Smoking Gun on yet another potential CPC breach of the Elections Finance Act.

Nearly broke a major story

I really really enjoy reading the Hill Times. It is informative, and I have learned much about how Parliament, and indeed politics works in Canada through their site. I just read an article there about some very aggressive Conservative Party activities, which I believe may constitute a breach of the Elections Act, and should be investigated.

The crux of the story is about how a number of very rich Conservative Party EDA’s (Electoral District Associations), channelled significant resources towards swing ridings in Ontario, Quebec, and the Maritimes. So far so good. There’s nothing wrong with transferring a pot of money to a ‘poor relation’. It makes a lot of sense for the CPC to ensure that every EDA where they have a chance gets every penny they can legally spend, and then go about spening it to win their local contest. The money gets properly recorded by the recipient, whose financial agent carefully records and reports the spending, and the spending limit is approached, but not quite exceeded. The really meaty bit of the story wasn`t picked up on by Tim Naumetz, the author. I feel kind of sorry for him, because he could have had a really great story here. It`s not too late for him though.

So here`s the smoking gun:

“Prime Minister Harper’s (Calgary Southwest, Alta.) riding association, along with those of Immigration Minister Jason Kenney (Calgary Southeast, Alta.) and Conservative MP Rob Anders (Calgary West, Alta.) in Calgary, also set up massive phone banks with hundreds of volunteers in an attempt to sway voters in swing ridings in central Canada, Mr. Anders and his former riding association president say.”

Do you respond, ‘Big Deal’? Well, it almost certainly IS a big deal if the facts line up the way I suspect. First off, these massive phone banks, with hundreds of volunteers cost money to set up. Actually, quite a lot of money. Even if every volunteer is on a crappy old computer, with VOIP service, the computer has to be recorded on the campaign books at the cost to purchase it. Then there’s the costs per call. Then there’s the proportion of campaign office expenses dedicated to NON-LOCAL election expenses. I had the opportunity to study Accounting as part of my MBA program. I’ve also been a businessman for several decades, so basic accounting principles are not strange turf to me. Based on the principle of materiality, if some casual calls were made, that amounted to a few dollars being spent in the wrong place, because the amount is insignificant, no true breach of anything has occurred. That’s why, if you expense a cup of coffee that wasn’t actually business related, you aren’t guilty of anything inappropriate. You are only guilty of something if you systematically went about expensing thousands of cups of coffee, because at some point the error becomes a material breach. Do you see where I am going here yet?

I see at least 3 potential breaches of the act that will require investigation by EC auditors.

First problem: Did Rob Anders, Steven Harper, and Jason Kenney file for, and recieve a 60% rebate on these local election expenses? If so, they should give the damned money back, at a minimum, because these were clearly NOT local election expenses, and thus do not qualify. This is the flip side of the in-and-out scheme wherby the CPC appeared to bilk taxpayers out of large sums of money. The CPC allegedly took advantage of poor language in the act to create local expenses in ridings where the spending limit would not be reached by the local campaign. That way, the Party could spend money above and beyond the legally mandated national elections expense limit, and the local EDA’s that participated would receive a 60% bonus on the backs of the taxpayers. Based on Rob Anders quote, the very purpose of these phone banks was to direct resources at other electoral districts, and I am betting that the $ amounts were non-trivial.

Second Problem: In which of the ridings targetted in this way did the local campaign spend right up to the legally mandated maximum? Let us make a guess, and say that $40,000 worth of phone bank was equally divided up between 10 out-of-riding campaigns. That works out to $4,000 per recipient riding. I will guess that this would put at least half of the recipients over their legal spending limit. What, I wonder, are the penalties for buying an election?

Third Problem: The spending was either authorised by the Financial Agent for the recipient campaign, or it was illegal. That’s it, plain and simple. If the recipient were unwitting, which is theoretically possible, then the offense was committed by the donor campaign. Hey, wait a minute! That was our beloved Prime Minister’s campaign wasn’t it? Third Party advertising rules could apply if the donor wasn’t a political campaign, but the donors were, so that’s not much of an escape hatch. The Financial Agents for the donor campaign may already be on the hook for claiming the rebate, but there are a bunch of counterparties to be called to account too.

I know that many would say it`s too hard to quantify, and that allocating the funds will be impossible. Well, I`m happy to say that any CA, or CMA can easily conduct the audits that will NAIL the contributors to the wall. Whether the phone banks were voip, or landlines, or whatever, there will be electronic records of exactly which phone calls were made to where. Once it`s established how much of the office spaces, and expense were dedicated to these non-local campaigns, it will be a simple matter to allocate the spending proportionally to the recipients. They will argue like hell in the courts, over a few hundreds of dollars, but the basic facts will be inescapable.

