On services rendered

It looks like Walkswithcoffee was right on target in commenting on this post about Conadscam, as other in-and-out transactions are being called into question for what looks like good reason. With that in mind, let's note the two major issues raised by the latest allegations.

First, as discussed by Cameron, is the question of substantial transactions being dated after the election itself. It would seem obvious that the intention of allowing candidates time after an election to supply their returns would be to permit the inclusion of transactions legitimately related to the election which were overlooked initially - not to allow them to throw money back and forth to try to change the substance of how money was actually spent.

Indeed, the potential for abuse if the situation were otherwise would be obvious. Remember that each party may only be reimbursed for local expenses in a riding where it obtains 10% of the vote: if expenses could legitimately be reallocated after the fact, then parties would be able to rig up transfers after the vote takes place to make sure all their expenses took place in ridings where that threshold was achieved.

Second is the question of Elections Canada rebates - and it's here that there may be an important distinction compared to Conadscam as discussed so far. To date, the major issue with the Cons' ad expenses was the level at which expenditures were claimed: money which was in reality spent at the national level was claimed at the local level in an effort to circumvent the national expense limits.

In other words, Conadscam involved the Cons pretending that a single transaction took place between riding associations and suppliers rather than the national party and suppliers. That would result in a higher level of rebate (60% at the riding level rather than 50% at the national level), but there's no indication that the rebate was the primary motivating factor - and certainly the potential for rebate abuse is relatively small compared to the dangers associated with exceeding the expenditure limits.

In contrast, today's allegations present the first serious question about double-dipping when it comes to rebates. In effect, the allegation is that the Cons first spent national money on polling from a third-party supplier, presumably claiming that amount at the 50% rebate level. Then, the Cons' national party would bill riding associations for providing the same poll - securing a 60% rebate at the riding level without adding any additional service into the mix.

Which means that if the amount charged to the riding associations matched the amount originally spent, the Cons would receive $1.10 back for every dollar originally spent on polling. (And of course there's no particular reason why the amounts couldn't have been inflated even further by increasing the amount charged at the riding level.)

Now, the issues involved in the polling scheme are largely the opposite of those raised by Conadscam: the scheme would actually boost the amount spent under the election spending caps for the purpose of inflating the available rebates.

But that's where the timing may be particularly significant. A campaign coordinating both kinds of schemes could shuffle money around ala Conadscam to leave itself the ability to spend beyond any limit applicable during the campaign, then transfer money around after the election was done with to maximize the available rebates once the limits were no longer a concern.

We'll see if the new in-and-out scheme is laid out by the same kind of damning evidence already available when it comes to Conadscam. But for now, it looks like the Cons' 2006 campaign was planned to make a mockery of Canada's election rules - which would offer plenty of reason for Elections Canada to keep the Cons under the microscope.

(Edit: typo.)