Martyn Brown: Unstacking B.C.'s crooked deck of "pay-to-play" politics
British Columbia’s campaign finance system is democratically corrosive, chronically deceitful, ethically blind, and coercive to the core.
Oh, well. What do you expect me to do about it, you might be thinking?
For starters, wake up. And get angry. Real angry.
Because it is a morally bankrupt system that is unfairly stacked in favour of one party at the expense of all others. A system characterized by institutionalized influence-buying, unethical practices, and an abominable lack of transparency—all of which marginalize your voice in government and undermine “free and fair” elections.
Because as a voter, you should be more than a little concerned about a party funding system that may be widely susceptible to violations of the Election Act, as the Globe & Mail’s Kathy Tomlinson has recently exposed.
Revelations that Elections B.C. initially investigated and subsequently referred to the RCMP.
Because as a taxpayer, you may be also getting ripped off by a system that is using your tax dollars to subsidize political donors who have been claiming political contribution tax credits for contributions that would appear to be illegal. Something the Canada Revenue Agency may also want to investigate.
Because you should be royally ticked at a government that is effectively supplementing its party campaign war chest by misspending millions of your tax dollars on blatantly political government ads that are partisan pre-election ads by any other name.
Because the system stinks from top to bottom, as I have extensively argued in this three-part series on the need for campaign finance reform.
And more importantly, because you can change it for the better, by simply refusing to vote for the only party that is thumbing its nose at you on that issue. A party that is also trying to buy your vote with your own tax money.
OK, so maybe you are already good and angry, and you want to change the system. Excellent.
But what does that entail? How to unstack B.C.’s crooked deck of “pay-to-play” politics? What should be done to fix B.C.’s woefully outdated and widely discredited campaign finance system?
That is what this dissertation aims to address in considerable detail and at great length. Which is to say, it is not intended for casual readers who don’t have the interest, time, or patience to deeply explore the possible solutions to B.C.’s broken campaign finance system.
Like my previous installment in this series, this analysis is really only offered for the very limited audience of avowed politicos and policy wonks who care enough about campaign finance reform to assiduously consider what this former “insider” suggests it entails.
Essentially, we need to take four simple steps:
- Level the playing field
- Increase transparency
- Emphasize ethics
- Strengthen compliance and enforcement
The blueprint for reform is not hard to fathom or to effectuate. In fact, we are about the last jurisdiction this side of Kazakhstan not to have modernized its campaign finance system.
The model that Quebec adopted a few years ago in response to its corruption scandals is certainly Canada’s “gold standard”. Ontario has also recently been shamed into legislating a similar campaign finance regime. Neither system is perfect, but both are vast improvements over the “cash-for-access” systems they outlawed.
In British Columbia, the NDP, the Green party, independent MLA Vicki Huntington, Democracy Watch, Integrity BC, Dogwood B.C., the Canadian Centre for Policy Alternatives, and others have all advocated or embraced various measures to ban Big Money from B.C. politics.
The larger project is to reduce the inordinate influence of big money in B.C. politics and to put the public interest ahead of partisan, personal, and corporate interests.
As such, the goal of campaign finance reform must be viewed through a wide-angle policy lens that is broadly aimed at promoting greater fairness, transparency, affordability, and ethical conduct in B.C. politics.
Tomorrow, the Clark government is expected to table its legislation to require timelier reporting of political contributions. The premier calls it “real time” reporting.
Never mind that the chief electoral officer has dismissed that descriptor as “an inaccurate and inconsistently defined phrase” that should be regarded as simply “more frequent reporting". Welcome as that is, it won’t do a thing to make today’s secretive system any more transparent.
Nor will it address the numerous other serious flaws in B.C.’s “wild west” party funding system that should infuriate anyone with even half a brain. Which apparently excludes the Clark government.
Here, then, is my stab at a comprehensive plan to change that.
1. Level the playing field
For years, the B.C. Liberals have dismissed the Opposition’s calls to ban corporate and union political donations. Six times the NDP has proposed such a ban, which the B.C. Green party has unilaterally adopted as a matter of policy, by refusing to accept such contributions.
B.C. NDP Leader John Horgan’s bill would outlaw political contributions from all organizations, including corporations and unions. It would also preclude parties from accepting contributions from any individual that is not normally resident in British Columbia. And it would mandate a review of political and campaign financing that would include a review of appropriate donation limits for individuals.
Huntington’s bill would similarly restrict eligibility for political contributions to B.C. residents, not unlike the residency requirements imposed in seven other Canadian jurisdictions. Yet her bill would also limit the amount that any individual could annually donate.
Huntington’s bill would establish political contribution limits that mirror the federal contribution limits, under the Canada Elections Act.
It would restrict annual donations from any individual to a maximum of $1,500 to any one party and to $1,500 to its candidates, constituency associations, and nomination contestants. In essence, an individual could donate up to $3,000 each year to a party and its candidates.
I would go further.
First, we should only allow political contributions from eligible voters.
No one should be entitled to make political contributions intended to influence B.C. elections who is not either a registered voter or eligible for voting privileges. As in Quebec, only “qualified electors” should be qualified to make political contributions in B.C.
No money from corporations, unions, interest groups, or any organization of any type should be permitted. And no political donations should be allowable from foreign nationals or from anyone disqualified from voting in B.C., no matter how long they have lived in our province.
To give money to any party, you should have to be a Canadian citizen, 18 years or older, a resident of B.C. for at least six months immediately prior to election day, and not disqualified by any law from voting in the election. No ifs, ands, or buts.
All political donations other than cash donations under $50 should have to be made to the parties, constituency associations and candidates via Elections B.C., rather than directly to the parties’ financial agents. That would ensure that all donors meet the eligibility criteria and that no one contributes more than the law allows.
Again, that’s how it works in Quebec, where “every contribution of more than $50, and every contribution of $50 or less made by cheque, by preauthorized debit … or by credit card, intended for an authorized entity, must be paid to us [i.e. the Directeur général des élections du Québec]; we will transmit them to the entity concerned afterwards.”