There are many twists and turns that add interest to this story. There is the fact that EC ‘lost’ their chief the last time EC tried to challenge this kind of sleazy shafting of the taxpayer, and manipulation of the Elctions Act. (In-and-Out scandal, appropriately so named because the appearance that the taxpayers were screwed). There is the fact that the CPC so very loudly screamed and hollered about the clear and transparent per vote subsidy, whilst at the same time they manipulated and schemed to screw the taxpayers wholesale with these kind of sleight of hand tricks. And then there’s the interesting fact that even when caught overspending, nobody ever seems to lose their seat over it. I mean, w.t.f. is the point of spending limits, and a finance act if Rob Anders can publicly crow about it? Has the culture of corruption spread so far, and so quickly that the CPC believes they are immune to the law?

Anyhow, I suggest that, like myself, you get on the phone to elections Canada, and ask them if they are going to dare to beard their Tory masters? I feel sorry for EC if they actually attempt to enforce the law. They are legally bound to try, but oh the consequences! More careers will be abruptly terminated, and obviously the CPC will immediately sue them. Still, we must use the tools at our disposal, or else the contempt of our political masters for the law will remain unchecked, and these kinds of sleazy practices will continue to be rewarded by electoral success.

Authors note: I just made a few judicious edits. A little heavy on the hyperbole, as I was all steamed up. Sorry if it morphed into something a little softer.

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GPC Fundraising: New initiatives needed.

I am often pretty critical of current practices in the GPC. I hope that my readership understands that the criticism is seldom meant to denigrate, it’s intended to promote positive change. When it comes to fundraising, the GPC has done a couple of things pretty well since Elizabeth May took over. First and foremost, the Party has worked out that emails are free, can be deployed in a matter of hours, and are a pretty good tool to gather in resources. In the past, (pre-2006), fundraising efforts were sporadic, and had an ad-hoc nature. “It looks like an election is coming, set up something to go and get $250k from the membership.” A temporary phone bank would get set up, a small group of people would learn on the job, and just when everybody had it figured out, Jim Harris would pull out his magic rolodex, and raise the other $200k in an afternoon or two. The website was the primary fundraiser, and relied pretty much on passive traffic to leave a present as it visited the website. It was a pretty good website, and with the kind of traffic it generated during an election, it was capable of raising some pretty impressive $.
What has been done since then is that fundraising has actually focused on the proven returns of systematic communications, coupled with issues based, and results oriented asks. A recent example is the plea in Elizabeth Mays words to reach deep into our pockets and help retire the election debt. This is a very good way of couching an appeal for money. People can readily agree to serving this objective, and for a certain proportion of recipients, it will justify making an impulsive decision to shell out some cash on the spot. Over the past couple of years, this approach has helped to raise on the order of $250k per quarter, which compares pretty well to past ad hoc efforts.
I have also noticed a second trend in action. When Elizabeth May heads out on the road, she often makes appearances at local EDA events, and fundraisers. There is a revenue split between the local EDA, and the central Party that is very wise. Elizabeth gets to go out and galvanise the troops at a local level. The EDA gets a nice boost, and probably an impressive turnout at a local event. A thousand or two dollars are raised, and shared, so it’s a win-win. This is a laudable effort, and in my mind it is starting to justify the recent focus on Elizabeth’s book tour. With Elizabeth on the move across the country, she was able to hook up with EDA events at a minimal cost. The nicest thing about it is that it is systematic, and provides an ongoing stream of resources, not just a one time dribble of cash, but a regular flow of new recruits, motivated EDA memberships, and cash on the barrelhead.
That’s enough gushing praise from Bluegreenblogger. We currently only have one Leader to gad about the country, and the main thrust of fundraising has a couple of serious limitations. From the standpoint of the fundraising staff, the world is divided into those for whom we have email addresses, and the rest of the world which doesn’t count. The world which counts, (current email addresses of known supporters), is continuously augmented. The website provides a regular flow of new members, sign takers, etc. to populate the email lists. Active EDA’s are out there recruiting new members, and contacts, which eventually flow back into the fundraising database. Elizabeth’s event appearances are probably pretty good at harvesting new names and email addresses to feed into the passive fundraising ‘machine’.
You would think that with the constant flow of people being introduced to the mailing lists, that fundraising would be on a continuous growth curve. Well it isn’t, and the reason why is one of the two factors that will determine our fundraising success. What it boils down to is that for every new contact shelling out a $100 donation, there is a previous donor deciding not to do so anymore. In fact, if it weren’t for the frequent elections, which periodically restock our membership numbers with thousands of new donors, the numbers would look more like one new donor being matched by two donors taking a step back, and donations would be in decline.
There’s no question that money is the mother’s milk of politics. Right now the GPC needs to clobber our $1mm plus election debt, and it would be nice to actually start banking some serious cash, instead of relying on bank loans to fight future elections. Based on the discussion above, there are two ways to do it. Firstly, we could focus on developing new data sources, and adding larger numbers of new names to our fundraising database. This approach is fine, and neccessary. Ideally it would not be a one-off effort. It would involve different communications channels, would be repeatable and ongoing, and would have a quantifiable payoff. After all, in the long run we’d be better off with programs that deliver 2 new prospects per week than a non-repeatable initiative that delivers 20 new propsects all at once. The problem is that no matter how large the email lists got, based on current, and recent past practices all those new names will quickly reach the point of donor fatigue, and the growth in funds raised would level off at a point somewhat, but not dramatically higher than todays numbers.
The second approach is to get to the root of donor fatigue, and improve the retention rate of members, and donors. In the world of Sales, and Marketing, customer retention is extremely important. It boils down to the fact that it is much cheaper, and easier to keep a customer happy and loyal than it is to go out to the big bad world and win new customers. It is in fact so much cheaper that corporations large and small alike set up call centres, offer loyalty rewards, put TV’s and free coffee in their waiting rooms, and put great creative energy into finding and improving ways to meet their customers needs. We are a political Party, so it’s actually not true that it costs us more to gain new ‘customers’. Every election is a blizzard of free publicity, and the outcome is a blast of new resources. That doesn’t change the other side of the equation though. Provided the costs of retaining members for longer is lower than the resulting revenue stream, the GPC is ahead of the game in financial terms. I won’t even get into the bonus in terms of volunteer hours, larger pool of prospective candidates etc.
So what? you ask. We’re not an auto service business that can put a large screen tv in our waiting room, and provide nice loaner cars to help retain customers. In order to find what motivates the membership, then what better way than to ask them? It will take resources, and good planning to actually go back to the membership and systematically uncover what motivates every person. First of all, it will take dedicated staffers, with a proper call centre suite of tools to effectively manage their time and tasks. This will not be pure overhead though. We currently hire Key’s direct marketing to make outbound fundraising calls on behalf of the GPC. This expense could be saved, while the outcomes for the GPC would be enhanced as we widen the scope of the phone bank, and start reaping more rewards than just the membership renewal, or enhanced donation level. By maintaining direct contact on a regular basis we can build a stronger relationship with the members, find out what motivates them, reatin their interest for longer, and therefore put fundraising on a growth track again.

