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The ABCs of Local Election Campaign Contributions, Part II: Prohibited Contributions and Elections BC’s Role in Compliance

by Sal Robinson


The deadline for 2022 civic election candidates and parties to submit reports to Elections BC was fourteen months ago.  Since then, we have seen two Vancouver parties in the news for not complying with the rules:  Progress Vancouver and ABC Vancouver.  Elections BC was relatively swift in imposing an administrative penalty on Progress Vancouver, whose record-keeping was a shambles: it has been de-registered as an electoral organization and its candidates barred from running in 2026.  Monetary penalties for Progress Vancouver’s acceptance of prohibited contributions are yet to be announced. 

 

And what of ABC Vancouver?

 

Last June I delved into the public record of election donations and discovered dozens of over-contributions to ABC’s campaign.  Not quite believing what I was seeing, I raised the issue with TEAM’s board of directors, where action was decided on.

 

In her July 2023 letter to B.C.’s Chief Electoral Officer,  TEAM president Cleta Brown described the findings in general terms  –  estimating $115,000 in possible prohibited contributions  –  and offered to provide a detailed list.  In October, we included our data with Cleta’s second correspondence, in which she made this observation:  “The scope of the apparent violations is significant and strongly points to a pattern of misconduct  –  of deliberately soliciting and accepting unlawful contributions – rather than occasional inadvertent lapses.” Below I offer some examples of why such a conclusion would reasonably be reached.

 

We weren’t far off; ABC Vancouver returned over $116,000 to its supporters in December 2023. 

 

In her latest letter to the Chief Electoral Officer, which also raised the problem of the disappearing data described below, Cleta asked, “How long will it take before Vancouver’s voters are made aware of the magnitude of the financial transgressions made by the campaign of the party now holding a majority of city council seats?”

 

How long, indeed?  It wasn’t until May 2020 that Ken Sim’s prohibited loan to the NPA 2018 campaign appeared in an amended disclosure, and August when it made the news.  

 

There is no question that the Elections BC investigators have a complicated and painstaking assignment in scrutinizing submissions from all over the province.  While over-contributions and  donations from out-of-province residents may be relatively straightforward, indirect contributions (and TEAM members have advised EBC of some questionable ones) are not so obvious.

 

But it’s hard to be patient! 

 

This explainer is about what’s supposed to happen when a prohibited contribution or loan is accepted by a candidate or elector organization, and how members of the public can find out who has made or accepted one.  Vancouver is the example, but the rules are the same province-wide.

 

See The ABCs of Local Election Campaign Contributions for background on the rules about making and keeping records of election contributions.


 

Accepting a prohibited contribution gives a candidate an advantage in that the candidate did not need to seek a contribution of that amount from an eligible source, saving the candidate time during a busy campaign.” – Adam Barnes, EBC Director of Investigations, in his enforcement notices to errant candidates


The consequences for making or accepting a prohibited contribution or loan are outlined in the provincial Local Elections Campaign Financing Act (LECFA) which is administered by Elections BC (EBC), a non-partisan office of the legislature.  The campaign financing rules create accountability and transparency by requiring financial agents to record and disclose detailed information about financial activities, including campaign contributions, election expenses, and other income and expenditures related to a campaign.

 

All donations (money, services, etc.) are considered campaign contributions.

 

Answered below:

 

  1. WHY are some campaign contributions or loans “prohibited”?

  2. WHO must ensure that prohibited contributions do not unfairly enrich a campaign?

  3. WHEN must a candidate’s or elector organization’s (EO’s) financial agent act to return it?

  4. WHAT is the role of Elections BC?

  5. HOW can the public find out about who made and took prohibited contributions?

  6. WHAT about penalties?


 

1.     WHY are some campaign contributions or loans “prohibited”?   

 

A 2017 amendment to LECFA set donation limits and eliminated all but personal donations in order to reduce the perception of a conflict of interest or preferential treatment by candidates or political parties toward large financial supporters such as unions, corporations and lobby groups.  As a result, in a calendar year eligible individuals may contribute up to a limit set according to LECFA S. 30.04 by the Chief Electoral Officer.

