Political parties avoid penalties over questionable donations

Elections New Brunswick says it allowed the Progressive Conservative party to investigate whether questionable donations it received in the 2010 election year were legal and is using the same method to evaluate questionable donations to parties in 2014.

"Our approach has been to work with the political parties," said Paul Harpelle, a spokesperson for Elections New Brunswick.

"The belief is, that is taken into this, is that no one is intentionally going out to falsely make donations."

A CBC News review of New Brunswick political donations in 2014 has raised questions about whether both New Democrats and Progressive Conservatives accepted political donations larger than those allowed by law.

(The Liberal party has not submitted its donor lists yet, even though they were due April 1.)

But parties will largely be left to investigate over-donation violations themselves. There are penalties for over-donations in the Elections Act but it is up to the elections agency to decide if they will be enforced. 

Cardy says NDP did nothing wrong

NDP Leader Dominic Cardy says he is confident his party did nothing wrong in 2014, but acknowledges it makes little sense to have donation limits with no punishment for breaking them.

"Why bother having laws we're not going to bother to enforce," said Cardy.  

New Brunswick's political financing law prohibits donations in excess of $6,000 per party, per year, from individuals, corporations or trade unions.

Recently-released financial statements from the 2014 election year reviewed by CBC News show the NDP received $12,000 from the United Food and Commercial Workers Union (UFCW) and $9,500 from the United Steelworkers. 

Cardy says because the donations were broken up among different union locals and offices, the party believes they meet the requirements of the law.

"The advice we received is they were allowed and we checked carefully on that beforehand," said Cardy.  

"You have to be able to have bargaining rights in New Brunswick and each of the locals in addition to the central bodies have those rights."

The records show the UFCW donation came in two $6,000 cheques from the union's Eastern Provinces Council office in Bedford, Nova Scotia — one from Local 1288P and one from Local 864, which together make up two thirds of the Council.

The union's website lists Local 864 as a Nova Scotia local, although it does represent about 80 workers in New Brunswick at Canadian Forces Base Gagetown.

UFCW's Eastern Provinces regional director Mark Dobson did not return phone calls asking about the donations.

The Steelworkers donated $2,500 from its national office in Toronto, $6,000 from its District 6 office in Toronto, and $1,000 from local 7085 in Belledune, according to party records. 

USW District 6 Director Marty Warren was not immediately available to speak about the donations.

Tories also take union cash

Also taking in union money was the PC party.

Its records show it received $11,200 from UA Canada — the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, including $5,200 from Local 325 in Fredericton and $6,000 from the union's political action fund in Ottawa.

John Telford, UA's director of Canadian Affairs, was out of his Ottawa office on Wednesday and could not be reached for comment.  

New Brunswick's political financing law does not say whether donations from the same union can exceed $6,000, if it is split up between different contributors. Elections NB says it is still examining that issue.

Rules are clearer for corporations, however, and Progressive Conservatives are dealing with an issue there as well.

According to party records, the party received a series of 2014 donations from three companies run by Majid Debly, that mirror a series of donations the Saint John businessman's companies also made in 2010.

Debly has paving, excavation and gravel pit operations in Saint John and he has a company that owns a trailer park on the city's east side.

New Brunswick's political financing law specifically treats "associated" companies as a single donor and limits their combined donation to $6,000.

Among other things, associated companies are considered those that are "controlled directly or indirectly in any manner whatever by the same person or group of persons." 

According to the PC party's financial records it issued 16 corporate donation receipts to a single post office box in Saint John in 2014 for $16,800.

Eight receipts went to Debly Enterprises Ltd. for $5,050; six went to Debly Resources Inc. for $6,000 and two went to 632504 NB Ltd. for $5,750, party records show.  

All three companies list the Debly Resources head office at 170 Ashburn Road in Saint John as their address of record on New Brunswick's corporate registry.

Two of the three list Debly as their sole director, while the third lists Majid and Kim Debly as directors.

Tories review donations

Fredericton businessman Bob Hathaway, the party's official representative, says following CBC News inquiries Elections NB has asked him to review whether the Debly companies are associated with one another, making the combined total in donations unlawful.

"Essentially, you just have to go to the source and ask the source of the contributions how is the ownership structure set up there.  That's how you come to the answer," said Hatheway.

According to the PC party's 2010 return, the same three companies donated a total of $10,000 that year. 

Elections NB's Harpelle said the agency noticed two of the three Debly company donations at the time and asked the Progressive Conservative Party for assurances they were not illegal.

"They asked the party to clarify and confirm that these contributions were not in contravention with the Political Process Financing Act and the party did its due diligence, came back to us and said that there was no issue," said Harpelle. 

"They are the ones that have received the donation and all of them are aware of the Political Process Financing Act and the laws under it so it is better in our opinion to have them go and seek clarification."

Debly did not respond to repeated attempts by CBC News to contact him. Hatheway says although he doesn't recall the details of what happened in 2010, he will get to the bottom of whether the donations from Debly companies in 2014 are proper.

If they were illegal, there is no penalty. The consequence is the party must refund the excess amount.

Unlike federal political donation laws that can result in stiff penalties when they are broken, including large fines and jail time, New Brunswick has no penalties — only that amounts over the $6,000 limit must be repaid.

Other corporate donations questioned

A review of PC party records also calls donations from two other companies into question.

The records show J.D. Irving Ltd. was issued receipts for donations totaling $6,495.25 and two associated Nova Scotia companies, Oxford Frozen Foods and Peninsula Foods — both members of the Bragg Group of companies, are listed as donating $6,834.

Mary Keith, a J.D. Irving Ltd. spokesperson, said the company disputed the PC Party's accounting of its donations and corrections have lowered the violation to $66.

"The PC Party confirmed that the total is actually $6,066 for 2014 for J.D. Irving, Limited," Keith wrote in an email to CBC News.  

"We will follow the process regarding a refund for $66 once we confirm this number."

Oxford Frozen Foods spokesperson Jordan Burkhardt said he would look into what happened but has so far not responded. 

The companies involved in those donations also do business with the province.

According to the public accounts Debly Enterprises Ltd., a paving and excavation company was paid $12.9 million over the last four years on various government contracts, mostly with the Department of Transportation and Infrastructure.

Debly Resources Inc. operates gravel pits in the Saint John area that complements the paving business and 632504 New Brunswick Ltd. owns the Glen Falls trailer park that is currently in the middle of a provincial environmental impact assessment for a proposed expansion. 

J.D. Irving Ltd. interacts almost daily with the province on forestry matters and Oxford Frozen Foods got a $37.5 million provincial government loan in 2013 to build a blueberry processing plant in northern New Brunswick.

Cardy says he would like to see New Brunswick adopt federal rules and end all corporate and union donations and enforce election and contribution laws with real penalties.

"It's another area where we've been far too lax over the years," said Cardy.

"There's got to be stronger consequences."