Second, we should limit the amount that anyone can contribute to any party, including to its candidates, constituency associations, and leadership contestants, to a total of $2,000 in any year.
We should limit the total amount of money that anyone can annually contribute to any party’s central operations to a maximum of $1,000, and to an additional $1,000 for any or all of its candidates, constituency associations, or leadership contestants.
By contrast, Ontario has recently restricted the amount that individuals can contribute. They can give up to $1,200 maximum in a year to any one party, and a further $1,200 each to that party’s candidates, constituency associations, and leadership candidates. As such, an individual could donate up $4,800 a year in total to any one party for all of those categories.
Quebec is at the other end of the scale.
It restricts that the total amount that any individual elector can contribute to each of the political parties, including its authorities, to $100 a year. In addition, “during a general election or by-election, the elector in an electoral division where an election is taking place may give additional contributions up to a total of $100 for the benefit of each of the parties, independent members, and independent candidates".
Now that’s tough. Much more so than the limits I am proposing. Specific exceptions might be also permitted, for example, to allow for one-time extraordinary gifts from the estates of deceased persons whose valid wills or trusts designate parties as beneficiaries.
Third, we should scrap political tax credits for donors and establish fair, affordable, and transparent voted appropriations for political subsidies.
This is the hill that Christy Clark wants the NDP and John Horgan to die on. She wants to turn the debate on campaign finance reform into a phony debate on who should pay for political parties: B.C. taxpayers or the private sector.
Horgan has not proposed that public funding should supplant private funding for political parties. He has only proposed that we should outlaw corporate and union donations and ask a special advisory committee to look at all the funding options and report back to the legislature.
Don’t be surprised if Clark introduces a motion for legislative debate that calls on all MLAs to oppose public funding for political parties. Alternatively, she might call Huntington’s private member’s bill for debate, to essentially force the same vote.
Either way, she would like to stage a vote that positions the NDP as supporting a public funding model that would ostensibly make taxpayers pay more for parties and politicians.
At the very least, she hopes to position the New Democrats as hypocrites who also host lucrative “pay-to-play” fundraisers; who are not transparent about their “true plan” to support taxpayer-subsidized political funding if they form the next government; who did not vote for firm funding limits when they had the chance; and who are equally complicit in taking whatever they can get from the rich prospective donors they also solicit for $10,000 contributions.
Clark also wants to provide the Green party’s Andrew Weaver with a forum to slam the NDP for not following his party’s lead in practicing what it preaches.
All of it is a ruse and a dishonest shell game.
The fact is, taxpayers are already effectively subsidizing political parties and candidates, to the tune of about $4 million a year, through the political contribution tax credit.
Today, individual donors can claim an income tax credit of 75 percent of their first $100 of political contributions, 50 percent of the next $450 they give, and 33.3 percent of anything they give over $550, for a maximum tax credit of $500.
To put it another way, that tax credit already costs taxpayers $75 on the first $100 that anyone claiming it gives, $225 on the next $450 he or she gives, and $198 on any amount donated over $550. To a maximum tax gift of $500.
As such, a $1,150 political contribution only really costs donors $652 because they get a tax credit of $498.
The B.C. Liberals don’t want to talk about the fact that we are already indirectly subsidizing political parties and candidates through a tax credit that they use in their appeals to raise money—donations that they fully receive, of which taxpayers effectively pay three-quarters, one-half, or one-third, when made by individuals claiming the tax credit.
A lot of those tax subsidies are going straight into the pockets of wealthy donors who hardly need your assistance to lighten their “burden” in buying tickets to $20,000-a-plate cash-for-access fundraisers.
They are going disproportionately to the richest citizens who can afford to give thousands of dollars a year for political “donations”; contributions that are largely aimed at buying special access and influence, or for which they feel pressured into offering by a coercive system that is tantamount to extortion.
If the Globe and Mail’s latest revelations are borne out by the RCMP’s investigation, some of those political tax subsidies may have also been illegally claimed by individuals who have made contributions on behalf of companies or clients, for which they have been reimbursed, in contravention of the Election Act.
My hunch is that if the Canada Revenue Agency ever seriously investigated the income tax credits claimed by many large and frequent political donors, it would be shocked at the breadth and extent of that problem. Not just in B.C., but in other provinces as well.
This year, the budget (p. 116) has inexplicably pegged the government’s cost of the political contribution tax credit at “only” $3 million.
That is hard to reconcile with the fact that individual contributions are way higher than ever. That should increase the cost of those tax credits, which have long been estimated at $4 million a year. Heavens, the 2003 budget estimated the cost of those political tax subsidies at $5 million.
That is a lot of money that taxpayers are being forced to hand out to individual donors through income tax breaks, without any accountability. All of that money could be redirected to making our campaign funding system fairer for all parties.
The question is not, as Clark would have voters believe, whether we should have a model of public or private political funding. Rather, it is this: what is our purpose in providing any public funding to political parties and what should we do to advance that purpose?
What is the right mix of public vs. private funding? What is the right amount of public funding that taxpayers should be expected to contribute, if any? Is it better to provide that assistance through tax credits to individuals, or directly to parties through Elections B.C.?
Until recently, I was opposed to any increase in public funding as a trade-off for eliminating corporate and union donations. I am now persuaded that the harm done by the current system far exceeds the modest additional cost that a different mix of public and private funding would impose.
Surely our purpose in providing public funding for political purposes should be to encourage free and fair elections that maximize voters’ democratic choices and that reduces as far as possible the potential for undue influence by anyone on election outcomes or on government decision-making.
Here’s what we should do.
We should altogether scrap the political contribution tax credit, as Quebec did in introducing its new campaign finance regime, in 2013.
We should rededicate the tax dollars now used to pay for that tax expenditure to instead supplement the parties’ financial resources, most of which should still come from individual contributions.
