Conservative Search Warrant Request

Superior Court of Justice

In the Matter of an Application pursuant to Section 487of the Criminal Code for a

Search Warrant

Aoplication (Section 487 Criminal Code)

An ex parte application for a Search Warrant, pursuant to Section 487 of the Criminal Code, will be made to the presiding Judge of the Superior Court of Justice in and for the Province of Ontario. The following documents will be filed with the Application:

Information of Ronald Lamothe with attached appendices; Search Warrant; Assistance Orders

o Accountant o Data Administrator

Sealing Order.

Dated at ronto, Ontari 2 his Y day of &J ,

kjw~J Ronald Lamothe (applicant) Assistant Chief ~nvesti~ator Office of the Commissioner of

Canada Elections

INFORMATION TO OBTAIN A SEARCH WARRANT

TABLE OF CONTENTS THINGS TO BE SEARCHED FOR: ..................................................................................................................... 2

PLACE .................................................................................................................................................................... 4

OFFENCES ............................................................................................................................................................. 4

RELEVANT LAW ................................................................................................................................................. 5

GROUNDS FOR BELIEF ...................................................................................................................................... 6 OVERVIEW .............................................................................................................................................. 6 BACKGROUND ........................................................................................................................................ 8

GROUNDS FOR BELIEVING THAT THE OFFENCES DESCRIBED HEREIN HAVE BEEN COMMITTED ............................................................................................................................................................................... ! I

REFERRAL TO THE COMMISSIONER OF CANADA ELECTIONS ................................................. 1 1 REVIEW OF MATERIALS PROVIDED WITH THE REFERRAL .................................................... 12 CONSERVATIVE PARTY OF CANADA COMMENTS ON MEDIA BUY ........................................ 16 REVIEW OF RECORDS PROVIDED BY ELECTIONS CANADA ..................................................... 17 MEDIA BUY TRANSACTIONS AS DESCRIBED IN DOCUMENTS PROVIDED BY ELECTIONS CANADA ................................................................................................................................................. I 9

INTERVIEWS .................. .....-........-................................................................................................................... 20 INTERVIEW OF SENIOR OFFICERS OF RETAIL MEDIA ........ ........................................-............. . 20 INTERVIEWS OF PARTICIPATING CANDIDATES and OFFICIAL AGENTS ................................ 23

REVIEW OF RECORDS PRODUCED BY RETAIL MEDIA ............................................. ........... ................ 38 RETAIL MEDIA INVOICES ................................................................................................................. 39 RETAIL MEDIA â‚¬.MAI .......................................................... ..-. ...................................................... 4 I

.............................. ...................................................*........... OBSERVATIONS .... .......- ...-.......................-..... 32

................................................ ................................................ REASONABLE BELIEFS - ........._. ................-... 56

GROUNDS TO BELIEVE THE LOCATION TO BE SEARCHED IS THE SAME LOCATION NAMED IN ....... ........ THE WARRANT .... ...............-............... .......................-........................... .......*.-............ ........-....... 58

GROUNDS TO BELIEVE THAT THE THINGS TO BE SEARCHED FOR ARE CURRENTLY AT THE LOCATION TO BE SEARCHED .......-...........................................--.......................................... ..................... 59

GROUNDS TO BELIEVE THE THINGS TO BE SEARCHED FOR WILL AFFORD EVIDENCE OF THE OFFENCES NAMED ........................................................................................................................................... 60

..................................................................................................................................... ASSISTANCE ORDERS 66 GILLES ROBILLARD ............................................................................................................................ 66 DATA ADMINISTRATOR ..................................................................................................................... 67

...................................................................................................................................................... CONDITIONS 67

GROUNDS FOR SEALING ORDER ........ ....................................................................................................... 67

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CANADA

Commissioner of Canada Elections Identifier No. 1700- 10M06-6-H-1

Province of Ontario


Form I Criminal Code Section 487

THIS IS THE INFORMATION OF:

Mr. Ronald Lamothe, Assistant Chief Investigator, Office of the Commissioner of Canada Elections,

(Name and occupation of Informant)

of the CITY OF Ottawa, in the PROVINCE OF Ontario, hereinafter called

the Informant, taken before me.

