Saturday, July 16, 2005

What exactly is the RCMP investigating?

There is another thing bothering me. The CBC broke a story that there was an RCMP investigation into Grewal's election finances (here). The same story reported some cheques that looked dubious. The next day we learned that there was a simple explanation: the cheques (or two of them) had been written before the rules that they seemed to break. And that should do it. Perhaps.

But now there is new evidence. Jim Holt (president of Grewal's riding association) has released the letter he sent to CBC reporter Terry Milewski (full text here). One of hte things he says is this (with my emphasis added):
only a formal examination of Mr. Dhahan's Income Tax records would determine if this item had been in fact processed as a normal business expense for either 2003 (when the cheque was written), or in 2004 (when the item cleared the bank) … … In the matter of the item for $600 [of Mr. Mann], our research shows that this item followed the same pattern as Mr. Dhahan's above. Namely, it was used to help pay for the December 2003 dinner, this cheque cleared in nearly identical fashion to that of Mr. Dhahan's, and all of the above questions must be asked of Mr. Mann.
The cheques may have been written in December under the old law, but they were cashed in January under the new. Which law was relevant? I'm quite happy to admit that I don't have a clue. But if it's the case that the case was referred to the RCMP by Elections Canada (as suggested by Vitor Marciano in comments over at Bound by Gravity), they will presumably know what the legalities are and not have sent the RCMP on a wild goose chase.

But is the RCMP about the date of these cheques at all?

There are at least two other possibilities. First, might the investigation be about whether Grewal misled his contributors into making contributions with promises of receipts? Given that this would very quickly decend into a case of 'yes he did', 'no I didn't'--and the possibility of honest misunderstanding--I doubt that any case would be referred to the RCMP on this basis.

Second, I suspect it is worth reconsidering the context. A fund-raiser was being held for Grewal; Mann and Dhahan both attended and wrote cheques payable to Grewal; Grewal endorsed the cheques and used them to pay the restaurant at which the fund-raiser was being held. But who was running the fund-raiser? Grewal? Or his constituency association? Let us first suppose it is the constiuency association. The constituency will have collected donations, paid out the expenses, and taken the rest as its 'profit'. Grewal applied the cheques of Mann and Dhahan ($600 each) to pay for the costs. Now, if this was a constituency affair, using this $1200 this way will have had the effect of increasing the 'profit' by $1200 without the issuing of receipts.

Such an arrangement may be legal or not--I have no idea. And I'm not even sure whether it would be unethical. But given how tightly political financing is governed in this country, an investigation like this raise concerns in Elections Canada and the RCMP.

Just a thought. Tell me what you think.

4 Comments:

Blogger Mark Francis said...

I find it all confusing.

If I take in a cheque from people who are supporting me politically, it can't be personal income, can it? Isn't that payola? If it's not, how are we, the citizens of Canada, supposed to know the difference?

The transaction is odd. To understand it, you have to rely just on the hall's bill since that portion of the payment to the hall did not go through Grewal's books.

I presume that the hall would issue a receipt to Grewal's people showing a payment on account. That would mean that if the money on those cheques wasn't counted as income, an audit could find it as there would be an inbalance in the books.

This is a poor way to make payments to a supplier.

For accounting rules and the law concerning such matters, we need a specialist in such matters.

But is does seems shady, or incompetent.

Here's a chill for your spine:

G. Grewal as finance minister.

He gets the job after doing such great work with the immigration portfolio.

You can wake up now.

11:44 PM  
Blogger buckets said...

Yes. I had no idea that campaign finances were potentially so murky.

There is no doubt that all of this would be illegal under the new law of Jan. 1, 2004. (And about time!)

11:57 PM  
Blogger Knight of Good Mr. Iron Man said...

This comment has been removed by a blog administrator.

2:04 AM  
Blogger buckets said...

Knight. You are not welcome here. All your comments will be deleted before I read them.

2:12 AM  

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