But we should do that at a lower cost-per-voter than in other provinces like Quebec and Ontario, and in a different way, with annual appropriations that are debated and approved by the legislature.
It doesn’t have to be expensive. Quebec provides the most generous subsidy to parties in Canada.
The total reported cost of those allowances for 2015 was just over $9 million. That for a province with a population that is almost twice as large as British Columbia’s. A province with 125 elected members, as compared to the 87 B.C. will have in its next parliament.
The Quebec Liberal Party received $3.8 million in allowances in 2015, while the Parti Québécois got $2.8 million, and the Coalition Avenir Québec was given $2.1 million. Even if an identical funding regime were put in place in B.C., it wouldn’t cost taxpayers that much.
In addition, Quebec provides parties matching funds of $2.50 for each dollar contributed to an authorized party, up to an annual amount of $20,000, and $1.00 for each dollar contributed, up to an annual amount of $200,000 paid in contributions to each party. Independent members and candidates get $2.50 for each dollar they collect in contributions, up to an annual amount of $800 per member or candidate in matching public subsidies.
All of that cost Quebec’s taxpayers a further $1.1 million in 2015.
In terms of British Columbia’s $50-billion budget, $10 million or so is not terribly expensive. It represents 0.02 percent.
Changing the mix of public funding to reduce parties’ reliance on larger contributors by banning Big Money, by restricting individual contributions, and by redirecting and further supplementing existing public subsidies for political purposes would be a better way of achieving our common purpose in campaign finance reform.
It’s fair. It’s transparent. And as Quebec has found, it even works within a system that only allows any individual to contribute a maximum of $100 in any year to any one party or candidate.
We could set a lower allowance level in B.C. and not provide any matching subsidy.
Some 3,279,141 British Columbians were eligible to vote in 2013.
The $4-million tax expenditure for the political contribution tax credit already amounts to an annual subsidy of about $1.21 per voter. Each and every year. With no specific legislative debate or approval.
Why not let the legislature set that amount, or perhaps set a higher or lower amount, via a specific vote each year, as part of the annual estimates debate and budget approval process?
The Election Act might cap that amount to establish different maximum thresholds for election years and non-election years. Fact is, parties don’t need the same amount to fund their operations in non-election years as in election years. The amounts afforded to them by taxpayers need not be the same for every year.
We should make public funding more equitable by establishing a base level of funding for every party that is also sensitive to other demands on public spending.
Ontario provides a quarterly allowance to every registered party whose candidates in the previous election received at least two percent of the provincial vote, or five percent of the valid votes cast in the electoral districts in which it fielded a candidate.
That seems fair.
It would ensure that smaller parties like the Green party also get a fair share of public funding. It might lead more parties to field candidates, which is not a bad thing, and it would give voters new incentive to elect independents and candidates from smaller parties, knowing that they would have more resources to fairly compete.
That can only be good for voter choice, especially if B.C. also embraced some form of proportional representation.
Say we established an annual maximum total budget for publicy supported political allowances of $6 million in nonelection years and $10 million in election years.
Having received more votes and elected more members, the Liberals and NDP would get the lion’s share of that money. But the law would prescribe that any qualifying party would also get its fair share.
Surely the large parties can run their organizations on $2 million a year in public funding. Remember, that would be in addition to whatever they raise through private donations at the new capped amount in the absence of taxpayer-subsidized income tax credits.
As it is, the NDP somehow manages to get by on about $3 million in operating expenses—a fraction of what the Liberals spend.
In election years, the parties would raise more money, as they always do. But they would also get almost double the amount of public funding.
They would undoubtedly have to reduce the cost of their campaigns and party operations. Yet that, too, would help level the playing field for smaller parties that today can’t compete with the massively expensive campaigns that the two large parties can afford.
Another thing. We could further prescribe that parties restrict what they spend in any year to be eligible for public funding. No province does this, but we should.
If parties like the Liberals want to spend like drunken sailors, they can do so on their own dime. If they want assistance from taxpayers, they should have to cap their expenses, say, to $4 million annually in nonelection years, and to maybe double that in election years.
That spending threshold would still be way out of the smaller parties’ financial ballparks. Nevertheless, it would go a long way to eliminating the gross funding and spending advantage that the Liberals now enjoy by dint of their unholy reliance on Big Money.
Why not require the legislature to annually debate and vote on the budgets for publicly subsidized political funding, working within a statutory framework that allows for annual variations?
Instead of spending $15 million a year on government political advertising, as the Clark government is doing yet again—on the eve of an election—why not stop that altogether? Why not use a portion of that amount to instead fund several years’ worth of additional public funding that is equitably provided to all parties?
If we did that, we could stop the Liberals’ rampant abuse of public expenditures on political ads that have no place in British Columbia.
We could ban Big Money and today’s “cash-for-access” system.
And we could spend the same or less money than we spend today on political contribution tax credits, political government advertising, and other “tax expenditures” that the Clark government is funding with your tax dollars, in part, to curry political favour with its largest donors.
A fourth change we could make to level the playing field is to lower campaign-spending limits and to reinstate constitutionally defensible pre-election spending limits
The Election Act limits the amount that parties can spend on election expenses during the 28-day writ period to $4.4 million for parties and to $70,000 for candidates. The latter amounts equates to a maximum of $6.09 million for all 87 constituencies.
Why not cut each of those amounts by 10 percent?
That would reduce the spending disparity between the two large parties and their more cash-strapped competitors. It would also make it a tad easier for independent candidates to compete.
If we lowered the election spending cap, we could also reduce the amount of the election-year subsidies to parties accordingly, which would reduce the cost of those publicly funded allowances to taxpayers.
The Clark government loves to crow about its expertise in cutting public expenditures for crucial public services. Taxpayers should insist that it and all parties become equally adept at cutting their partisan political election expenses as a precondition for any public funding.