THE INFORMANT SAYS THAT:

THINGS TO BE SEARCHED FOR:

The following things, documents or data recorded or stored by means of any device, are sought:

1. Correspondence and e-mails between or among representatives of the Conservative Party of ~anada (including candidates, official agents and regional organizers), the Conservative Fund Canada, Retail Media and its related companies and production companies including Yield or Yield Integrated, Republik Publicite + Design Inc;

Invoices, purchase authorizations, receipts, accounts and accounting records, records of payment, transfers of funds, contracts, instructions, minutes of meetings, records of decisions authorizing work or reflecting negotiations, meetings or discussions concerning the production of advertising or purchase of media advertising, accounting books and records, including cash disbursements journals;

Advertisement scripts and recordings of media advertising for radio or television broadcast, including text displayed on television advertisements;

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4, Time schedules, details of broadcast coverage, date and time of broadcast of advertisements;

5. Records pertaining to broadcasts in electoral districts, locations or geographic areas covered by broadcast advertisements and any analysis or allocation of payments for the production or broadcast of such advertising, or information relating to the allocation of funds for advertising by electoral district;

6. Data storage media, including disk, tape, chip or other items capable of storing data, whether internal, external, attached or not attached to a computer system, containing any data pertaining to the items described in paragraphs 1 to 5 above that, either taken by itself or in relationship to other data or information, could reasonably be believed to be evidence of the commission of an offence named herein;

7. Things required to access, make intelligible, reproduce, transfer, commaokate or receive data contained in the data storage media described in paragraph 6, including:

(a) Computer system and computer components, including hardware, equipment, peripheral components and devices;

(b) Computerprograms, including operating systems, software and drivers; (c) Documentation and data, including manuals, operating instructions,

licensing and operating data, whether preserved, stored or retained on any type of support, intelligible or not, inscribed by a human or ft

computer system;

8. Data or other recorded information which may provide indicia of use, maintenance, ownership and possession that pertain to items described in paragraphs 6 and 7 above,

relating to media advertising, including broadcast air time and television or radio advertising, prepared for the 39" general election period of November 29,2005 to January 23,2006, purchased by or on behalf of or produced for:

a) The Conservative Party of Canada, b) Conservative Party of Canada candidates or their official agents, and / or c) The Conservative Fund Canada,

for greater certainty, the things to besearched for relate to media advertising prepared for the time period mentioned above, but were not necessarily purchased or produced during that time period,

HEREINAFTER referred to as the said "Things", which will afford evidence,

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PLACE

AND THAT he has reasonable grounds for believing that the things are located in the offices of the Conservative Party of Canada and the Conservative Fund Canada, 130 Albert St.. Suites 1204 and Suite 1720, Ottawa. Ontario, KIP 5G4;

OFFENCES

AND THAT there are reasonable grounds to believe the Things will afford evidence with respect to the commission of offences against the Canada Elections Act, S.C. 2000, c.9 as amended, namely the offences of:

1. T m LTIVE FUND CANADA, being the chief agen t of the Conservative - Party of Canada, a party registered pursuant to section 366 of the Canada -

Elections Act, at the City of Ottawa and elsewhere in Canada, did incur election expenses in relation to the 39"' federal general election, the period of which was November 29,2005 fanuary 23,2006, the total amount of which exceeded the

aximum amount : Ã Party of """Canada for the 39th federal general election, calculated under section 422 of the

Canada Elections Act, contrary to subsection 423(1) of the Canada Elections Act, S.C 2000, c.9 as amended;

And by so doing committed an offence under subsections W(l)(l) and 497(3)(g) of the Canada EIections Act, S.C. 2000, c.9 as amended;

2. The CONSERVATIVE PARTY OF CANADA, being a registered party whose chief agent, the Conservative Fund Canada, committed an offense by violating subsection 497(1)(I) or 497(3)(g) of the Canada Elections Act, at the City of Ottawa and elsewhere in Canada, by incurring election expenses that exceeded the election expense spending limit for the Conservative Party of Canada in the 39"' federal general election, the period of which was November 29,2005 to January 23,2006,

Committed an offence contrary to section 507 of the Canada Elections Act+ S.C. 2000, c.9 as amended;

3. The CONSERVATIVE FUND CANADA, being the chief agent of the Conservative Party of Canada, a party registered pursuant,to section 366 of the Canada Elections Act, did on or about June 6,2006, and on or about December 18,2006 at the City of Ottawa, in the Province of Ontario, file with the Chief Electoral Officer a Registered Party Return on Elections Expenses pertaining to the Conservative Party of Canada's election expenses in relation to the 3gtb federal general election, as required by section 429 of the Canada Elections Act, c.9 that it knew or ollght reasonably to have I w o n t a i n e d a materiall contrary tosubsec! 431(a) ofthe Canada ElectionsAct, S.C.2(

D amended;

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And by so doing committed an offence under subsection 497(3)(m)(ii) of the Canada Elections Act, S.C. 2000, c.9 as amended.

RELEVANT LAW

1. Attention is drawn to the following relevant sections of the Canada Elections Act:

Section 404.2(2.2) states that "A transfer of funds, other than trust funds, is permi tied and is not a contribution for the purposes of dais Act if it is.. .

a. from a registered party to a candidate endorsed by the party."

Section 407(1) defines an election expense as "cost incurred . . .by a registered party or a candidate, to the extent that the property or service for which the cost was incurred .. . is used to directly promote or oppose a registered party, its leader or a candidate during an election period.''

