Original Sin City
Townie election finance reporting smells off
There are rotten boroughs.
Then there’s the City of Sin Jawns.
According to CBC, one candidate for a ward in Sin Jawns’ municipal election last October spent almost $7,000 to get elected but raised only $5,300. Of that $5,300, though, almost 90% of it - $4,700 - was illegal. There’s now a ban on donations by corporations and unions, which we’ll come back to in a minute.
He won the election.
“The city” as Terry Roberts’ story keeps calling whoever it is that deals with these things down on New Gower Street pointed out to the fellow that the corporate donations were illegal. He said he didn’t know the rules changed from the last time. Now he will keep his seat but has to pay the money back to the donors.
That’s all that happened despite the basic idea that ignorance of the law is no excuse.
There are a few problems with this story, though.
Big problems.
For one thing, while the election web page for candidates says “Any and all corporate and union donations are prohibited,” the actual by-law - linked many times on the City’s election website - points to the 2007 by-law, last amended apparently in 2020.
Read it as it is written. Start at the beginning. The by-law allows donations by natural persons - living human beings - as well as legal persons, which includes corporations and unions.
CONTRIBUTIONS
4. (1) (a) Contributions to candidates shall be made only by natural persons or individuals, or by corporations or trade unions individually, and shall only be made in the calendar year in which an election is held.
(Amended 2020/10/26; #1628)
No person can make a donation whether its goods, services, or cash - valued at more $1,000.
2) (a) Natural persons individually may in a calendar year make a maximum contribution of $1,000.00 to a candidate; and
(b) Corporations and trade unions may in a calendar year make a maximum contribution of $1,000.00 to a candidate. (Amended 2020/10/26; #1628)
And any donation more than $100 must be reported by the candidate on their election finance report.
So right off the bat there’s that problem with the CBC story of Donnie Earle.
Are corporate donations allowed or not allowed?
Well, in 2020, Council did amend the by-law, apparently. They lowered the corporate and union limit on contributions from $2,000 to $1,000. That’s what the online version of the by-law says right now. OK. Council also lowered the threshold for reporting from $250 to $100.
And rather than repeal the corporate donations or allow for them to be deleted immediately after the 2021 election, they buried a line in a renumbered section later on that says “Notwithstanding any section of this By-Law, contributions shall not be made by corporations or trade unions for the 2025 election and to any election which may be called thereafter.(Amended 2020/10/26; #1628)”
It’s lazy drafting. The city house-lawyers should have simply allowed for the complete elimination of the stuff you’re not allowed to do anymore. That laziness caught one guy out but, okay. No more corporate donations.
Donnie Earle took $4,700 he shouldn’t have. His excuse according to Roberts’ story was he didn’t know. Ignorance of the law is no excuse. And for all that he has no penalty. He keeps the job and the $52,000 salary and can take less than 10% of it to pay back the illegal contributions. Other candidates got away with taking cash from different kinds of organizations that city officials reasoned were not corporations but that most people would reasonably consider to be in the same category for ending everything except donations from living people. That’s the way Sin Jawns rolls.
But back in 2020, Council didn’t change anything else and that’s where the story gets way more interesting than Donnie’s free ride for breaking the law and what Terry Roberts reported.
The city by-law requires that candidates report all donations of more than $100 received from natural persons and that no one may contribute more than $1,000. That means professional services but doesn’t include volunteers on the campaign, like Nan baking cookies for everyone or Pop going door-to-door.
There is no exception for candidates under the by-law. They are not a different type of person. There’s not natural persons, legal persons, and candidates. That makes sense because the easiest way to break the law’s intent, which is to limit the influence of money generally and secret or corporate money in particular, is to leave a big loop-hole for candidates to spend and not report.
That’s why it is really curious that out of 29 candidates, 15 reported expenses greater than donations (that’s a deficit, which means a debt) and 14 of those were greater than the $1,000 cap on individual contributions.
