Tough new rules hamper fundraising by Liberals

The finance laws are Chretien's revenge on the party that dumped him

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The Gazette, Monday, August 7, 2006

Spending for the Liberal leadership race is capped at $3.4 million per candidate. But the party managers needn't worry about anyone breaking the rules. Everyone is clearly handcuffed by them.

By the end of June, essentially the halfway point of the leadership race, all 11 candidates combined hadn't raised anywhere near $3.4 million. All of them together had raised less than $1.1 million.

The perceived front-runner, Michael Ignatieff, had raised only $294,000 from 525 donors. Bob Rae had raised the most money, $385,000 from 209 donors. And Joe Volpe, with a little help from his friends and their children, had raised $210,000 from 91 donors. Gerard Kennedy had raised $103,000 from 142 donors. Scott Brison had raised $100,000 from 112 donors; Carolyn Bennett $65,000 from 37 donors, Ken Dryden $43,000 from 67 donors; Stephane Dion $32,000 from 65 donors, Maurizio Bevilacqua $26,000 from nine donors and Hedy Fry $15,000 from 15 donors.

Nobody's going to be chartering any executive jets in this campaign. Ken Dryden's 43 grand wouldn't pay for a poll. Hedy Fry's 15K wouldn't even pay the cellphone bill.

This is the party that, in the 2003 leadership race, was awash in cash. The Paul Martin leadership campaign raised and spent $12 million, effectively freezing everyone else out of the race.

John Manley dropped out five months before the convention when he realized he was short of cold cash and warm bodies, both required commodities for leadership races. But even he had spent more than $2 million by then, and he was looking at $5 million just to finish a bad second.

At this rate, no one who finishes this race will spend as much as Manley did before quitting halfway through the last one.

What's the difference? For one thing, the Liberals were a party in government and Martin was a prime minister in waiting in 2003. It's much easier to raise money for someone who is certain to become prime minister than for someone who might become leader of the opposition.

Then there was a poisoned pill called Bill C-24 that Jean Chretien left as a farewell gift to his own party in 2003.

Anxious to alleviate the damage done by the sponsorship scandal, Chretien pushed through a campaign-finance reform similar to the Levesque government's 1977 Popular Financing Law, all but banning corporate and union donations, limiting personal donations to $5,000 a year and, for the first time, including leadership campaigns within these limits.

In return for accepting these restrictions, parties would receive $1.75 per vote per year from the previous election up to the next one. That worked for the NDP, since unions are notoriously cheap anyway. It worked for the Bloc Quebecois, since they were being paid millions by the federal treasury to finance their campaigns to break up the country.

The Conservatives didn't have a problem with it, since they are the party of the church plate, direct mail and, now, Internet fundraising. They have, by far, the most individual contributors of any party.

It was the Liberals for whom C-24 presented hardships, because they were the party of corporate financing, famous for the $5,000-a-table dinner. At one cocktail gathering in Montreal in 2003, the Martin campaign charged 1,000 people $1,000 a head, and raised a million dollars, just like that.

And no party, until now, has ever had to live with such restrictions in a leadership campaign. And it will only become more difficult when the Harper government's Accountability Act kicks in with the new limit of $1,000 individual contributions to the party and $1,000 to the candidate.

Memo to candidates: Get your $5,000 donations while you can, because the new limits will take effect the moment the governor-general signs the bill into law. In fairness to the Liberals, C-24 should be grandfathered, because the rules are being changed in the middle of the game.

One of the reasons Belinda Stronach decided to give the race a pass was that she wouldn't have been allowed to donate more than $5,000 of her own money to her campaign. She would have utilized a high-powered team of campaign consultants, but she couldn't have paid them.

These are the consequences of excessive zeal in campaign finance reform. You can't run a leadership campaign without money, which means there are bound to be abuses of cash under the table, the very sort of thing these reforms were meant to avoid.

In a way, it's Chretien's revenge on the party for showing him the door.

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