Friday, January 19, 2007

Just wondering...

Following up on the need for rules to ensure that "loans" can't completely undermine Canada's election financing laws, CanWest's coverage discusses the seeming contradiction in the current rules:
Elections Canada earlier confirmed any campaign loan or a loan to a riding association can be written off by the lender if the 18-month deadline for repayment passes.

A section of the Canada Elections Act says such a loan would be considered a donation if not repaid by the deadline. In Khan’s case, the donations would be illegal because of their amount. Even prior to the passage of the Accountability Act last December, unions and businesses were limited to donations totalling $1,000 a year.

But an Elections Canada spokesman pointed out a subsequent clause in the act says loans are not considered contributions if they have been “written off by the creditor as an uncollectible debt in accordance with the creditor’s normal accounting practices.”
Which leads me to wonder: who besides a commercial lender (or at least a business of some sort, though that might well validate Khan's loans) can realistically be said to deal with "uncollectible debt(s) accordance with the creditor's normal accounting practices"? Using some of the Libs' leadership loans as an example, how would one go about defining how Rod Bryden "normally accounts" for loans such as that to Stephane Dion, or how forcefully Ken Dryden should pursue himself to determine that his debt is uncollectible?

While the questions sound absurd, the answers actually do matter. Based on the interaction of the provisions mentioned in the above article, I don't see how one can reach the conclusion that there's no scope for prosecution based on loans which are written off without being appropriately pursued. But Elections Canada unfortunately seems to be avoiding the question of where the line should be drawn - with the effect of making the loophole far bigger than it has to be.

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