TORONTO (January 5 - September 19, 1996) - Following a series of routine questions regarding Freedom Party's 1993 annual financial return, Ontario's Commission On Election Finances accused the party of "overestimat(ing) the value of a contributed item", and demanded a cheque payable to the Commission in the amount of $1,150 if the official receipt in question could not be retrieved.

The $1,150 represented the difference between the Commission's estimate ($400) and Freedom Party's estimate ($1550) of the value of a Sony Super Beta hi-fi video tape recorder (Model SL-HF750), which was contributed to the party.

Failure to comply with Commission rulings may result in the deregistration of an Ontario political party. The Commission's terms of compliance were unusually intimidating and punitive, given that there has never been so much as a single hint of any contraventions in Fp's 10-year relationship with the Commission. It is well within its powers to simply cancel any incorrectly issued receipts directly through Revenue Canada, and to leave it at that.

What made the Commission's stance suspicious was the fact that the Commission, as per its own request, was provided with a copy of a personal receipt from the contributor in the amount of $1550, and no further objections were raised until it pronounced its decision.

In a strongly worded letter to the Commission's compliance officer, Eileen De Calderon, Fp president Robert Metz informed her that a special meeting of Fp's executive was called on February 21, 1996 to discuss the Commission's ruling: "We have arrived at the consensus that Freedom Party cannot comply with the terms as set out in your January 5 letter."

The five-page letter outlined many reasons for Fp's refusing to comply, including charges that the Commission's ruling was incorrect and unaccountable, that its decision offered no recourse or appeal process, that its valuation was contrary to the Elections Finances Act, and that the Commission's valuation was retroactive.

"I am certainly capable of justifying the value assigned," wrote Metz, "and would have welcomed an opportunity to do so had it been offered to me. Quite frankly, I would have expected a friendly call, as has been the Commission's usual approach to audit matters in the past.

"Should the Commission care to re-consider this case," he concluded, "I am confident that our valuation of the VCR in question will be shown to be entirely appropriate and well within Commission guidelines."

Instead of providing a written reply to our request, the Commission chose to conduct its first-ever direct audit of Freedom Party's premises and records. (Officially-registered political parties in Ontario are audited annually, with filings due at the Commission each May 31.)

Upon arriving at our 240 Commissioners Road office in London on March 26, 1996, Executive Director Gordon H. Kushner and his assistant proceeded to request documentation for receipts issued up to five years past.

"Boy, these guys keep pretty good records," he was overheard saying to his assistant, as documentation for each requested receipt was consistently provided.

Little was said about the valuation of the original item in question, other than in Kushner's outlining the general process to be followed in the valuation of any good or service donated to a political party.

Curiously, most of the discussion pertained to the Commission's concern that the rent paid ($850/mo) for Freedom Party's (via official receipts) offices was 'overvalued'.

Kushner went on at length about the possibility that the building's landlords may not have been filing their tax receipts appropriately, even though this issue was well beyond anything that could possibly be addressed by anyone at Freedom Party. (Contributors are under no obligation to use their official receipts, nor is it the function or responsibility of a political party to follow-up on how individuals file their personal tax returns.)

He commented that, among other things, the traffic flow going by Fp's London offices was too low to justify the rent paid. (Freedom Party's offices are located at the corner of Knights Hill Road and Commissioners Road, where the latter widens from three to five lanes, but the office front, which provided Kushner with his view, faces the side street, Knights Hill Road.) Kushner offered no indication as to what level of traffic flow would be sufficient to match our current rent paid.

No issues were resolved during the Commission's audit.

In an April 3 1996 letter, faxed and sent by 'double registered mail', Kushner thanked Metz for his cooperation during the Commission's audit, and on the issue of the contributed VCR's value, again ordered "Freedom Party to pay the $1,150 difference to the Commission to correct this apparent contravention of the Elections Finances Act."

Metz responded by demanding that the Commission "state what this 'apparent contravention' is, in writing, and provide us with evidence of any such contravention. You have referred to 'three quotes from electronics dealers'. Please provide us with copies of these quotes." Metz also informed Kushner that he had contacted the electronics dealers in question, and that they each agreed that Fp's evaluation of the VCR was perfectly justifiable.

The Commission never did produce any of the requested information. However, Kushner later wrote Metz that "the quotes we received were oral although you seemed to get much the same information." (Somehow, an $1150 difference in opinion can be regarded as "much the same information"!)

