Local Government 101: Campaign Financing

Over 70 candidates ran afoul of the campaign financing rules in the 2002 BC Local Government election. As a result they were all barred from holding office for the following three years and prohibited from running in the 2005 election.

The BC Inspector of Municipalities is required to publish their names and the list may be found at: www.mcaws.gov.bc.ca/lgd/gov_structure/Elections/disqual05.html

Last time we spoke about the personal financial disclosures that ALL candidates must make and how every successful candidate must update these disclosures each year while in office. These documents identify their personal financial interests so we might know if a potential conflict exists.

The campaign financing rules are a different thing altogether. They exist so the average local elector may know who provided financial support to each candidate and how much each candidate spent trying to become elected. Win or lose, within 120 days of the election all candidates must submit detailed campaign financing reports to the local government office. We are entitled to look at them during normal office hours. And, if we wish, we may even ask to see all the forms from the 2002 and 1999 elections, too. The logic behind these rules is that vote buying is not in the best interest of the community and making the financing process public should prevent the practice. But, that only works if the electors know about the rules and the candidates know we're paying attention! How the whole thing works is pretty straightforward.

Here are some highlights. First, you don't need to be an accountant to understand these things. The forms are very sensibly organized and no more difficult to read than the local TV listings. Second, you are allowed to take notes if you wish, but you may not have photocopies of the forms. This has been decided by the courts as a fair balance between our entitlement to open government and the privacy rights of the candidates and their contributors. Third, every candidate must appoint a person as his or her Financial Agent for the campaign. This is done formally before the Chief Election Officer. The candidates may act as their own Financial Agent if they wish, but they still have to go through all the same formalities.

Next, the Financial Agent must open a separate bank or credit union account in the name of the candidate and every cent contributed to the campaign and every cent expended for campaign purposes must go into and come from that account. This includes all money that may have been contributed before the candidate was formally nominated, no matter when and no matter the source (i.e. leftovers from a previous election or as (encouragement) to run). While the bank statement deals with record keeping for all the cash, it is not only cash that has to be accounted for in the disclosure statements. If someone or some company makes (in-kind contributions) of say, office space, photographic skills or printing of campaign signs, all these sorts of things must be reported just as if the candidate had paid fair market value. If given a discount for goods or services, the amount of the discount must be recorded as a contribution. Anonymous contributions over $50.00 must be surrendered to the local government and shall not be spent by or returned to the candidate. And any indirect contributions made through another person or company (called "funnelling") is prohibited. Money candidates spend on their own campaign must also be reported as contributions, including every debt incurred. But take note, it is absolutely against the law to run a deficit campaign. The final reports shall contain every donation.

And for any totalling $100 or more, must disclose the name of every contributor (individual, company, trade union, non-profit society, etc.), and the precise amounts contributed. There are no exceptions. (cont'd page 15) How the contributions were spent must also be declared in detail. Any reasonable person might interpret what may or may not be a fair expense. But to learn precisely what is or is not valid, you may wish to ask the local government for the 2005 Candidates Guide or download it from: http://www.mcaws.gov.bc.ca/lgd/gov_structure/Elections/guide.pdf Each candidate was given a copy and ignorance of the rules is no excuse for non-compliance. As noted above, the most serious violations of these rules can cause the candidate to be dismissed form office and prohibited from running in the next election. And ANYONE involved with improper campaign financing, candidate or contributor, may be fined up to $5,000.00