10/29/2012 12:29 EDT | Updated 12/29/2012 05:12 EST

Group Questions Executive Donations To Penashue Campaign


A public advocacy group is calling for an investigation into donations made by top executives of a prominent St. John's construction company to federal Conservative cabinet minister Peter Penashue's campaign.

Six executives of Pennecon made donations to Penashue's 2011 campaign in the riding of Labrador, with the donations arriving just after he had been elected, according to Elections Canada records.

Chairman Ches Penney made a donation of $1,100, the same amount donated by several others at the company. Two donated $550 each. The limit for a personal donation during the 2011 campaign was $1,100.

Together, the six donated $5,500. Penashue had been successful in raising money for his campaign, bringing in more than $70,000 inside and outside his riding.

Companies are prohibited from making political donations, but there are no restrictions on individuals making donations.

All but one of the donations were made from Pennecon's postal code, and were all received two days after he was elected.

Prior to entering politics, Penashue had formed a joint venture with Pennecon called Miskus Aveni Construction, which has done work at the Voisey's Bay mine site.

Pennecon has been awarded dozens of contracts by the federal government, totalling more than $1.5 million. Many are with the Department of Fisheries and Oceans, involving things such as ship repairs.

Officials with Pennecon were contacted by CBC News, but did not respond to messages.

No evidence of political involvement

There is no evidence that Penashue was involved in awarding these contracts, and Pennecon — a well-established company — has had a long record over the years of handling government contracts.

Still, Tyler Sommers, co-ordinator with Democracy Watch, told CBC News the donations require close scrutiny.

"A full investigation needs to be launched in order to ensure that there was no undue relationship, so there's no preferential treatment that's being given to anyone for any reason," Sommers said.

The donations have raised questions for former Liberal MP Todd Russell, who was unseated in the May 2011 election by 79 votes.

Russell asked whether the donations in question were "about the relationships they were trying to engender with the minister himself, or with particular other interests that the minister may have been involved with."

Penashue, the federal minister of intergovernmental affairs, has come under fire from Opposition MPs since CBC News disclosed last summer that he had overspent during the 2011 campaign.

Earlier this month, CBC News reported that Penashue's campaign had also not paid for thousands of dollars in air travel — some of it involving chartered flights to remote coastal communities — from Provincial Airlines, which agreed to write off bills of more than $17,000.

In a statement, Penashue's office said that his campaign staff had a full understanding of the rules.

"The minister was very clear during his campaign that no corporate donations would be accepted, and that donations to his campaign were to be personal donations made by individuals," the statement said.

This weekend, Liberal Leader Bob Rae called on Elections Canada to launch a formal investigation into Penashue's campaign expenses.

"They constitute serious infringements of the Canada Elections Act and may even bring into question the validity of the election result in a very close race," Rae wrote in a letter to the Commissioner of Canada Elections.

Penashue singled out in Question Period

In Question Period on Monday, Rae hammered Conservative MPs with questions about why they have not asked for Penashue's resignation.

NDP MP Charlie Angus asked, "Would the member for Labrador stand up and take accountability for his actions?"

Ontario MP and Foreign Affairs minister John Baird responded, "There's a new official agent in place that is working with Elections Canada to address some of these issues."

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