Pre-election advertising expenses are a much trickier challenge.
As we know, the courts have repeatedly struck down the B.C. Liberals’ pre-election spending limits on third parties as an unconstitutional infringement on “free speech” charter rights.
Yet Ontario’s new law has just imposed third-party advertising spending limits.
We should also embrace those limits in British Columbia and defend them as reasonable restrictions that still provide third parties lots of financial room for valid political expression.
The courts have upheld British Columbia’s third-party election advertising spending limits during the 28-day campaign period, so we need not address them. But we should mirror Ontario’s new pre-election advertising spending limits.
They restrict the amount that third parties can spend during the six-month period immediately before the issue of an election writ to no more than $24,000 in in any electoral district and to a maximum of $600,000 provincewide, indexed to inflation.
Surely Ontario has carefully reviewed the jurisprudence and it has introduced those limits preparing to have to defend them in court.
Those limits are very different than the ones that were struck down in British Columbia. They allow for much higher spending amounts and they apply for six months prior to the writ, as opposed to the 60-day pre-election period that the Campbell government had legislated.
We should also embrace NDP MLA Gary Homan’s private member's bill.
It “would restore pre-campaign spending limits on political candidates and political organizations which were removed in the spring of 2015”. It would limit the amount that candidates and parties are allowed to spend in the period 60 days prior to the official campaign to $70,000 and $1.1 million respectively.
Alternatively, a longer period could be prescribed, to mirror the proposed six-month restriction on third-party pre-election advertising.
Those restrictions could be effectively introduced as criteria for any party’s eligibility for public funding. Exceeding those limits wouldn’t necessarily be illegal, but it could preclude any party from being eligible for public funding.
Again, public funding can be a “big stick” in encouraging parties to reduce their expenditures and to reduce the cost of campaigning.
That would level the playing field for the NDP and especially for smaller parties, none of which can presently hope to fairly compete with the B.C. Liberals’ massive campaign funding advantage.
Finally, we should use the B.C. legislature’s public broadcast network to provide free informational airtime to all parties and to host scheduled leaders’ debates during the campaign period.
This would go a long way to providing all parties that meet the criteria prescribed in a new section of the Election Act to communicate to the public via public broadcasting, and to also participate as appropriate in at least one leaders’ debate during the campaign.
The CBC offers similar broadcast benefits, but we need to do more.
We should not leave it to the major media “consortiums” to dictate who gets to participate in leaders’ debates, or the terms under which those debates occur. Those rules should be spelled out in law and guaranteed to all party leaders who meet the prescribed criteria.
The cost of filming and airing those informational segments and of hosting those leaders’ debates would be born by taxpayers—not the media, nor by advertisers.
Any party fielding, say, 50 or more candidates would have the right to air their message in accordance with ethical standards and “truth in advertising” protocols for anyone who wanted to check it out on Hansard TV.
Every party leader whose party is represented in the legislature, or whose party received at least five per cent of the popular vote in the previous general election, would be entitled to participate in the publicly sponsored leaders’ debate.
Elections B.C. would be the coordinating agent for those debates, not the for-profit media.
And those leaders’ debates would be scheduled by law, with firm and consistent rules that would be prescribed by regulation upon Election B.C.’s advice, which would in turn engage all parties in formulating.
All of those publicly sponsored communications benefits would help to balance out the funding advantages that the two largest parties enjoy and that presently prevent smaller parties or their leaders from being fairly seen or heard during campaigns.
There are at least three ways in which the lack of transparency in campaign financing is now a problem.
We need new transparency about who is giving parties money, including the amounts dedicated for political contributions from public coffers. We need new transparency to shine a light on those who solicit political donations. And we need new transparency to prevent “dark-monied” interests from funding third party advertising campaigns aimed at influencing election outcomes outside of the formal campaign period.
Making political contributions transparent
The Clark government would have voters believe that its new law requiring more frequent disclosure of financial contributions will provide more transparency. As I argued above and in my previous installments, that’s nonsense. Nor is it even groundbreaking.
While it is true that most other Canadian jurisdictions only require annual financial disclosures, the federal government and Ontario both already require more frequent disclosures.
As the chief electoral officer has reported, political contributions totalling more than $100 in a year must be reported to Elections Ontario within 10 business days of depositing the contribution in the party or contestant’s bank account.
But here’s the catch.
“There is no legislated deadline by which the contribution must be deposited in the bank account.” And then after those contributions are reported, Elections Ontario has a further 10 business days to publish the information in its publicly accessible electronic disclosure database.
It will be interesting to see if the Clark government’s new law specifies hard timelines for depositing contributions and what its total comparative timeline will be for public disclosure.
Regardless, simply disclosing what is already annually reported will not make B.C.’s largely secretive campaign finance system any more transparent.
Democracy Watch has suggested a raft of measures to improve transparency in campaign financing and to close the many loopholes that allow donors to legally hide their contributions.
Putting Elections B.C. in charge of processing all political contributions would do much to ensure the transparency of donations in the form of cash or “volunteer labour” paid for by third parties.
New rules should also be put in place to improve the transparency of party loans and trusts, which should also be carefully monitored and publicized by Elections B.C.
Banning corporate and union donations would eliminate many of the biggest problems in one fell swoop. It would get rid of the disclosure challenges associated with numbered companies and with other entities that legally mask the underlying funding sources of their donations.
All party fundraisers should be required to be held in public. No more backroom soirées. No more private “cash-for-access” events. And the names of those responsible for purchasing the tickets to those events should be publicly disclosed via Elections B.C.
If my suggested contribution limits were adopted, no one could buy more than $1,000 worth of fundraiser tickets a year for any party. Ditto for fundraiser tickets aimed at helping its candidates, constituency associations, or leadership contestants. Given the price of many fundraisers these days, that wouldn’t allow much wriggle room for multiple ticket purchases.