No problem, yells a voice from the back of the room. They “self-financed.” Interesting idea and it is the way deputy mayor Ron Ellsworth described his campaign. His expense report shows zero contributions but more than $28,000 in expenses. He’s not alone. There were too many others that also showed unexplained gaps in their spending and revenue. None was as big as Ellsworth’s but some showed a deficit close to half of their expenses. Many of the big ones were winners in the election and since they profited from the slack laws that aren’t enforced and that have no penalty, there’s pretty much no chance they’ll step up and change things.
Under both a plain English reading of the by-law as it is and any understanding of the reason for election finance reports, n one of that is supposed to happen. No unreported contributions and no deficits. We have these laws to make sure that there are no conflicts of interest when councillors vote. We want to make sure all voices are equal and that the people who get heard are not just those with the cash to pay for a candidate’s campaign. We want to make sure everyone can run and stand a fair chance of getting elected not just those with rich backers or who are wealthy enough to “self-finance” a campaign. We want to make sure that everyone - every candidate - is on an even playing field with the same rules of openness and transparency applying to all. Councillors should vote with a clear conscience, not with the cloud of a debt hanging over their heads. The people of the city should have every confidence in the fairness of city elections and in how the city is run and that can only come with transparency and accountability. Right now, that doesn’t exist at city hall and the election reports are a perfect example of how the city isn’t transparent and accountable.
No campaign should spend more than it takes in. The income and outflow should balance. There should be no debts - unpaid bills - since those are potentially as troublesome as open corporate donations. Every contribution by a candidate to their own election campaign, especially to cover shortfalls in fund-raising, should be reported as a contribution to the campaign. There’d be no murk or doubt or room for any suspicion at all. It protects everybody, including candidates.
If campaigns ran deficits, that is there are debts owed, then those are even more problematic. The by-law defines contributions as “money, goods, or services” and as of 2025, none of that can come from corporations or unions. Leaving deficits means there are donations by corporations even if they are unreported. Those debts needed to be reported as such and accounted for somehow since the debt potentially becomes a major conflict of interest for any candidate being indebted to a local business. They cannot write it off as a campaign contribution, either - since there are no donations from corporations or unions - and if some combination of people stepped in to pay off a deficit, those contributions haven’t been reported.
A better approach is the federal one. A candidate’s contributions to their own campaign get reported as such. What’s more, in the case of deficits and outstanding debt, there are reports on that up to three years after an election. Ac countability and transparency. And there are real consequences for misreporting. Ask politicians like Peter Penashue. By contrast, this is a huge problem at the provincial level where we are still working with the first and only provincial finance law introduced in the early 1990s. Reform promised many times since then never showed up because parties thrive on the murkiness of the financial schemes and scams they use to fund their operations. The City of St. John’s is just as bad if not worse.
You will see campaigns provincially and municipally showing deficits but that’s not possible under any reading of the existing finance laws. The debts ought to be covered off as contributions and candidates need to report who was owed money at the end of a campaign. Otherwise, those debts are liabilities that carry huge some ethical implications for indebted incumbents and the winning politician is in a position to influence government action, whether municipally or provincially. In some ways it would be worse to be owe someone money who does business with a government rather than just taking a tidy cheque from them. If we are going to get rid of corporate cash donations, then corporate debt has to be illegal too.
It’s not good enough to disclose those debts to an ethics commission since, as we’ve seen provincially, the house officers themselves often fall short of what’s needed when it comes to ethics and even competence. At the municipal level, like in Sin Jawns, there just isn’t that kind of officer at all. Even if there were such an officer, we’d all be right to have little faith in them since - as this example shows - you can actually break the law and get away with it based on a pretty flimsy excuse.
After all, the city’s candidate webpage says flatly that “the onus is on the candidate to ensure legislative compliance.” It’s a gawd awful sentence but it means ignorance of the law is no excuse. Well, it isn’t most places, except in Sin Jawns where ignorance is not just excused. It’s encouraged, especially if you get elected, and the rules, such as they are, can just be ignored.