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Exercise ‘good judgment’ if confronted with a situation like Duffy affair in future: Gerstein

By Abbas Rana      

Conservative Party of Canada records all fundraising phone calls, says Irving Gerstein.

Former prime minister Stephen Harper will join the Conservative Fund of Canada this month. In the first quarter of this year, the Conservatives raised $5.7-million more than the combined total of the Liberals and the NDP. The Liberal Party raised about $4-million and the NDP about $1.3-million in the first quarter. Conservative MP Deepak Obhrai said the party’s base 'loves' Mr. Harper. The Hill Times photograph by Jake Wright
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The Conservative Party of Canada has no official protocols in place to deal with politically sensitive situations such as former Conservative Senator Mike Duffy’s now legally cleared Senate expense spending issue, but Conservative Fund Canada chairman Irving Gerstein says senior party officials should simply exercise “good judgment.”

That was his advice to delegates at the party’s recent biennial policy convention in Vancouver in a session called “Q&A with the Conservative Fund.”

The retired Conservative Senator, who chairs the highly-effective arm of the party’s fundraising work, told delegates this on May 27 in response to a question from Ottawa delegate Adam Aptowitzer. A lawyer with the Ottawa law firm Drache Aptowitzer, Mr. Aptowitzer asked Mr. Gerstein if the Conservative Party had come up with any protocols to deal with a potential situation such as the one he dealt with in the Sen. Mike Duffy affair. Sen. Duffy’s Senate expenses issue started in 2012. He was charged criminally in 2014 with 31 counts of fraud, breach of trust and bribery, but was recently cleared of all charges.

Mr. Gerstein first asked if Mr. Aptowitzer was questioning his ethics, but when the Ottawa lawyer said he was not, Mr. Gerstein then explained that when he was confronted with this situation he cooperated fully with the RCMP. He also said he gave a speech at the Conservative Party’s policy convention in 2013 in Calgary and shared with delegates the details of how he handled the issue.

Mr. Aptowitzer asked again what protocols were in place now to deal with such incidents and Mr. Gerstein responded by saying: exercise “good judgment.”

Mr. Gerstein, who oversees the party’s finances and takes pride in being called “a bagman,” was appointed to the Senate in 2009 by then prime minister Stephen Harper (Calgary Heritage, Alta.). He retired in February of this year.

Mr. Gerstein came under heavy media scrutiny in relation to the Duffy affair in 2013 when the Mounties released from the Conservative Party, the Senate and PMO officials as part of an investigation into the secret payment of $90,000 that Nigel Wright, chief of staff to then-prime minister Harper, made to cover Sen. Duffy’s housing and living expenses.

According to the RCMP, Mr. Gerstein at first agreed to cover the tab up to $32,000 on Sen. Duffy’s behalf but when he found out the amount was about three times more, he declined. At the party’s 2013 convention in Calgary, Mr. Gerstein said that he refused to reimburse the money that Sen. Duffy owed. He confirmed in the speech the party paid $12,000 plus tax to help the P.E.I. Senator’s legal bills.

“I made it absolutely clear to Nigel Wright that the Conservative Fund Canada would not pay for Senator Duffy’s disputed expenses and it never did,” Mr. Gerstein told delegates in Calgary.

But RCMP Cpl. Greg Horton in an affidavit offered a different version.

“The Conservative Party was initially going to pay the money for Duffy from a Conservative fund when it was believed that the amount he owed was approximately $32,000. The fund is controlled by Senator Gerstein,” said Cpl. Horton. “When it was realized that the cost was actually $90,000, it was too much money to ask the Conservative Party to cover.”

Sen. Duffy was charged with 31 charges of fraud, breach of trust and bribery in relation to his housing, travel and office expenses, and the undisclosed payment he received from Mr. Wright. In April, Ontario Judge Charles Vaillancourt exonerated the P.E.I. Senator from all charges.

After the Q &A session, Mr. Aptowitzer said in an interview with The Hill Times that the Conservative Party deals with millions of dollars annually and a high-profile organization like it must have serious protocols in place to deal with such tricky political situations. He said that it’s not unusual for political party officials to deal with such situations from time to time and they must have strict protocols in place to ensure that they don’t end up in political trouble. Mr. Aptowitzer also said that senior party officials should also be careful to ensure that they don’t put themselves in situations under which they’re to be interviewed by the RCMP.