As I argued above, we should also increase transparency in publicly funded political contributions, whether they are provided via tax expenditures, as tax credits to individuals, or via budgeted appropriations, as I am suggesting.
It is not clear whether the NDP would eliminate the political contribution tax credit as part of its plan to ban corporate and union donations and to tackle campaign finance reform. Let’s assume it would retain them.
The government defines tax expenditures as “the reduction in revenues from delivering government programs or benefits through the tax system”. The current political contribution tax credit is a tax expenditure.
As every provincial budget notes,
“There are, however, several potential drawbacks to tax expenditure programs. First, their overall cost often receives less public scrutiny than is the case for spending programs because annual budget appropriations by the legislature are not typically required. Second, tax expenditure programs do not always effectively target those who are intended to benefit from them. Some tax expenditure programs that are intended to provide tax relief for lower-income earners may, in reality, confer the greatest benefit on higher-income earners who pay the most taxes. Finally, costs are often more difficult to control under a tax expenditure program because the benefits tend to be more open-ended and enforcement is often more difficult than for spending programs.”
All tax expenditures should be annually debated as part of the budget approval process and specifically authorized or rejected by separate votes in the legislature, just as major expenditures are authorized and voted upon in the Estimates process.
That could easily be accomplished with a single bill that allows the legislature to confirm, reject, or amend any revenue measure constituting a tax expenditure that has been elsewhere authorized by law.
The mining industry gives the B.C. Liberals a small fortune in political donations. Maybe the legislature should debate why it also gets a mining exploration tax credit that costs taxpayers $40 million in foregone revenue every year.
Maybe the legisalture should debate why the mining industry’s wealthy investors also enjoy a mining “flow-through” share tax credit, which reduces their income tax.
That sweet little tax expenditure will cost B.C. taxpayers $10 million this year. It was supposed to be a “temporary” benefit that “only” cost $4 million in 2011, but like a bad toothache, it has only hurt taxpayers more and more, year after year.
Those two tax expenditures are mostly going to pad the profits of large mining companies and to reduce the income tax burden of those who are wealthy enough to invest in mining and mineral exploration.
If we cut or reduced them, we could easily find more than enough money to put all parties on a fair and equitable financial footing that doesn’t rely on Big Money, without adding one penny to taxpayers’ existing net burden.
Similarly, if we are going to continue to provide political contribution tax credits that offer millions of dollars in tax expenditure subsidies, to help parties generate cash for themselves, we should demand that those gifts of public money are openly debated and approved each year in the legislature.
If that happened, maybe those tax credits would be limited to people who fall below a certain threshold of net taxable income. At a minimum, maybe we would know how much each of the parties effectively received from those benefits.
After all, the people claiming those tax credits are only provided their tax receipts because they make donations to specific parties. The parties have to report those tax-receipted contributions to Elections B.C. It would not be hard to estimate the distributed value to those parties of the tax credits that are associated with those contributions.
Finally, the abuse of government advertising also poses a problem for transparency that additionally masks the resources that the governing party has at its disposal for electioneering.
In each of the last two elections, the Clark government has lied about its intended pre-election advertising plans and expenditures when it tables the budget. It has just taken whatever it wanted after the fact, from its “contingency” budget, to pay for those multimillion dollar ads that are now filling our airwaves.
That is completely contrary to the rules for the use of that contingency funding. The stated purpose of that annual appropriation is to “accommodate the financial consequences of unanticipated events and contingent events…that could not be reasonably anticipated when the budget was prepared”.
It seems inconceivable that the Clark government wasn’t planning all along to run the type of multimillion-dollar political ad campaigns it launched in 2013 on the eve of that general election. And it’s even harder to believe it didn’t fully anticipate the costs of repeating that tactic as it now doing in 2017, only weeks before the writ is dropped.
And that’s wrong.
Making solicitation transparent
In Quebec, only those who are officially designated as the parties’ official representative or who is designated by them in writing may solicit political contributions. Any such authorized person must hold a “certificate of solicitor” and must show it to anyone who asks to see it.
Further, as part of their financial reports, the parties have to send the directeur général des élections du Québec the list of solicitors designated during the year. Those individuals’ names are not public in Quebec.
We should adopt a similar protocol under the Act in British Columbia, although I would also suggest that the names of the parties designated solicitors should all be publicized. If only so that their “targets” could see them coming.
All of the parties’ fundraising letters, emails, and other broadly disseminated appeals for contributions should be filed with Elections B.C. and also publicized in “real time,” as Christy Clark might say. Same for the fundraising scripts used by telemarketers and in “robo calls”.
Certainly the names of the individuals who sit on the parties’ finance committees should be reported to Elections B.C. and publicly posted. The people serving on those bodies that are formulating solicitation strategies and are most responsible for meeting the leaders’ fundraising targets should be proactively identified.
That will be especially important in any new regime that bans corporate and union donations, as the influence those individuals carry, by dint of their unique “volunteer” services, will become ever more extraordinary.
In a world where parties can no longer count on Big Money to pad their wallets, the people who step forward to help them reach into more donors’ pockets will become an increasingly valued commodity.
We might well move from today’s pay-to-play model to a new order of play-to-pay that is equally beneficial to the politicians who will find it harder to raise cash for their parties and for their own election efforts.
The lesson is, it is not just giving money that leverages access that leverages special influence, it is also the act of helping politicians and parties to get the money they seek and need to get elected.
Making Dark Money transparent
In my previous installment I dealt at length with the problem of Dark Money: political funding that is anonymously contributed to finance third-party electioneering and that is not subject to disclosure requirements.
I call shell entities like Future Prosperity B.C. and the teeny NDP attack squad that goes by the name of Concerned Citizens for B.C. dark-monied campaigns, to the extent that no one knows who is funding them.
These types of shadow “organizations” are really surrogates for political parties. They come and go with each campaign. They only exist to influence how people vote and to influence election outcomes.