I would also like to add some anecdotal evidence to back up my proposal. Over the years, I have made about 4,000 or more phone calls directly to members of the Party. Far and away the most common response I have had from members is gushingly positive, because for the majority, no-one has ever contacted them unless it was to ask for money. I can definitely tell you that a simple courtesy call to ask about the members interests, and perhaps refer them to the shadow cabinet member responsible for their particular interests WILL result in a dramatic increase in funds raised. Couple this with an ongoing outreach program, and you can start to do things like build volunteer teams to achieve Party objectives. Involve people in their local, and National Party institutions, and generally provide a support team for the Field Organisers out there shaking the bushes for more resources.

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Correlations between Campaign Spending and Green Party of Canada vote outcomes.

Now there’s an exciting post title for you! Seriously folks, I have seen a little discussion here and

It Matters

there about just how important election spending is to winning votes. I thought I would sink a little time into quantifying the relationship between EDA formation, campaign spending, and electoral success. I trotted off the the Elections Canada website financial reports database, and the election results database. It’s pretty easy to get sortable data from here, all you have to do is look up the relevant Candidate, Party, or District, and then download the data as a txt file. This file can be imported into an excel spreadsheet, and viola, you have sortable datafiles to play with.
It actually took me a little time, because I had to sort the data so it was all in compatible rows and columns, but I finally got every Electoral district in Ontario, into a spreadsheet, along with every EDA that filed a return in 2007.

The three sets of data I merged were candidate financial return summaries, 2007 EDA financial return summaries, and the actual election result summaries. The data is incomplete, due to some late filings, and of course, not every campaign reports all the data consistently. Still, there were some basic, and irrefutable findings to share. I wish I could figure out how to upload an excel file, then I could put a link here so you could download the actual spreadsheet, but I’ll have to settle for the outcome of some basic statistical analysis.

