections Alberta. Another $25,000 donation from Marcaccio’s professional corporation was deemed legal.Premier Alison Redford and party officials welcomed the report, which they said cleared the air and validated the party’s stance that it took reasonable precautions to make sure it received donations legally.“Thank goodness we actually have people who are independent officers of the legislature that we can refer these matters to to get real information, to get real perspective and get an independent look,” Redford said.Justice Minister Jonathan Denis took a harder tack: “This has been nothing more than a Wildrose witch hunt and it’s time they stopped maligning this individual and actually go and apologize,” he said.All three opposition leaders renewed calls for a ban on all corporate and union donations, saying the ruling shows there are loopholes in the campaign finance laws that need to be changed.“This ruling effectively renders useless the contribution limits and also makes it essentially impossible for the chief electoral officer to enforce the provisions of the act,” Wildrose Leader Danielle Smith said. “In my opinion, it’s created a loophole big enough to drive a billionaire through.”NDP MLA Rachel Notley said she did not believe donors should be able to pool donations in a single cheque. “It doesn’t pass the smell test and the way to fix the problem and restore public trust is to simply ban corporate and union donations,” she said.The Alberta Liberals said the Redford government should adopt federal election laws, which would end large individual, corporate, and union donations.Public Interest Alberta’s executive director Bill Moore-Kilgannon agreed the decision shows Alberta’s recently amended Elections Act is still flawed. “At the end of the day, if the law thinks this is OK, then the law needs to change,” he said.With files from Karen Kleiss and James [email protected]/scodonnell© Copyright (c) The Edmonton Journal, May 1, 2013Read the full article on the Edmonton Journal website.