And they raise and spend gobs of money to do that, as we are now seeing with the television and newspaper attack ads that employ Trumpian-style “fake news” and “alternate facts” to spread lies, fear, and anger.
Anyone can contribute unlimited amounts of money to those types of efforts, without any requirement for disclosure, as long as those entities opt not to become an authorized sponsor of election advertising during the formal campaign.
How much foreign money might be going into those political attack ads to influence British Columbia’s elections is anyone’s guess. But it’s dead wrong.
Which wealthy donors or companies are funding those efforts is a dark secret.
Those campaigns are deeply “dark” in their construct, content, and tone. They exist to mask donors’ identities and to provide “safety in numbers” to those who either don’t want to be seen giving to, or openly supporting parties, or who have already given so much to them that it’s embarrassing.
We need to shine a powerful light on those entities, whether or not the courts ultimately uphold the new restrictions on third party pre-election advertising that Ontario has legislated. Which, by the way, also entail disclosure requirements that frustrate Dark Money.
We should amend the Election Act to include a new definition of “electioneering” that would be broad enough to cover such activities.
The U.S. Federal Election Commission defines “electioneering communication” as any broadcast, cable or satellite communication that “refers to a clearly identified federal candidate”, that is “publicly distributed by a television station, radio station, cable television system or satellite system for a fee”, and that “is distributed within 60 days prior to a general election”.
I would adopt that definition, changing the specified timeline to six months prior to a set general election date.
Any individual, group or entity that engages in such activities—including political activist groups—should be obliged to disclose the cost of those campaigns, the names of their funding sources, and the amounts given by each of those “electioneering contributors”.
That information should also be reported to Elections B.C. and publicly posted in Clarkian “real time,” so that we end the threat of Dark Money in British Columbia before it becomes an even bigger problem than it already is.
We shouldn’t want foreign, corporate, or other interests that might be disqualified from making political donations, if we are successful in banning Big Money, to do an “end run” by trying to influence our elections via third party campaigns that are funded with their Dark Money.
The current campaign finance regime is ethically blind. That needs to change.
We need to outlaw political government advertising, as NDP MLA Gary Holman’s private member's bill proposes, to stop any governing party from using the public purse as its own private, partisan war chest.
Spending $15 million on political advertising to get re-elected, as the Clark government did in 2013, and is doing once again in 2017, is utterly unethical.
It’s disgusting, actually.
And it is to all British Columbians’ great shame that we have tolerated that type of abuse for so long. As if we can’t demand better of the people we elect to serve the public interest.
Holman’s bill would largely mirror the legislation that Ontario had previously adopted to ban political advertising in government in accordance with set standards. Sadly, the Ontario Liberals have since abandoned that regime.
It would require all government ads to be reviewed and approved by the auditor general before they are published.
We could quibble over whether the auditor general is the right person to vet government ads. I think the conflict of interest commissioner would be more appropriate. Especially if that independent officer’s role is expanded as I suggest below, to also cover ethical conduct.
I don’t think that the Auditor General should be in the business of effectively governing. That office is, and should remain, an independent adviser to government and to the legislative assembly.
The conflict commissioner, by contrast, does preside over the conduct of elected members. His mandate should be extended to include ethics and the ethical conduct of senior officials working for government.
Properly empowered, that individual is the most appropriate vetting authority for government ads that should be ethically and legally constrained in their intended purpose, form, and content.
Regardless, the basic idea is great. It would go a long way toward preventing the abuse of public spending and government advertising that administrations of all political stripes have routinely practised, especially in election years.
Holman’s bill would also prohibit nonessential government advertising during the four months preceding a general election. Essentially that would restore and legislate the policy that the Campbell government put in place in December 2008, which the Clark government subsequently abandoned.
No government has ever spent the tens of millions of dollars on pre-election political advertising that the Clark government has perpetrated to buy taxpayers’ support with their own money.
As I said, the amount it is wasting on those ads alone is far more than the extra amount of public funding that would ever be required in an election year to adopt a fairer, more transparent, and far more ethical system of party financing.
Ending that abuse is a no-brainer.
The broader imperative is to add ethics to the Members’ Conflict of Interest Act.
Way back in 2012-13, the conflict commissioner made several recommendations to improve the act.
This was his first recommendation:
“That an ethics and integrity dimension be formally recorded in the Act, so that it will be reframed to extend beyond pure “conflict of interest” issues. The Act should be amended as follows:
- Articulate the ethical standards which members are expected to meet in an enforceable provision;
- Add a purpose clause that affirms members’ commitment to integrity and ethical conduct;
- Rename the Act to reflect the enhanced focus on ethics and integrity; and
- Change the Commissioner’s title accordingly (e.g. Members’ Ethics and Conflict of Interest Act/Ethics and Conflict of Interest Commissioner).”
The commissioner explained that British Columbia is one of the few jurisdictions that have no law covering members’ integrity and ethical behaviour. “As it stands, there is no recourse when a member’s conduct is ethically questionable but does not breach an existing provision in the Act.”
Members’ fundraising activities are largely an ethical issue. They fall outside of existing conflict of interest provisions that are mostly aimed at preventing MLAs from using their official positions and power for private benefits.
There is no law governing the ethics of who asks for political contributions or how politicians and political staffers play into that equation.
There is no law that allows the conflict commissioner to preside over other matters of conduct relating to campaign finance that all the world might view as self-evident conflicts of interest; but that successive conflict commissioners have determined are actually ethical questions, which fall outside their legal purview.
We need to change that.
It is apparently not a technical conflict of interest for premier Clark to have accepted a $50,000 annual “top-up” salary from the B.C. Liberal party that is at least partially funded by donors who shell out $20,000 to bend her ear at private cash-for-access fundraisers.
But in the eyes of most British Columbians, it is ethically repugnant.
It is not ethical for anyone in government or in an elected office to ask corporations and lobbyists—who are often large party donors—to contribute gifts and prizes. Not for office golf tournaments. And not as “swag” for people attending government events and functions, including elected members and public servants. Yet it happens.
