Tories open an exploitable campaign finance loophole

The Progressive Conservatives appear to have flung open a backdoor way for unions and corporations to bankroll political parties with a loosening of campaign finance laws.

In the government’s fall economic statement, Finance Minister Vic Fedeli unveiled changes to election fundraising laws that the previous Liberal government had tightened after a Star probe in 2016.

“There will still be no corporate donations, there will still be no union donations,” Fedeli maintained Thursday.

However, buried deep in the 176-page Restoring Trust, Transparency and Account- ability Act, some loopholes have been reopened — perhaps inadvertently — just two years after they were closed.

Fedeli has repealed a key section of the electoral finance reform bill that forced donors to “certify, in a form approved by the Chief Electoral Officer, that the person has not acted contrary” to the ban on unions or corporations making donations in the name of members or employees.

“It’s a loophole you could drive a Brink’s truck through,” said one veteran Conservative fundraiser, who spoke on condition of anonymity because of his standing in the party.

A Liberal fundraising expert agreed Friday the change is something that all political parties could exploit.

“If you don’t fill out a disclosure form, then what’s to stop a corporation donating on your behalf?” the Liberal said.

“It was the only thing in the act that required any threshold of activity on behalf of a donor to prove that a corporation wasn’t funnelling money through the backdoor.

“I honestly don’t believe it was inadvertent — they just thought nobody would notice. What’s the public policy rationale for getting rid of the declaration?”

Premier Doug Ford’s office emphasized that “accepting money from a corporation or union and donating it as an individual would still be illegal,” but filling out the disclosure form was a nuisance.

“We think this requirement creates a barrier to lawful donations by placing an undue burden on contributors. But, it is important to understand that it would remain unlawful to donate funds that are not your own,” said Ford’s office.

“We would merely no longer require people to certify they are acting lawfully.”

The Tories’ changes match existing federal campaign laws.

Once the changes pass, a union or company could theoretically skirt the ban on making direct contributions by illegally giving members or employees cash that could then be donated.

Fedeli’s reforms will also end the public $2.71 per-vote subsidies for political parties in time for the 2022 election.

The governing Tories currently receive $6.3 million annually while the NDP gets $5.2 million, the Liberals about $3 million and the Greens about $700,000.

Privately, some Liberals, who had opposed Wynne’s reforms, are delighted that Fedeli is liberalizing campaign-finance laws.

By retaining the annual public subsidy until the next election, the finance minister has given the decimated Liberals, who have campaign debt of about $10 million, a chance to rebuild.