Edmonton Oilers owner Daryl Katz.Jimmy Jeong/The Canadian Press
A $430,000 "bulk donation" from a company controlled by Edmonton billionaire Daryl Katz and given to Alison Redford's cash-strapped Progressive Conservatives during last year's election campaign was not a violation of Alberta's $30,000 donation limit, an independent investigation has found.
The Premier and her long-governing Tories, as well as Mr. Katz, claimed vindication Wednesday after Elections Alberta published a nine-page report outlining how the Edmonton Oilers owner issued a large bank draft from his Katz Group Properties Inc., which amounted to a "brief" loan on behalf of a group of donors last spring. Receipts were issued to Mr. Katz's relatives, employees and their companies, and they "promptly and fully repaid" his firm, the report noted.
The ruling reopened the debate around Alberta's election-financing laws, which opposition parties and observers consider the weakest in the country. Alberta allows union and corporate financing, which is not permitted by Ottawa, Quebec or Manitoba, and Alberta's $30,000 contribution limit is much higher than most jurisdictions' ceilings, which range from $1,100 to $15,000. And, unlike most jurisdictions, Alberta has no spending limits.
"We've always had the worst elections finance rules and this just confirms it," Bill Moore-Kilgannon, executive director of Public Interest Alberta, said of the Katz donation ruling. "It's a sad day for democracy in Alberta."
Chief Electoral Officer Brian Fjeldheim, who is now retired, wrote that there was "no violation on the part of Daryl Katz," or of the PC party. However, Mr. Fjeldheim did find that one of the donors, Katz Group's chief financial officer, Paul Marcaccio, was an Ontario resident and therefore prohibited from contributing.
Mr. Marcaccio didn't contest the ruling and the Tories returned his $25,000 donation. No fine or prosecution was recommended, but a written reprimand was issued.
Ms. Redford's opponents have said the notion of a "bulk donation," which amounted to almost a third of the $1.5-million the PC Party raised during the campaign, violates the spirit of donation limits and could allow undue influence. Mr. Katz had been seeking $100-million from the province to fund his new arena project and the donation came during the dying days of the election campaign as the Tories were struggling in the polls against the Wildrose Party.
Speaking at an announcement in Calgary on Wednesday, Ms. Redford said that while Mr. Marcaccio's donation was "simply an honest mistake," there is nothing in the report to suggest "legality" was a concern overall.
"I'm pretty pleased with the news today," she said, adding. "I fully expect that now that we have spent this much time on this issue that we can move onto issues that actually matter to the province."
Mr. Marcaccio declined to comment, but Josh Pekarsky, a spokesman for Mr. Katz said, "We are very pleased this matter has been resolved and Mr. Katz has been vindicated."
The single-cheque donation for $430,000 was first revealed by The Globe and Mail in October, citing sources. That triggered the probe by Mr. Fjeldheim, who called in independent investigators to handle the case.
Lorne Gibson, Alberta's former chief electoral officer, who was considered more aggressive than Mr. Fjeldheim, his successor, said the probe appears thorough and the results "not entirely unexpected."
"I think, however, it points to the need for Alberta to further tighten its campaign finance laws to prevent the bundling of contributions," he said.
Mr. Gibson is also in favour of spending limits, allowing only contributions from people – not corporations, and lowering the donation ceiling "to prevent individuals from having an undue influence over the electoral process."
Wildrose Leader Danielle Smith also called for a ban on corporate donors and urged the Tories to return the remaining $405,000 of the bank draft calling it a violation of "the spirit and the intent of the law."
"Even if Elections Alberta doesn't see anything wrong with a single entity delivering hundreds of thousands of dollars to a party in this manner, Albertans certainly do," she said in a statement.
Liberal Leader Raj Sherman said "big money" has too much influence in Alberta politics and undermines confidence in the system.
NDP Leader Brian Mason, who said the case "just smells," also renewed his call to toughen election laws by banning corporate and union donations.
"Let's not forget Daryl Katz and his associates and his family members still contributed nearly half a million dollars to the Tories in the last days of the campaign," he said. "There may be a real perceived obligation on the part of the government that they have to give something back."
The report notes that Mr. Katz contacted a Tory fundraiser, Barry Heck, on April 10, 2012. Mr. Katz "agreed to collect funds through business associates and friends" for the party.
The PCs – including Robert Hawkes, a political aide to Ms. Redford who was also her first husband – and Mr. Katz considered gathering a "collection of certified cheques and wire transfers," the investigation found, "but these were considered inefficient in the circumstances," with the election date of April 23 approaching quickly. So, "the legal propriety of a bulk donation was discussed and subsequently decided on," the report found. The bank draft was issued April 16, 2012.
Ms. Smith's party faced a series of controversies, and Ms. Redford's party went on to win a majority.
PC Party president Jim McCormick said his organization now has "heightened awareness" about how it handles donations.
"We have confidence in what we did and what we'll do in the future," he said.
Standing beside the Premier in Calgary, Solicitor-General Jonathan Denis said individuals connected to the donations are "completely vindicated" and owed an apology by the opposition who "repeatedly maligned" them since the issue first surfaced.
"This has been nothing more than a Wildrose witch hunt," he said.