It is not ethical for any premier or cabinet minister to privately solicit political donations from the people and entities they regulate, from those who are in a subordinate position, or from those who stand to indirectly benefit or suffer from government decisions or actions.
It is not ethical for MLAs, political staffers, and other partisans, who are in positions of influence, to immediately leave public office and go to work as lobbyists or as direct employees of the very entities they in some way presided over, in their previous capacities.
Particularly if they or their parties have asked those people for political contributions—which is today a deep, dark secret.
All of these and other such brutally apparent ethical conflicts should be spelled out in law and expressly forbidden under a broadened Members’ Ethics and Conflict of Interest Act.
Registered lobbyists have a statutory duty disclose who they have targeted to lobby. Anyone serving in government who solicits political funding from others should have a similar duty to disclose who they actually approached for money, if not the names of their prospective targets.
To be fair, several opposition members have identified a number of these issues for action.
Independent MLA Huntington’s private member's bill would prohibit anyone in cabinet, the premier’s office, or working in a ministerial office, from attending a fundraising function, from personally soliciting political contributions, or from inviting an individual or organization to attend a fundraising function.
That might go too far, but its intent is laudable. We should instead require that the classes of people that Huntington identifies cannot attend secret “pay-to-play” fundraisers, regardless of their ticket price.
All such events attended by those in positions of influence should be held in public venues and anyone attending them who works in those public capacities should have to report their attendance to ethics and conflict of interest commissioner.
Horgan’s Get Big Money Out Of Politics Act would prevent the premier and cabinet ministers from accepting a salary or stipend from any source outside of their public compensation.
That’s great. I would extend that restriction to all elected members. In the 21st century, being an MLA should be regarded as a full-time job that is handsomely compensated. No one should be allowed to “double dip” by also moonlighting for pay in other capacities. It’s just not ethical, I say.
Other changes are needed.
A new Members’ Ethics and Conflict of Interest Act should also give the commissioner jurisdiction over unelected “public office holders”.
It should include binding post-employment rules, including for MLAs, senior political staffers, and senior public servants, to ensure that none of them are lured to lucrative positions by companies and other entities that might stand to benefit from the decisions and policies influenced by those individuals.
The act should explicitly prohibit any member from improperly furthering the private interest of another person or entity, including by using and communicating insider information, or by using his or her office to influence or attempt to influence a decision.
It should prohibit any member from attempting to influence a matter that is the subject of a conflict of interest, or from taking actions that are intended to evade or circumvent their obligations under the act.
The commissioner specifically asked for all of those improvements, to no avail. The current act does none of those things.
Those needed changes speak to ethical grey areas that also touch on the relationships between public office holders’ exercise of influence and power, and their parties’ fundraising activities. It’s a “black hole” in the law that countenances no legal avenue for the commissioner’s inspection.
Similarly, the Lobbyists Registration Act needs to be strengthened, as the former registrar recommended over three years ago.
She urged the government to adopt five specific improvements. None of them were acted upon.
The registrar wanted to replace the existing requirement for registered lobbyists to list who they expect to lobby, with a new requirement that obliges them to report who they have actually lobbied. And also, to update that information within a month of whenever any new lobbying activity takes place.
That would allow all British Columbians to get a much better picture of any correlation that might exist between contributions made by lobbyists or their clients to political parties, and the decisions made by government and the policies adopted by parties.
Similar to the conflict commissioner, the registrar of lobbyists also recommended putting in place new post-employment restrictions.
She wanted to require that, “for a period of 12 months after they leave office, former public office holders as defined by the LRA refrain from lobbying the agency where they worked during the last 12 months of employment as public officials and from lobbying on matters they engaged during the last 12 months of their employment as public officials.”
Again, the Clark government has refused to make that amendment.
Ethical conduct in lobbying is central to campaign finance reform. Lobbyists give lots of money to the parties and will continue to do so, even if individual contribution limits are imposed, as they should be.
The whole point of lobbying is to influence political decision-makers, government policies, laws, and regulations.
At the root of that is ethics and ethical conduct. It can’t be divorced from the lobbyists who give to parties, who provide “voluntary” services and strategic advice, and whose stock and trade is building special relationships with partisans and public officer holders.
We should enhance ethical conduct in lobbying in B.C., as part of a broader approach to campaign finance reform.
To that end, we would do well to heed the Organization for Economic Co-operation and Development’s recommendations for strengthening transparency and integrity in lobbying.
As the OECD says, “Effective rules and guidelines for transparency and integrity in lobbying should be an integral part of the wider policy and regulatory framework that sets the standards for good public governance … This includes … rules on political parties and election campaign financing, codes of conduct for public officials and lobbyists, mechanisms for keeping regulatory and supervisory authorities accountable and effective provisions against illicit influencing.”
The changes I have suggested to make the solicitation of political contributions more transparent would also help to introduce a level of ethical conduct that is today sorely lacking.
Strengthening compliance and enforcement
If the current RCMP investigation in the Globe and Mail’s recent revelations about lobbyists tell us anything, it is that campaign finance compliance and enforcement is presently a very sick puppy.
It is a condition that is eerily reminiscent of the problems unearthed in the housing and real estate industry, including by the Globe’s Tomlinson. Only when the authorities’ lax compliance and enforcement of long-tolerated abuses was exposed did the politicians suddenly feel motivated to do anything about it.
Similarly, Elections B.C. is under-resourced for its obligations to enforce the Act. Public funding for parties aside, the budget for Elections B.C. is woefully inadequate to protect the public interest. Least of all with the added enforcement powers granted in 2008.
Compliance audits need to be conducted as a matter of course in ensuring that all parties and all of their constituencies and candidates follow the law. Simply relying on the parties’ privately audited reports isn’t good enough.
It should not take an investigative report by the Globe and Mail to unearth a problem of potentially widespread abuse and/or illegal activity that, frankly, Elections B.C. should have long ago identified, prevented, and properly punished.
