Technical difficulties

The Libs appear to have properly concluded that they can't simply start up a new riding association in Mississauga-Streetsville to walk away from debts owed to Wajid Khan's dealership. But there's new reason to wonder whether the national party, along with another riding which managed to elect an MP, has been asleep at the switch over the past year:

The Ontario Liberal president also confirmed another Toronto riding - Beaches-East York - has been deregistered by Elections Canada. He said it was for a technical breach of the rules that does not compare with the Mississauga case.

"I believe it's a matter that's just being worked out with the financial agent, and I believe it's something that's going to be resolved in short order," said Crawley.

Yes, that would be the same riding where the Libs' critic for the Status of Women narrowly managed to hang onto her seat against a strong challenge from Marilyn Churley in 2006. Which means that there's no reason why the riding association should have been anything but active over the past year-plus...and makes even a "technical breach" seem rather problematic.

Update: CTV reports that the problems with riding associations aren't limited to the Libs alone, though unless there's some glaring omission from the story it looks like Minna is the only sitting MP whose current riding association was de-registered:

Twenty-seven riding associations have been deregistered by Elections Canada, including three Liberal associations, two NDP associations, a few fringe party associations and a host of Green Party associations. Failure to file financial reports is cited as the reason for delisting in a number of cases, including Liberal MP Maria Minna's Toronto association.

Easily exploited

The Globe and Mail follows up on the status of the Libs' riding association in Mississauga-Streetsville. And while NDP MP Pat Martin is rightly concerned about the loopholes exploited by Wajid Khan while he ran the show, it looks like the Libs themselves plan on making use of an even bigger one:

The Liberal Party said it would create a new riding association in Mississauga-Streetsville. Party officials said the new entity will not carry any outstanding debt from Mr. Khan's time, saying he has to settle the matter with his former financial agent.

Liberal president Marie Poulin said Mr. Khan's outstanding debts are not the responsibility of the Liberal Party.

“We have no intention of helping Mr. Khan to raise funds to pay his debt. Not at all,” Ms. Poulin said.

She said the Liberal Party has no information on the size of the remaining debt, and that the party was unaware that the association was late in filing its returns to Elections Canada.

Poulin's statement confirms my suspicion that the Libs utterly failed to look into the status of their riding association once Khan's departure became a likely scenario. But regardless of how the Libs got into their current mess, their way out of it looks even more problematic: as dangerous a loophole as Khan seems to have exploited, it's even more worrisome where a riding association and its debts can simply be disavowed by a party.

After all, there are many ways in which a riding association can be deregistered - either involuntarily where the association fails to meet its obligations under the Canada Elections Act as in the present case, or by party request. In the latter case, the Chief Electoral Officer doesn't even seem to have any scope to look into the circumstances behind the deregistration.

As a result, it would seem fairly simple for a party to create riding associations with no intention of preserving them, arrange for the associations to take out loans on commercial terms from entities who would be willing to donate the money otherwise, use that money for electoral purposes, allow the riding association to lapse, then form a new one to start the cycle again. A single financial agent would be left with the responsibility of filing a return for the defunct association, but it's not clear that anybody would hold any obligation to actually repay any money owing if the party is able to wash its hands of the mess.

In fairness, the Libs' apparent plans don't rise to anywhere near that scale, and it seems safe to say there was no intention not to repay any loans until Khan's departure. But the precedent is one that could easily set the stage for the worst-case scenario to become commonplace in the future. And if the Libs are willing to let their understandable anger with Khan serve as an example of how to subvert the Canada Elections Act, the result could be harmful for both the Libs as a party and Canada's electoral system as a whole.