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This is the second posting of a series about how the BC Local Elections Campaign Financing Act (LECFA) will impact the upcoming elections, from the perspective of John Whistler, the Financial Agent for the Green Party of Vancouver.

This posting will look at reporting periods, jurisdictions and expense limits. These are details that confuse and mislead the public which lead to a cynicism of the electoral process.

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The LECFA has three reporting periods:

  • Election Period – begins on January 1 of an election year and ends 29 days before voting day. In the case of a by-election, the Election Period begins the day the elected office becomes vacant.
  • Campaign Period – subject to expense spending limits – begins 28 days before voting day and ends at the close of voting on voting day.
  • Not-applicable Period – a non-voting year or after the close of voting in a voting year. The LECFA is not-applicable for this period, disclosures are not required and contribution limits do not apply for most activities for electoral organizations.

These reporting periods confuse the public who mistakenly assume that the restrictions on contribution and expense limits apply continuously.

Spending expense limits that only apply for the Campaign Period covering the last 28 days before an election are meaningless to the public when they have been seeing advertising and media coverage for over six months ($107,793 for a City of Vancouver Councillor for the 2018 election). Eliminating the Campaign Period and combining it as one Election Year Period that is subject to expense limits would more reflective of actual campaigning activities.

The spending expense limits are more perverse and unfair as it relates to third-party sponsors (advertisers) as they only apply to the Campaign Period. Third-party sponsors may operate without restriction during the Election Period (no requirement for registration, unrestricted contributions from any source, no requirement for public disclosure). For the 2018 elections we have already seen significant amounts of spending from dark money, with Vancouverites for Affordable Housing being a well-reported and disturbing example – will they even operate and disclose after September 22?

Electoral organizations are required to have a campaign bank account to manage the Election and Campaign Periods. All campaign bank account transactions must be compliant with the LECFA contribution and expense rules and public financial disclosures. Electoral organizations also have an operations bank account to manage the not-applicable period. The operations bank account is not subject to the LECFA, contribution limitations or public financial disclosures. Guess which bank account is used for the slush contributions and expenses?

In reality, electoral organizations are always politically active, including not-applicable periods. In not-applicable periods the electoral organization will provide caucus support for their endorsed elected officials and will be building organizational capacity for the next round of elections, which might be an unexpected by-election.

The LECFA is based on a fiction that electoral organizations have operating activities that are unrelated to their campaign expenses. The reality is that electoral organizations are continuously political, exist to elect their endorsed candidates and all their activities are campaign expenses. To be fair and transparent to the public, electoral organizations should be subject to contribution limits and submit full financial disclosures every year. There is no difference between operations and campaign periods.

The LECFA requires electoral organizations to operate separate campaigns that are held in different jurisdictions. Jurisdictions include different municipalities, school districts and regional districts. For example, the City of Vancouver is a different jurisdiction than the Vancouver School Board and Electoral District A (a Metro Vancouver Director that includes UBC and other unincorporated areas). This means that electoral organizations running both for city council and school board must operate those as separate campaigns: separate bank accounts, contributions can only be deposited in one bank account, expenses must be paid from the applicable bank account and transfers between different jurisdiction campaigns are not allowed. Most electoral organizations will have at least three bank accounts – operations for not-applicable transactions, city campaign, and school board campaign – to be compliant with the LEFCA requirements.

The rational for the multiple reporting periods, requirements for multiple bank accounts and restrictions associated with jurisdictions are not apparent. The LECFA has other provisions to ensure fairness, accountability and to prevent cross-subsidization between jurisdictions and candidates.

Public transparency could be improved significantly if the complex and confusing requirements for multiple reporting periods, multiple jurisdictions and multiple bank accounts were simplified. In particular this would simplify the management of audits.

Oh, there are no provisions for audits in the LECFA.

 

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