Kushner also listed four other receipts, two from 1994, and one each from 1993 and 1992 respectively. He informed Metz that "the tax credit receipts issued for the two computers and the typewriter will be invalidated." He requested that Metz provide him with "quotes from three businesses that deal with such second hand equipment and present these to the Commission in writing."

"Your request that we obtain three quotes from second-hand equipment stores is not only inappropriate and premature," he responded, "but amounts to nothing less than asking us to provide evidence for a decision you apparently have already arrived at. That is the Commission's responsibility, not ours. It's up to US to justify OUR evaluation of the receipts, not your (evaluations)."

Metz also demanded that the Commission explain why it invalidated official receipts going as far back as 1992 before Freedom Party was given any opportunity to investigate or respond. "Also," he demanded, "please provide us with the specific contraventions regarding EACH of these receipts, so that we can be ABLE to respond."

In yet another turnabout, Kushner responded by saying that "the Commission has not yet invalidated any receipts. It is a proposal at this time." (The quote four paragraphs above was taken verbatim from Kushner's previous correspondence. That's a 'proposal'?!?)

In its apparent effort to find SOME kind of contravention on Freedom Party's part, Kushner demanded that we "reconsider" our office rental agreement.

"Inquiries in the mall where you have your offices," wrote Kushner, "indicated that a fair rent for your premises would be $1 per square foot..."

He noted that there was no written rental agreement (which has never been a requirement), and informed Metz that "the Commission will invalidate all the tax credit receipts issued in 1994 as payment for rent in 1995." The latter was particularly surprising, since the Commission had, in advance, explicitly approved Freedom Party's prepayment of rent arrangement when the party first moved into its new premises.

Kushner also ordered Metz to "retrieve and return to us all those tax credit receipts issued in 1995 for 1996 rent or make payment to the Commission the excess value of the rent."

This prompted a response not only from Metz, but from the owners of the property where our offices are located.

"I am one of the owners of the above property," wrote landlord and Freedom Party supporter David Southen. "I would like to thank you for skulking around my property and disturbing my tenants and asking them to disclose to you confidential information. You allege that tenants at 240 Commissioners Rd W. pay $1 per square foot. Explain to me how you calculated this amount. None of the tenants there pay that amount of rent.

"You also make mention that there is no written agreement," he continued. "In spite of what you may think, you will find that it is entirely legal and proper for parties to conduct their business affairs without written documentation. In another age, it was a badge of honour to deal verbally with each other, without the need of a written contract. At this point, I see no reason to change that."

Southen went on to attack the Commission on a broader basis, and challenged the Commission's motives for its directed harassment against Freedom Party:

"I think that it is particularly despicable that an organization I pay taxes to support comes sniffing around my property. Has the government mandated that you eliminate small or fringe parties? Did the Freedom Party's ruthless criticism piss off the government so badly that you were told to harass them? Why are you wasting your time on minor issues? That's the thing that really interests me."

In a defiant stance against the Commission, Southen concluded that "this year I'm deducting the receipt I've been issued by the Freedom Party. If you don't like that, I guess I'll be seeing you and your band of toadies in court. Perhaps there, in an open and public forum, we'll get to the truth of why you're snooping around areas which do not concern you."

Metz added his voice to Southen's:

"We reject your request that we formalize a rental agreement subject to the Commission's terms. Since neither we nor our landlords have any desire to do so, any such 'agreement' would have to be forced upon us by the Commission, and would have to be written and drafted by the Commission. If the Commission actually has such authority, please advise."

After consulting its legal counsel, and after holding several 'in camera' meetings regarding Freedom Party's position, we were informed on September 19, 1996 that "the Commission met on September 18, 1996 and reviewed all of the outstanding issues related to Freedom Party."

Surprisingly, the Commission ordered only minor name changes to two receipts pertaining to Freedom Party's rent, neither of which affected the amounts on those receipts.

All other matters were dropped.

Despite its inability to demonstrate any contraventions on the part of Freedom Party, "the Commission asked that the party be reminded that it has a responsibility to ensure goods and services are contributed and recorded at their proper value."

No doubt, the Commission's frustration with Freedom Party was a 'contributing' factor (no pun intended) in its recent proposal to abolish tax credit receipts for goods and services contributions.

In its February 1997 newsletter, the Commission announced that "There's potential for abuse of the tax credit system if overvalued receipts or receipts for questionable goods and services are issued."

Until the legislature passes the proposed amendment, it's politics as usual.

There were many other issues and details in our dispute with the Elections Finances Commission that were not covered in this article. Copies of all correspondence regarding this matter are available to Freedom Party members and supporters on request. Contact us!

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Page last updated on April 28, 2002