The Commissioner of Canada Elections laid four charges against Ontario MP Dean Del Mastro under the Canada Elections Act. Shortly afterward, the prime minister's office said he "was no longer a member of the Conservative caucus."
Del Mastro issued a statement saying he was stepping down from caucus until the matter is resolved.
"As I have consistently stated in the past, I entirely reject these allegations and look forward to the opportunity to defend myself in court," Del Mastro wrote, adding that he continues to fully support the government.
Since March, four others have left the Conservative caucus — Senators Mike Duffy, Patrick Brazeau and Pamela Wallin over improper housing and travel claims, and cabinet minister Peter Penashue over ineligible campaign expenses.
Del Mastro and his former official agent, Richard McCarthy, each face three Canada Elections Act charges in connection with a $21,000 personal cheque Del Mastro wrote to a political consultant shortly before the 2008 campaign.
The two are charged with exceeding the legal election spending limit, filing a campaign return that was false or misleading, and filing a return that omitted required information.
Del Mastro is also charged with exceeding the political contribution limit of $1,000 when he wrote a $21,000 personal cheque that allegedly went to his own campaign. The funds were paid to an Ottawa-based consultant who later did campaign work, but only $1,575 was ultimately claimed on the campaign return.
A conviction under the act can carry fines of between $2,000 and $5,000, a sentence of up to five years in prison, or both. The charges have not yet been proven in court.
Just last week, Del Mastro was shifted to the economic development portfolio in his duties as a parliamentary secretary.
Earlier this year, Del Mastro lashed out at Elections Canada by saying they had conducted their investigation with "malice and contempt," and alleged that the agency never discussed their allegations with him before they appeared in the media.
He has said the $21,000 cheque to Holinshed Research was for services made outside of the campaign period.
Harper, who was in New York on Thursday to take part in an economic panel discussion, refused to take questions about the charges. But they are sure to come as a blow to a Conservative government still reeling from the fallout over disallowed expense claims made by senators Duffy, Wallin and Brazeau, all of them former members of the Tory caucus.
Penashue was forced to leave his cabinet post and run in a byelection in 2013 after it was revealed his campaign had received ineligible expenses that were subsequently repaid. He lost his seat to Liberal rival Yvonne Jones.
"In our electoral system, it is fundamentally important the spending and contribution limits enacted by Parliament be respected," Commissioner of Canada Elections Yves Cote said in a statement.
"It is also essential that the reports and information provided to Elections Canada be accurate and truthful."
NDP House leader Nathan Cullen praised Elections Canada for its "excellent job" in pursuing the case.
"This is an incredibly serious and bad day for the Conservative Party of Canada, yet an important day for Canadian democracy in the defence of Canadian's ability to vote freely and fairly in our elections," Cullen said.
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