“That’s why I asked the question, whether or not there are any protocols in place,” said Mr. Aptowitzer. “The answer is it’s just the good judgement of the leadership.”

Mr. Aptowitzer said that Mr. Gerstein showed good judgment by not paying $90,000 to cover Sen. Duffy’s expenses, but added that someone in the hierarchy of the party may make a mistake, in future, if confronted with such a situation. He said it is critical that clear guidelines are established and provided to senior party officials holding leadership positions.

“Mr. Gerstein will not always be in that role, and, so, I don’t know what sort of judgment the next person will have. But, fundamentally, many corporations and public and semi-public organizations have ethical guidelines or investment guidelines and protocols in place in order to avoid stepping in on a landmine,” said Mr. Aptowitzer. “I suppose if Mr. Gerstein had made the opposite decision and had stepped on that landmine and had funded Sen. Duffy’s expenses, we’d be discussing a spending protocol now but the fact is we can rely apparently on his good judgment.”

Conservative MP Tony Clement (Parry Sound-Muskoka, Ont.), former Treasury Board president in the Harper Cabinet, told The Hill Times that his party learned lessons from the Duffy affair, but declined to say if showing “good judgment” is the only protocol that a national political party should have in place to avoid any such politically damaging situations now and in the future.

“We all learned some lessons from the Duffy affair, I have confidence that wouldn’t happen again,” said Mr. Clement. “We’ve all learned some lessons. They probably did a review internally and learned some lessons and that’s appropriate.”

During the Q&A session, some delegates complained to Mr. Gerstein that they felt unhappy and “getting tired” of the over enthusiastic fundraisers making too frequent phone calls. Mr. Gerstein asked those delegates to provide him with specific details of the phone calls that they received from fundraisers. He said that a number of companies make fundraising calls for the party and all calls are recorded. He said the party has access to all the discussions that took place in those calls. Mr. Gerstein assured the delegates that their concerns would be addressed.

Prior to the Q&A session, Mr. Gerstein provided an update of the party’s finances to Conservative delegates. He said the party doesn’t have any debt, although it spent a total of about $42-million in the last federal election which was about eight months ago. The spending cap by Elections Canada in the last election was $54-million. Mr. Gerstein said that for the Oct. 19 election, the party borrowed $28.5-million, but has since paid back the total loan through its Elections Canada rebate, its HST rebate, and by fundraising through the first quarter of this year. In the first quarter of this year, the Conservatives raised $5.7-million more than the combined total of the Liberals and the NDP. The Liberal Party raised about $4-million and the NDP about $1.3-million in the first quarter.

During the speech, Mr. Gerstein also announced that Mr. Harper would be joining the Conservative Fund of Canada as a director in June.

Conservative MPs welcomed the announcement.

“Mr. Harper has been absolutely a strong icon in the party,” said Conservative MP Deepak Obhrai (Calgary Forest Lawn, Alta.) in an interview with The Hill Times, adding that the party’s base “loves” Mr. Harper. “It’s excellent for the party, for him to take this position because he will bring a huge amount of support for our party as we build the coffers for the next election.”

Conservative MP Gerry Ritz (Battlefords-Lloydminster, Sask.), who said Mr. Harper is a big draw to the party’s fundraising events, also said he is disciplined in his messaging and that the party will benefit from his advice on fundraising.

“Certainly, he’s a big draw,” said Mr. Ritz, a former Cabinet minister in the Harper Cabinet.

“I’ve had the great opportunity to travel with him around the world. He raises the issues, he’s very disciplined in his messaging.”

Mr. Clement said that Mr. Harper would provide valuable advice on strategies on how to manage and raise funds.

“You’re there to manage the money,” said Mr. Clement. “The fund devises strategies to raise money which is frequently from people who can donate 10 dollars, 20 dollars, 50 dollars that kind of thing. His role is more to be helping us to make sure the money is managed accountably and efficiently.”

The Hill Times 

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