 

A campaign contribution is prohibited and must be returned if it was:

  • made by more than one person (e.g. a couple)

  • made by a corporation or organization

  • made by someone who is neither a Canadian citizen nor a Permanent Resident

  • made by someone who doesn’t reside in British Columbia

  • made by someone who has already donated the maximum amount allowable in the calendar year to an EO and its endorsed candidates

  • made to someone other than the financial agent or someone they have authorized

  • made by an anonymous person, if the amount is more than $50

  • indirect, meaning given to someone else to donate

  • indirect, meaning made with someone else’s money


These prohibitions also apply to loans from people, but not from savings institutions.

 

2.  WHO must ensure that prohibited contributions do not unfairly enrich a campaign?

 

The financial agent has this duty: 

 

The financial agent for a candidate or elector organization must record and maintain records sufficient to allow compliance with the disclosure requirements under this Act. – LECFA, S. 22.

 

For the examples below, Corey Sue was appointed financial agent (FA) for ABC Vancouver on November 30, 2021.  Until Ken Sim appointed Corey Sue as his FA on September 14, 2022, he acted as his own FA.  These dates are found in their scanned reports.

 

3.  WHEN must a candidate’s or EO’s financial agent act to return a prohibited contribution?

 

  • If a financial agent becomes aware that a contribution falls into the “prohibited” category, it must be returned to the donor within 30 days according to Section 28 (1) of LECFA.

  • A financial agent who contravenes this section commits an offence – LECFA, S. 28 (4).

 

“30 days” stretched to two years in these examples and many others.

 

Example 1 – Candidate Ken Sim acting as his own FA:

  • The contribution limit for 2021 was $1239.18. 

  • On April 6, 2021 Ken Sim accepted a $1200 contribution from a donor.  When the same donor gave him another $1200 on June 16, his records should have made him aware that most of this donation was prohibited because that donor had already given him $1200 and had only $39.18 “contribution room” for 2021. Sim should have returned $1160.82 by July 16. He did not.

  • When the same donor gave him another $1200 on November 1, his records should have made him aware that this was a prohibited contribution because that donor had, by then, contributed the limit for 2021. He should have returned the $1200 by December 1. He did not.

  • When the same donor gave him yet another $1200 on November 17, his records should have made him aware that this was a prohibited contribution because that donor had contributed the limit for 2021. He should have returned the $1200 by December 17. He did not.

  • Sim returned none of these three prohibited donations within the 30-day window.  In fact, it was not until more than two years after the December 17 donation that $3560.82 was returned to that donor, according to ABC’s amended 2022 General Election Disclosure Statement filed December 20, 2023.

 

Example 2 – Corey Sue in his function as ABC’s FA dealing with other endorsed candidates:

  • The contribution limit for 2021 was $1239.18.

  • On October 12, 2021, Ken Sim accepted a $1200 contribution from a donor.

  • The same donor gave $1200 to Rebecca Bligh on November 5, $1200 to Lisa Dominato on December 13 and $1200 to Sarah Kirby-Yung on December 29. These four candidates were independent in 2021, so the donor was acting within the rules. But…

  • When these four became ABC-endorsed candidates and transferred their campaign funds* to ABC, their new FA had a duty to examine their records and catch that this donor had made contributions totalling $4800 in 2021, of which $3560.82 was prohibited.

  • It was not until more than two years later that $3560.82 was returned to that donor, according to ABC’s amended 2022 General Election Disclosure Statement filed December 20, 2023.


Example 3 – Corey Sue in his function as ABC’s FA dealing with Sim’s records:

  • The contribution limit for 2022 was $1250.

  • On January 18, 2022 Ken Sim accepted a $1200 contribution from a donor.

  • When the same donor gave $1250 to ABC on October 4, Sue’s records should have made him aware that most of this donation was prohibited because that donor had already given $1200 to an ABC-endorsed candidate and had only $50 “contribution room” for 2022. Sue should have returned $1200 by November 3. He did not.

  • In fact, it was not until more than two years later that $1200 was returned to that donor, according to ABC’s amended 2022 General Election Disclosure Statement filed December 20, 2023.


The Example 3 scenario is one of 47 instances of donors giving to both candidate Sim and EO ABC.  The total over-contribution from these supporters was $54,793.62 and ABC held on to the money for an average of 24 months.  If they had been 47 prohibited loans, the effect would be the same.

