OTTAWA -- The satellite office controversy finally landed Friday in Federal Court as the New Democrats wrestle with an issue that has been sapping the party's political batteries since long before Tom Mulcair's bid to become prime minister.
The party -- already some $5 million in debt following the longest election campaign in modern Canadian history -- is using its own funds to fight a decision made in 2014 by the secretive all-party Commons committee that polices parliamentary spending.
The board of internal economy ordered 68 NDP MPs -- many of whom went down to defeat last October -- to repay $2.7 million in parliamentary funds that went towards office operations in Montreal, Toronto and Quebec City.
The NDP has long denied that it used parliamentary funds for non-parliamentary purposes.
"The concern is, were taxpayers' money (meant) for parliamentary funds used for non-parliamentary purposes, and I have asked people, 'Where was the evidence?"' NDP House leader Peter Julian said in an interview.
"Everyone has admitted to me there was never a shred of evidence produced. That is an important point. What that means is the resources were being used for parliamentary purposes."
Julian said the party would still like to see the attorney general refer the matter to the Supreme Court, to allow it to determine whether the board of internal economy can be subject to a court decision.
"This is a decision that can only be taken at the Supreme Court level," he said. "The former government and the current government have refused to refer it to the Supreme Court, which I think is bad news."
Julian said the government's failure to refer the jurisdictional issue to the top court means the process will be dragged out in Federal Court, costing more taxpayer dollars.
During Friday's Federal Court hearing, a judicial officer heard arguments from both sides about whether the NDP should be allowed to introduce an affidavit from a legal expert about the jurisdiction of the courts in matters of parliamentary privilege.
The Federal Court officer, known as a prothonotary, promised a decision at a later date.
In March, The Canadian Press reported that Prime Minister Justin Trudeau had already vetoed an out-of-court settlement in the long-running dispute.
At the time, Liberal House leader Dominic LeBlanc insisted Trudeau had nothing to do with it, despite multiple sources who said it was the prime minister himself who put an end to negotiations.
"The board of internal economy is the only body responsible for addressing the NDP's satellite offices and this misuse of public funds," LeBlanc said, adding the Liberals never contemplated settling the matter out of court.
"It is the NDP who decided to begin frivolous judicial proceedings and subsequently asked for settlement negotiations," he said. "We have always been of the view that the NDP misused public funds and should therefore reimburse taxpayers."
New Democrats strongly disagree funds were misused and believe Commons administrators also wildly inflated the amount of money contributed from their office budgets towards the salaries of satellite employees.
Former Toronto MP Dan Harris was originally on the hook for more than $140,000, but late last year was effectively exonerated by the Commons' chief financial officer.
Ex-Montreal MP Isabelle Morin had been ordered to repay $169,117 in salary paid to an employee, but her bill was slashed to below $30,000 because the employee worked most of the time in her riding office, not the Montreal party office.
Mulcair, who will be leaving as party leader once a successor is named, remains personally on the hook for a bill of more than $400,000.
The NDP's federal council -- the party's governing body, made up of about 100 people -- is set to meet on Sunday as it looks to carve out the rules surrounding the party's upcoming leadership race.
A letter from the party's president, vice-presidents and treasurer -- obtained by The Canadian Press -- said the council should consider the likely financial impact of the race, given factors that include the party's current debtload.
Recent figures released by Elections Canada also paint a bleak picture of the party's fundraising efforts in its first quarter, when it collected just $1.3 million.
