Big money returns to Alberta Politics

Above photo: The Alberta Legislature, by Daryl Mitchell

In the dying days of the 2012 provincial election, the Progressive Conservatives were feeling short on funds as they faced off against the Wildrose Party.

Then the party came into a sudden and significant cash infusion: $430,000.

The donation raised eyebrows not only because of the many zeroes, but also because it came via a single bank draft from Katz Group Properties Inc. The cheque represented donations from Daryl Katz, the Katz family, his staff, colleagues and their companies for amounts between $15,000 and $30,000.

Fast-forward five years, and the PCs are no longer a viable political party in the province and rules that once allowed individual donations of up to $30,000 in an election year have been crossed off the books. In fact, there’s a carte blanche ban on corporate donations to political parties now.

But those really big donations — cash amounts that are out of reach for most Albertans — continue. They just come through different channels.

Click image to see financial disclosures.

In the third quarter of 2017, five companies and/or individuals donated $50,000 to the Alberta Advantage Fund, a registered political third party advertiser. In total, the organization tallied over $630,000 in Q3 alone, dwarfing the amounts raised by either the NDP or the UCP in the same period.

It’s openly acknowledged the Alberta Advantage Fund is connected to UCP leader Jason Kenney. But beyond that — for an organization that operates as an elite fundraiser in the province — it’s hard to find information about it. Like, a website.

Political third-party advertisers, also called political action committees or PACs, are relatively new players in the province. They became more important after the NDP passed Bill 35, The Fair Elections Financing Act, in 2016, which banned corporate and union donations, and capped individual donations at $4,000 annually.

Registered political advertisers report to Elections Alberta if they plan to spend at least $1,000 on political advertising outside of the writ period.

Critics argue the language in the new legislation is so vague that anything, and at the same time nothing, can count as election advertising, depending on interpretation

Alberta’s legislation states that political advertising is the “transmission” of an advertising message that promotes or opposes a registered party, leader, MLA, candidate or leadership candidate.

It also includes advertising a message that “takes a position on an issue with which those political entities may be associated.”

“PACs can do anything they want, they can push any agenda, any party’s agenda,” said Liberal leader David Khan in an interview earlier this month.

“They can manipulate anything they want. They could have full time staff going door-to-door canvassing and getting elector’s names; they could be pushing fake polls out; they could be running fake Twitter accounts.”

Alberta’s Chief Electoral Officer Glen Resler echoed some of Khan’s characterizations at a meeting of the Standing Committee on Legislative Offices on November 7th. He noted that third-party advertisers can:

  • Perform research activities
  • Perform polling
  • Work on data analytics
  • Organize fundraisers
  • Sell party memberships
  • Promote or oppose a party candidate or issue

There are spending limits for advertising that falls within an election period. But, as Resler noted at the meeting, “advertising is context dependent.”

“For example, when we look at legitimate opinion polling, it does not fall within the advertising definition. It does, however, if we encounter push polling, where an advertising message is being delivered to sway voters using manipulative questions,” Resler told the committee.

Therefore, a group that commissions a political poll and passes the information to a party does not have to account for funds used for that activity.

That’s not to mention that Internet advertising — be it running a full-time Twitter account or running an Internet campaign — is mostly not captured as “election advertising” either.

“You can post (something) on YouTube. It’s a free service. If you wanted to push it and you wanted to promote it, say, through Facebook… and you paid to have that up front so everyone would see that advertisement, then it would become paid advertising, and we’d look at the cost. Otherwise, if it’s any other forum that would be no charge, it’s exempt,” Resler told the committee.

Liberal leader David Khan. Photo via Twitter

For Khan, the rise of these groups is an assault on democracy.

“PACs are unregulated and unaccountable political agents that can raise money from anywhere and spend any kind of money,” he said.

“Fundraising by PACs is not regulated at all – they can take money from foreign sources in unlimited amounts and they can spend it on anything… PACs can pay for polling, or Jason Kenney’s truck, staff salaries, and research, and they can buy as much TV air time as they want until the writ is dropped.”

Khan blames the NDP government for not stepping up to change the rules that currently allow unlimited donations and a wide berth for spending opportunities. The government has indicated it’s exploring what to do about PACs, but hasn’t detailed what that might look like.

Khan says the NDP isn’t keen to change the rules because it benefits from its own PACs or other organizations that operate like them.

Most observers point to the Alberta Federation of Labour (AFL), which is registered as a political third-party advertiser as AFL Inc.

AFL President Gil McGowan said the new legislation forced his group to become a PAC, even though it is carrying out work that is largely expected of a labour organization. The group doesn’t “hoard” money for an election year, he said, but carries out regular campaigns for the issues the organization is always working on.

The AFL has been lobbying for the past two years for changes to the labour code and the employment standards code – as it has done on similar issues since the group’s beginning.

“This is the stuff you’d expect us to do,” he said. “We’ve always done it.”

McGowan said the federation is spending thousands of dollars to ensure compliance with the act, and regularly sorts through receipts to determine if an item is considered “internal” business or “public” advertising.

“We don’t have a problem having to disclose the money spent on advocacy campaigns but we’d like to see a distinction between civil advocacy groups and new partisan political action funds that only exist to knock down political opponents or shore up parties they support.”

He also questioned why similar groups – on the other side of the political spectrum – have not registered as political third-party advertisers. He pointed to the Canadian Taxpayers Federation and the Canadian Federation of Independent Business.

Daniel Lee, the director of election finances at Elections Alberta, says his organization is aware there are groups acting as political third-party advertisers that haven’t registered.

“I would say there are some – how many, we don’t know because we’re not aware of everyone.”

Lee said that once the office becomes aware of possible breaches of the legislation, they make enquiries, which can then ramp up into an investigation.

These fundraising issues are likely to come up during a by-election this fall in the Calgary-Lougheed riding, with PAC critic David Khan running for an open seat created when a UCP MLA stepped aside to give that party’s leader, Jason Kenney, an opportunity to get to the Alberta Legislature. Dr. Phillip van der Merwe is the NDP candidate in the by-election and the Green Party of Alberta’s leader Romy Tittel is also running.

Alexandra Zabjek

Alexandra Zabjek is a journalist who has spent the last 10 years covering the politics and people of Edmonton. In addition to freelance work, she is a contributor at CBC and is co-host of The Broadcast: A Podcast About Women and Politics.