A simple fix

The Globe and Mail reports on another serious loophole in election financing enforcement. But it seems like there should be some relatively simple solutions if Parliament is willing to deal with the issue constructively:

Any Canadian could exceed by more than $60,000 the legal donation to a political party under a loophole discovered by The Globe and Mail.

Elections Canada confirmed yesterday that an individual could theoretically contribute $199.99 to each of the party's 308 riding associations across the country - a total of $61,596.92 - without attracting anyone's attention.

That's because parties are required to inform Elections Canada only of individual donations of $200 or more. Smaller donations to riding associations are lumped together, with no breakdown for cross-checking...

John Enright, a spokesman for Elections Canada, said the agency cannot keep track of donations below $200 because "we do not get the receipts" from the individual riding associations...

Mr. Enright also insisted that making donations beyond the maximum limit remains illegal.

"Anybody who gives over and beyond [the limit] is breaking the spirit and the letter of the Canada Elections Act," he said.

Mr. Enright said that riding associations must keep the receipts they issue for all donations over $20 and would have to provide them to Elections Canada in the event of an investigation into a donor's activities.

This particular loophole is strictly one of enforcement rather than legality: for the moment, the data actually provided to Elections Canada doesn't provide it with sufficient information to determine what donations have been made between $25* and $200 in most cases. In principle, though, a systematic set of donations of $199.99 to each of a party's riding associations would hopefully set off some alarm bells (e.g. through a regular .99 showing up in total donations to a disproportionate number of ridings). And I presume there are also some circumstances where Elections Canada would end up reviewing a riding association's receipts for other purposes, which would also offer a strong hint if anybody was circumventing the donation limit.

That said, there's no reason why the issue shouldn't be fairly easily corrected. After all, with every riding association required to keep receipts for all donations over $25 anyway, it wouldn't seem particularly difficult from a legislative standpoint (or onerous for a riding association) to require all those receipts to be submitted to Elections Canada even if the donations don't then form part of the public donor database.

It's worth noting as well that another loophole exists for donations under $25: a party or riding association is required to track only a general description of the event where such an amount is received and the total amount donated, meaning that an individual can conceivably give an unlimited number of $20 donations without anything being traceable. (In principle, a $20 donation in each riding would put an individual well over the annual donation limit - though the more likely scenario would naturally be an individual donating multiple times at a single event.)

And of course, there's also the equally gaping (if more often discussed) loophole surrounding supporter loans.

Unfortunately, the area of political donations is one where both the Cons and Libs have seemed more interested in sniping at each other than in actually fixing obvious problems. But with so many obvious frailties in the current enforcement regime - and with all parties claiming to want to clean up Canadian politics - it will hopefully be possible to agree on how to improve the current system.

*Based on s. 404.4 of the Canada Elections Act as currently posted at CanLII. The Globe's article seems to hint that the standard has been moved to $20, but that change wouldn't affect the issues with the level at which anonymous donations are permitted.