05/01/2013 12:58 EDT | Updated 07/01/2013 05:12 EDT

Daryl Katz Donations: Alberta Tories, Katz Group Cleared In $430,000 Election Scandal


EDMONTON - Election officials have cleared Alberta's Progressive Conservative party and Edmonton Oilers owner Daryl Katz of wrongdoing in a $430,000 campaign contribution last year.

Critics say the case has exposed loopholes in campaign funding rules that are so gaping, such contributions should be banned altogether.

Chief electoral officer Brian Fjeldheim says there's no evidence that a $430,000 bank draft organized by Katz and delivered to Premier Alison Redford's Tories a week before voting day in April 2012 broke fundraising rules.

By law, individual donations may not exceed $30,000.

"The investigation revealed that this was not a single contribution of $430,000," Fjeldheim wrote in a report made public Wednesday,

"There were in fact 17 contributions."

He confirmed the money was delivered to Redford's party on April 16, 2012. The cash represented 20 per cent of the entire Tory campaign war chest.

"Because of a perceived urgency (by the Tories) to utilize funds to purchase advertising during the final week of the campaign, the legal propriety of a bulk donation was discussed and subsequently agreed upon," wrote Fjeldheim.

Redford's team won last year's April 23 election handily with 61 seats to 17 for the Wildrose party in the 87-seat legislature.

The donation made headlines last fall when news reports said the money may have come in one $430,000 cheque from Katz alone.

Katz and Edmonton city councillors have been seeking $100 million in provincial money for a new hockey rink for the National Hockey League Oilers. Redford has refused, but has said the city is free to use infrastructure grant money it gets from the province.

Fjeldheim said his investigation showed that Katz's friends, family and related corporations contributed properly and that the money was paid soon after the bank draft was sent.

The one exception, said Fjeldheim, was the Katz Group's chief financial officer. Paul Marcaccio splits his time between Alberta and Ontario. Fjeldheim deemed Ontario to be the primary residence, making Marcaccio ineligible to donate to Alberta elections.

Marcaccio and the Tory party have said Marcaccio's $25,000 contribution was returned. The elections office has given him a letter of reprimand.

In Calgary, Redford said the party is pleased with Fjeldheim's conclusions and stands by what it said in the fall.

"We were confident with respect to the work that we had done."

Justice Minister Jonathan Denis said last fall that Katz, his family and friends were smeared in what Denis called an Opposition "Wildrose witch hunt."

"It's time they stop maligning these individuals and actually go and apologize," Denis said at the time.

Wildrose Leader Danielle Smith said even though Fjeldheim has decided that most of the money was donated according to policy, the donation violated the spirit of the rules and the Tories should pay it all back.

"Even if Elections Alberta doesn’t see anything wrong with a single entity delivering hundreds of thousands of dollars to a party in this manner, Albertans certainly do," said Smith.

NDP critic Rachel Notley said if corporations are allowed to play fast and loose with funding rules, it's time to scrap union and corporate donations altogether.

Unions are deep-pocket supporters for the NDP. Notley said a ban on those donations would take a $200,000 bite out of the party's bottom line, but suggested it would be worth it.

"This decision ensures that any corporation can drive a great big truck through an ever-growing set of loopholes in our financing legislation in order to make huge donations," she said.

Liberal Leader Raj Sherman agreed.

“Politics in Alberta is too much about money and not enough about people,” he said.

"Democracy cannot be for sale, or even appear to be for sale.”

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