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### Viewing cable 08OTTAWA529, TORY "BRAND" SUFFERS ETHICAL BLOW

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08OTTAWA529 | 2008-04-16 19:03 | 2011-04-28 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Ottawa

`

    VZCZCXRO9995
    PP RUEHGA RUEHHA RUEHQU RUEHVC
    DE RUEHOT #0529/01 1071903
    ZNR UUUUU ZZH
    P 161903Z APR 08
    FM AMEMBASSY OTTAWA
    TO RUEHC/SECSTATE WASHDC PRIORITY 7697
    INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE

` `

    UNCLAS SECTION 01 OF 02 OTTAWA 000529

    SIPDIS

    SIPDIS

    SENSITIVE

    E.O. 12958: N/A
    TAGS: PGOV CA
    SUBJECT: TORY "BRAND" SUFFERS ETHICAL BLOW

    REF: A.  OTTAWA 305

    -    B.  OTTAWA 452

    ¶1. (SBU) SUMMARY: Royal Canadian Mounted Police (RCMP) officers
    executed a search warrant at federal Conservative Party headquarters
    in Ottawa on April 15, apparently related to an ongoing legal case
    involving possible Conservative election spending violations in the
    2006 federal election.  The incident thrust a media spotlight on an
    issue that had previously gained scant traction with the public.
    The politically loaded visuals of a police "raid" on a party that
    had vowed to deliver "clean" government likely will dent the
    Conservative "brand," but this is unlikely to be the catalyst that
    will force a new election in the near future.  End Summary

    Bad Press
    ---------

    ¶2. (SBU) With extensive coverage both by the media and by
    representatives of the opposition Liberal Party, the RCMP -- acting
    on behalf of Elections Canada, the independent federal election
    administration -- entered the Ottawa federal headquarters of the
    Conservative Party of Canada on April 15 with a search warrant and
    left with a quantity of unspecified documents.  It was unclear who
    tipped off the press and the Liberals to cover this event.

    ¶3.  (SBU)  In Question Period in the House of Commons later on April
    15, Prime Minister Stephen Harper  deflected opposition charges of
    "scandal," insisting that not only had his party cooperated fully
    with all requests by Elections Canada for documents, but also
    emphasizing that the Conservatives had initiated the civil case
    against Elections Canada, not vice versa.  He maintained that "our
    legal position is rock solid."  Liberal members tried to imply that
    RCMP involvement suggested the possibility of a separate criminal
    investigation, which Conservative members flatly denied. Liberal
    leader Stphane Dion commented that PM Harper "needs to answer very,
    very serious allegations and a behavior that is beyond what we have
    seen for a long time."  The heated exchanges continued in Question
    Period on April 16.

    Complicated case
    ----------------

    ¶4.  (SBU)  Under Canadian law (ref a), political parties and
    candidates are subject to separate election campaign spending
    limits.  Elections Canada believes that the Conservatives in the
    2006 federal election operated a complex and so-called "in-and-out"
    scheme in which the party allegedly transferred more than C$1
    million in national campaign funds to 67 Tory candidates who were
    under their personal election spending limits in their ridings.  The
    candidates allegedly booked the money as local campaign advertising
    expenses, but then wired it back to the party, while applying to
    Elections Canada for reimbursement of the same funds under
    taxpayer-funded election spending rules.

    ¶5. (SBU) After Elections Canada disallowed the claim by ruling that
    the expenses were actually incurred by the national party, the
    Conservatives filed a civil suit in the spring of 2007 to overturn
    the ruling.  The case is ongoing in the Federal Court of Canada.  If
    the Court rules in favor of Elections Canada, the disputed 2006
    expenses would be added to the Conservative Party's national
    campaign expenses and would put the party well over its spending
    cap, in violation of the election law, which prescribes a maximum
    penalty of C$25,000 for the offense.  However, if the Court convicts
    the party of the more serious charge of "willful collusion" to
    exceed spending limits, the party could lose its legal registration.
     Opposition parties have also alleged that the candidates' claims
    for reimbursement amounted to election fraud as well.

    ¶6.  (SBU)  Comment:  The Conservatives campaigned in 2006 on a
    pledge to deliver "clean," transparent, and accountable government,
    Qpledge to deliver "clean," transparent, and accountable government,
    riding a wave of public revulsion over the Liberals' "sponsorship"
    scandal of 2005.  The Conservative "brand" will likely take a
    beating from the unflattering video footage, and even more so if the
    Federal Court rules against the party.  Until now, the opposition
    had been stymied in its attempts to have a parliamentary committee
    investigate the "in-and-out" affair, nor had the public paid much
    attention.  The scheduled parliamentary recess during the week of
    April 21 will provide temporary relief for the Conservatives.
    However, the Liberals will undoubtedly try further to chip away at
    Conservative ethics and the party "brand," and to gain fresh
    traction with their hitherto unsuccessful attempts to link the
    government to other "scandals," such as an inquiry into connections
    between former Conservative Prime Minister Brian Mulroney and a
    German-Canadian lobbyist, and allegations that the Conservatives
    tried to "buy" the vote of independent MP Chuck Cadman (now
    deceased) in order to bring down the former Liberal government.
    Despite their glee at the Conservatives' latest discomfiture, the
    Liberals are probably still not ready to fight a national campaign
    (ref b), so they will try to embarrass the Conservatives without

    OTTAWA 00000529  002 OF 002

    actually bringing the government down in the near future.  For the
    Conservatives, the fallout could be most damaging in vote-rich
    Quebec, where voter disgust over the sponsorship scandal was
    strongest and where the Conservatives hope to add seats in the next
    election.  At a minimum, the latest developments will make it harder
    for the Conservatives to play the ethics card in the next campaign,
    whenever that may be.
    WILKINS

`