The penalties for violations of the Elections Act also need to be increased.
Currently, any offence in relation to election financing under sec. 23 of the Act is liable to a fine of not more than $10,000 or a maximum one-year jail sentence, or both.
That’s a joke.
No one ever gets sent to jail for such Election Act breaches in B.C. A maximum $10,000 fine is small potatoes for donors that are in some cases contributing hundreds of thousands of dollars, or even millions to parties and candidates.
The penalty for providing false or misleading information under sec. 266 is twice as high, at $20,000 or imprisonment of no longer than two years, or both. But even that isn’t sufficiently punitive for parties or donors with deep pockets, who well know that the law is a toothless tiger, because enforcement is so sorely lacking.
Moreover, it provides that “An individual or organization is not guilty of an offence…if, at the time the information was given or the statement or declaration was made, the individual or organization did not know that it was false or misleading and, with the exercise of reasonable diligence, could not have known that it was false or misleading.”
I’m sure we will be hearing much more about that escape valve as the RCMP continues its investigation into the Globe and Mail’s recent findings on potential campaign finance infractions.
A review of penalties imposed in other western democracies should be commissioned by Elections B.C. and specific penalties should be introduced that are specific to the nature of each infraction.
“One size fits all” doesn’t work if the penalties are not great enough to ensure compliance. No penalties matter much if would-be abusers know they will never be enforced.
To that point, the chief electoral officer’s enforcement powers need to be substantially strengthened.
He doesn’t have even remotely the scope of authority for enforcement that Alberta provides its chief electoral officer under its Election Finances and Contributions Disclosure Act. We should immediately remedy that.
Banning Big Money would eliminate nine-tenths of the problem.
Beyond that, if all political contributions were paid to parties through Elections B.C., as I have recommended, it would be up to that independent agency to ensure that all donors were meeting the letter of the law.
Their citizenship and voting eligibility would be checked and confirmed as a precondition for the acceptance of any donations.
The annual contribution limits would be enforced by Elections B.C. It would be accountable for ensuring that no one gives more than they are legally allowed to give by using different names.
Those donors should have to attest to Elections B.C. in making their contributions that they are aware of the law and are in compliance with it.
Alberta’s Act prescribes “A prospective contributor is responsible for ensuring, before making a contribution under this Act, that the contributor is not prohibited from making a contribution and is not making a contribution that is in excess of the limit prescribed.”
B.C.’s Act has no such provision. It only specifies that “On request by the chief electoral officer, a contributor must file with the chief electoral officer a solemn declaration that the contributor has not contravened this Part”—meaning the proper reporting of all donations.
Clearly that provision didn’t come into play in preventing the types of abuses that the RCMP is now investigating, months and years after the fact.
The law does prescribe that any political contribution or its equivalent value that was made or accepted in contravention of the Act, must be returned to the contributor within 30 days after the financial agent becomes aware of the contravention.
If the Globe’s story is borne out, that could potentially oblige the B.C. Liberals and the NDP to return perhaps hundreds of thousands of dollars in illegally contributed indirect donations, which were made and accepted over the last many years.
Will that happen in the next 30 days? Dream on.
The chief electoral officer has suggested numerous amendments to strengthen enforcement.
For example, in 2010 he requested an amendment to give him the power to actually collect penalties imposed on election advertising sponsors that exceed advertising limits. The Clark government still hasn’t legislated that change, which would technically allow him to file certificates with the B.C. Supreme Court that allow those types of penalties to even be collected.
More to the point, if anyone has broken the law in contributing to any political party, they should be caught and prosecuted. A lack of Elections B.C. and/or policing resources should not be a barrier to that imperative.
Frankly, it’s not good enough to throw up our hands and say, well, let’s just fix the problem going forward. We obviously need to do that, but we also need to ensure that no one is allowed to break the campaign finance rules with virtual impunity.
Pleading ignorance of the law is not an excuse. Tacit approval of unlawful activities by individuals, employers, or parties should not be dismissed as something minor. Not when it is our democracy and the democratic rights of all citizens that those actions also tacitly undermine.
This passage from the chief electoral officer’s 2010 report describes just how lacking the law currently is in terms of its powers of enforcement.
"In 2008 the Election Act was amended to establish a positive duty for the chief electoral officer to enforce the Act. All financial penalties under the offences provisions of the Act were doubled. However, the chief electoral officer was not provided with any additional administrative penalties to deal with contraventions of the Act. Offences under the Act are criminal offences and it is usually difficult to proceed with a prosecution of offences under the Act, even with an admission of guilt.
"Consideration could be given to providing the CEO with the ability to impose administrative penalties such as fines and the authority to enter into compliance agreements with individuals or organizations who have contravened some provisions of the Act. These new powers should be confined to instances where there is abundant proof and admission of guilt, such as conducting election advertising without being registered, failing to have the required disclosure statement on election advertising, filing a false or misleading report, campaigning too near a voting place, failure to comply with the legislated obligations of a financial agent, etc."
That advice was rendered seven years ago, and still, nothing has been done. The B.C. Liberals were obviously all too comfortable with the status quo.
They have sat on their hands to protect their proverbial wallets. They have failed to legislate the very types of meaningful compliance and enforcement powers that might have prevented, or at least efficiently punished, the sort of alleged campaign finance abuses that are now the subject of a police investigation.
Finally, we should also act on the conflict commissioner’s recommendation to increase the maximum fine the commissioner can recommend for violations of the Members’ Conflict of Interest Act from $5,000 to $20,000.
That would be doubly important if we broadened the Act’s scope to include issues of ethical conduct that directly relate to campaign financing, and to the unspoken influence that political donors actually have, by virtue of their special relationships and unique contributions.
If we acted on all of the above five steps for meaningful campaign finance reform, British Columbia would once again be a leader in Canada, instead of the global laggard that it is today.