Compliance Agreement Illustrates Shady Side of Nomination Contests

A Compliance Agreement entered into by Liberal Party candidate Sven Spengemann and an article on it by the Ottawa Citizen have shone a light on the sometimes shadowy world of nomination contests.

Reading the Compliance Agreement and the article together provides a more balanced understanding of the issue that reading just one of them. The Compliance Agreement is concise, setting out what happened, what the law is and how it was contravened, and what steps will be taken to come into compliance with the law. The article provides the gossip, from the political spin to the behind-the-scenes issues of a contentious nomination contest.

This is why I believe that it is good journalism to provide links to source material in articles. The report on the compliance agreement is interesting, but why not provide a link to the agreement as well?

In addition, if you want to see Mr. Spengemann’s financial report for the nomination contest, you have to navigate through Elections Canada’s financial reports database, or just click the link here: http://www.elections.ca/WPAPPS/WPF/EN/NC/SelectSearchOptions?act=C2&returntype=1&queryid=25650e43eddd4125a3b18d4684ebf515

Here is the short version of what happened in this nomination contest.

The contribution limit for candidates was $2,200. Mr. Spengemann reported contributing $2,200 to his own campaign. However, an investigation established that Mr. Spengemann had contributed a further $2,055.64 to his campaign by paying for expenses out of his own account, and not telling his financial agent about it. This allowed Mr. Spengemann to spend more on his campaign that he was allowed to, although he was still well under the total expenses limit.

This compliance agreement is notable for the many undertakings that Mr. Spengemann has agreed to do. First and foremost, he has to try and tell his financial agent about the expenses that he incurred on his own. Second, he has been given a second chance to try and raise the $2,055.64 from contributors, to make up for his own excess contributions. Third, he has agreed to file an updated report once he has collected these funds, or within 7 months at the latest.

Another noteworthy part of this story is the comparison to Dean Del Mastro, who was prosecuted for exceeding the election expense limit in a federal election. Why was Mr. Spengemann given the option to sign a compliance agreement, instead of being charged?

There are a couple of factors that may explain this. First, Mr. Spengemann exceeded the contribution limit, whereas Mr. Del Mastro exceeded the expense limit. Election expense limits are designed to limit the advantage of well financed candidates. Mr. Del Mastro spent more than the limit that applied to everybody. Contribution limits are designed to limit the influence a single contributor may have over a candidate or party. In particular, limits on how much candidates can spend on their own campaigns are designed to limit the advantage that wealthy candidates have over those with less funds. Mr. Spengemann’s total expenses were under the limit, but by contributing more to his own campaign, he ended up spending more than he was allowed. He could have raised more contributions to pay for these expenses, but he didn’t. So like Mr. Del Mastro, Mr. Spengemann spent more on election expenses that he was entitled to. But unlike Mr. Del Mastro, Mr. Spengemann could have done so legally, just by collecting more donations.

That isn’t the most convincing distinction, so in my view its more likely that the fact that this was a nomination contest as opposed to an election is the main reason why a contribution agreement was used in this case. An election is an event of national importance. The result in one electoral district matters to everyone. However, a nomination contest is mainly an internal party matter. There are valid arguments that Elections Canada shouldn’t even be regulating nomination contests at all. The fact that very few people outside of the Liberal Party or the electoral district are affected or are likely interested or aware of this probably explains the different approach from the Commissioner of Elections.

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