 

4.    WHAT is the role of Elections BC?

 

Elections BC’s responsibilities under LECFA include:

  • accepting, reviewing and publishing disclosure statements, annual financial reports and supplementary reports;

  • undertaking investigations and audits.


After an election, each EO or independent candidate must submit to EBC a disclosure statement listing significant donors (those who contributed $100 or more) to its campaign.  The deadline to do this for the 2022 election was January 13, 2023. 

  • These statements are scrutinized by EBC staff for compliance with LECFA.

  • In July 2023, TEAM for a Livable Vancouver identified dozens of prohibited contributions to ABC and wrote to the Chief Electoral Officer at that time; TEAM provided EBC with a spreadsheet of its data in October 2023.


Amendments to the disclosures may be filed if errors are discovered and/or changes need to be made.  ABC has filed four amendments to its original disclosure.  The second contained a substantial list of prohibited contributions returned on December 20, 2023. The third contained additional prohibited contributions returned on July 11, 2022.

 

5.    HOW can the public find out who made and took prohibited contributions? 

 

We can, until we can’t, by looking them up.

  • The names, dates and amounts of contributions over $100 are entered in the Financial Reports and Political Contributions System (FRPC).  Anyone can search by donor name or by recipient.

  • Once a prohibited contribution has been returned, there may be no trace of it in the Local Election Contributions Search Results  (if you see $39.18 as a donation in 2021, it was probably a $1239.18 donation of which $1200 was returned, because $39.18 by itself doesn’t meet the “significant” - $100 or more - test).

  • Two of the four contributions made by Ken Sim’s 2021 donor in Example 1 are no longer found in the search results.  To find them you’d have to (a) know they existed and (b) know which amended disclosure (Sim or ABC) to look in.

  • TEAM wrote to Elections BC in March 2024 requesting that prohibited contribution amounts remain in the searchable database  - along with the reason they were prohibited and the date of their return - in the interest of transparency.

  • When I exported the contribution data from FRPC on October 23, 2023, the search results for contributions to the ABC municipal campaign totalled $2,192,081.47. The same search on March 21, 2024 yielded a total of $2,075,348.59, indicating $116,732.88 in returned contributions.  Prohibited contributions totalling $12,761.64 were returned to donors on July 11, 2022, so did not appear in the data I exported last fall. Only scrutiny of  ABC’s more recent amended disclosures filed in February 2024 would turn them up.

 

6.    WHAT about penalties?

 

The B.C. Chief Electoral Officer decides if a candidate or EO accepted a campaign contribution that is not in compliance with LECFA, and he determines the amount of any monetary penalty.  He must notify the individual or organization of non-compliance within seven days of making such a determination, and of the related penalty. 

 

  • An individual or organization that makes or accepts a prohibited campaign contribution is liable to pay a monetary penalty of up to double the amount of the prohibited contribution.

  • A financial agent that does not properly return or remit a prohibited contribution is liable to pay a monetary penalty of up to double the amount of the prohibited contribution.

  • Since the 2022 civic election, nine candidates (none in Vancouver) have been handed monetary penalties for accepting a prohibited campaign contribution.

  • Each of the nine candidates mentioned above accepted a single prohibited donation ranging from $500 to $1900.  The penalties ranged from $250 to $900.

  • ABC has been required to return dozens of prohibited donations, so far.  See above for the cumulative value of only 47 of them. 

  • Penalties and the reasons for them are posted online. The most recent update was March 5, with seven penalties since the previous update three months earlier.

 

A conviction under S. 84 of LECFA (basically, providing false or misleading information in a disclosure or amendment) may result in a candidate being removed from office.  But the potential penalty for the offence of having accepted and returned prohibited contributions, provided the transactions were reported, is only monetary.

 


 

* (Sim transferred $32,500 to ABC in 2021 and another $225,000 between August 10 and November 21, 2022. In 2022, Bligh transferred a total of $25,100 between September 19 and October 14; Dominato transferred a total of $80,110.82 between September 12 and December 31; Kirby-Yung transferred $30,874.82 on October 17.)

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