Correlation between spending and % Vote:	0.76573958
Correlation Between 2007 EDA Assets and %vote:	0.53411402
Correlation between Transfers into campaign and % vote:	0.72692593
Correlation between campaign contributions and % vote:	0.27744132
Correlation between spending and total votes:	0.75095156
Correlation between EDA assets and total votes:	0.57536407
Correlation between transfers into campaign and total votes:	0.6979957
Correlation between campaign contributions and total votes:	0.3293264

election-spending

So there it is folks, this table was produced using the basic CORREL function in Excel. A correlation of 1 means a perfect positive correlation between the two variables, and a correlation of 0 means no relationship whatsoever.  As you can see, there is a very strong relationship between reported election expenses and both the total number of Green Party votes, and the percentage of the total vote. The relationship between the financial position of the EDA the year before, and the actual vote outcome is less important, but still pretty strongly positive. Whether the funds were raised by the Campaign, or by the EDA prior to the election was still a positive relationship, but much less influential.

For what it’s worth, the data supports the following conclusions:

1) Raise as much money as possible, from whatever sources you can find.

2) Form an EDA, and make sure that you are doing your utmost to raise money through it.

3) Make sure that your campaign has a finance chair, and continue to raise money throughout the campaign.

All these things will have a strong positive outcome on your vote come EDay. Please don’t bombard me with criticism about the nature of causal relationships. I know that in many respects the money is a symptom of organizational strength. That’s why I ran a number of different correlations. This data is weak in many respects, BUT it does demonstrate that even in the absence of an EDA organization, hard cash still has a major impact.

As to how you spend your money, I wish that EC laid out the detailed spending reports in an easily managed format, because then I would irrefutably prove that local advertising is a waste of F***ing money. If you cannot canvas widely, your advertising should be in the form of flyer’s, widely distributed, which will drive people to your website. Do everything you can think of to ID voters, build your mailing, and emailing lists, and get more supporter data stored away for the next election. Unless you have a lot of eday volunteers to GOTV, you can pay for voicemail message delivery, and telemarketers to GOTV for you. I don’t have any hard data to prove it, but I believe that broadcast recorded message drops into voicemail will be effective in converting voters. Keep it fun, and make sure that you have plenty of chances for volunteers to party a little. These are some of the appropriate uses for all that money you’re going to raise for the next campaign.

As a sort of a post script to this, there is some happy news for 18 Ontario EDA’s. These are the campaigns that broke the 10% barrier, thus being entitled to a rebate on 60% of their election expenses. The rebates will range from a low of $2,800 to a high of $46,000, so that means a fair number of teams will go into the next election with a substantial war chest. One the other side of the coin, it really hurts to see Ottawa Centre miss their $24,946 rebate by a mere 45 votes! There were altogether another 10 campaigns that missed their rebate by a few hundred votes, so that goes to prove that even at our level, every vote counts!

Pay per vote subsidy on the chopping block?

According to about a million leaks and articles like this Toronto Star article, Harper, Flaherty, and the boys

Politics as Usual

from the Reform, oops, Alliance, oops, CRAP, oops new and improved Conservative Party have decided to detonate a huge bomb tomorrow. They have been crowing over their plan to gerrymander the political financing laws, and eliminate the reforms to the electoral finance act introduced by the Liberals in time for the 2004 Federal Election.

The purpose of these reforms was to remove the influence of big donors from the political process. By limiting election spending, and limiting the amount, and types of donations the parties were allowed to recieve, the act intended to remove political decision making from lobbyists, and put it front and center to the electorate.

Because they have a well oiled fundraising machine, and know that they can raise limitless cash from their

Election for Sale?

admittedly motivated idealogical base, the Reform, oops CRAP will attempt to revoke the per vote subsidy to political parties. They will undoubtedly rail about political welfare, but their real agenda is to go back to the bad old days where rich donors determined election outcomes in Canada. Three guesses as to which Party the richest donors support?

Canadians will not be fooled by this utterly cynical ploy. On top of which, the Liberals, Bloc, and NDP will go absolutely ballistic over this. Ballistic enough to defeat the government, and form a Liberal-NDP coalition? I’m willing to bet that the Bloc will undertake to support such a coalition, and out of simple self preservation, such a coalition will be presented to the GG immediately after a defeat in the house.

Stay tuned, this is going to be really juicy!