OTTAWA - As former Liberal leadership contenders scrounge for money to pay off up to $3 million in cumulative campaign debts, Bob Rae has gone to court to recoup the $50,000 deposit each candidate was required to plunk down.
The money is desperately needed by some candidates. At least two of them are finding it so difficult to raise money that they're urging the party to take over all campaign debts for all 11 contenders. Those with knowledge of the discussions say that's highly unlikely to happen.
The party found itself flush with cash after last December's profitable leadership convention and promises were made to refund the deposits as a way of helping candidates reduce their onerous debts.
But Elections Canada vetoed the move as an illegal cash transfer.
The watchdog agency considered the deposits to be entry fees, not refundable deposits. And while the law allows candidates to pay for services from the party, Elections Canada ruled that it does not allow the party to transfer cash to candidates.
Rae, who finished third in the leadership contest, is challenging that interpretation of the law in Federal Court. His campaign asked the court last Friday for a judicial review of Elections Canada's ruling.
"These are funds that we raised as part of the leadership campaign," in accordance with all the rules, said Jonathan Goldbloom, Rae's campaign manager.
"It was a refundable deposit that was given to the party at the entry point . . . In other words, it's our money."
The court challenge comes just as the Conservative government is planning to introduce legislation tightening the rules around loans for leadership and election candidates.
While candidates can't receive more than $1,000 from individual donors, they can accept huge loans from their personal businesses, friends, family and supporters. Critics complain that those loans can be written off if they're not repaid after 18 months, effectively becoming donations far in excess of the legal limit.
The 11 Liberal leadership contenders all wound up taking out loans of varying sizes. Over the course of the 10-month contest, Rae led the charge with loans amounting to about $700,000.
However, party insiders say Rae's debt at the end of the campaign was actually smaller than that of Stephane Dion, the ultimate winner, or second-place finisher Michael Ignatieff or fourth-place Gerard Kennedy.
Final financial statements from each of the camps must be filed with Elections Canada next month. However, party insiders expect the cumulative debt of all candidates to be in the range of $2.5 million to $3 million.
Even so, none of the contenders came close to spending the $3.4 million expense limit set by the party. Rae and Ignatieff are expected to emerge as the biggest spenders, with expenses for each totalling in the neighbourhood of $1.8 million.
Goldbloom said Rae's debt is "manageable." Still, he acknowledged that getting the $50,000 deposit back "certainly will help."
"Obviously if we win this through the judicial review, it will be to the benefit of all the other camps and my understanding is they would welcome the $50,000," he added.