The foregoing sections must be considered in light of other relevant provisions of the Canada Elections Act, in particular:

Section 436 - 'The official agent of a candidate is responsible for administering the candidate's financial transactions, for his or her electoral campaign and for reporting on those transactions in accordance with the provisions of this Act"

Section 437(1) - "An official agent of a candidate shall open, for the sole purpose of the candidate's electoral campaign, a separate bank account in a Canadian financial institution as defined in section 2 of the Bank Act, or in an authorized foreign bank as defined in that section, that is not subject to the restrictions and requirements referred to in subsection 524(2) of that Act"

Section 437(3) - "AII financial transactions of the candidate in relation to an electoral campaign that involve the payment or receipt of money are to be paid from or deposited to the account, "

Section 438(4) - "No person or entity, other than the official agent of a candidate, shall pay expenses in relation to the candidate's electoral campaign except for petty expenses referred to in section 4 11 and the candidate's personal expenses."

Section 43 8(5) - "No person or entity, other than a candidate, his or her official agent or a person authorized under section 446(c) to enter into contracts, shall incur expenses in relation to the candidate's electoral campaign.*'

Section 446 - "A contract involving an expense in relation to a candidate's electoral campaign is not enforceable against the candidate unless entered into by . . . c) aperson whom

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the official agent may, in writing, have authorized to enter into the contract."

2. Similar provisions relating to the reporting of election expenses are imposed on registered parties;

Section 416(1) - "No person or entity, other than the chief agent of a registered party or one of its registered agents or a person authorized under subsection 4 1 l(1). shall pay the registered party's expenses."

Section 4 16(2} "No person or entity other than the chief agent of a registered party or one of its registered agents, shall incur the registered party's expenses."

Section 423(1) - "No chief agent of a registered party shall incur election expenses on its behalf the total amount of which is more than the maximum amount calculated under section 422."

Section 429 - " ( 1 ) For a general election, the chief agent of a registered party shall provide the Chief Electoral Officer with

(a) an election expenses return on the registered party's general election expenses in the general election that substantially is in the prescribed form.

(2) An election expenses return must set out as an election expense each of

(a) the expenses incurred by the registered party, whether paid or unpaid.. ."

The above provisions establish the salient aspects of the scheme through which Parliament has opted to control spending on election expenses. Simply put, an election expense of a candidate or a registered party must represent an expense incurred on behalf of that candidate or reeistered oartv by a person with legal authority to incur the expense.

GROUNDS FOR BELIEF

The Informant says that he has reasonable grounds to believe and does believe the matters described above, and that his grounds are based on the following:

OVERVIEW

3. 1, Ronald Lamothe, the Informant herein, am an Assistant Chief Investigator in the Office of the Commissioner of Canada Elections and a person charged by the Commissioner with duties relating to the administration and enforcement of the Cwacia Elections Act. Pursuant to subsection 5 1 1 (3) of the Ciinadu Elections Act, for the purposes

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of section 487 of the Criminal Code. I am a Public Officer as defined by section 2 of the Criminal Code. I have been investigating this matter and as such. have personal know ledge ofthe things herein deposed except where stated to be on information or belief and where so stated I believe them to be true.

The purpose of this Information to Obtain a Search Warrant is to seek judicial authorization to enter into and search the offices of the Conservative Party of Canada and the Conservative Fund Canada, both located at 130 Albert St, Suite 1204. Ottawa Ontario for the Things to be Searched For, as indicated above. This address is registered with Elections Canada as the address of both of these entities. This address is listed on the web site of the Conservative Party of Canada as its Headquarters and the Ottawa telephone book lists 130 Albert Street as the address of the Conservative Party of Canada National Headquarters. The building is a multi-storey office tower, housing various businesses, embassies and other organizations. The search will be restricted to those parts of the building occupied by or under the control of the Conservative Party of Canada or the Conservative Fund Canada. In addition to Suite 1204 mentioned above, I believe this includes Suite 1720 at 130 Albert Street, Ottawa, Ontario (paragraphs 235 - 238).

On 17 May, 2007, Political Financing, Audit and Corporate Services, Elections Canada, made a referral to the Commissioner of Canada Elections to investigate whether, during the election period of the 39Ih federal general election, the Conservative Party of Canada, a registered political party (Appendix 1 ), through its registered agent, the Conservative Fund Canada (Appendix 1 ), incurred election e- for media advertising which were claimed by a number of its candidates. This enabled those candidates to claim the expenses as their election expenses for the purposes of reporting to and claiming rebates from Elections --". -

- - - - - . - the spending limit on election expenses imposed on the Party for the 39* federal general election by the Canada Elections Act, without these expenses being claimed in its Registered Party Return on Elections Expenses;

It allowed thejapproximately 67 candidates involved to increase their report< penses with expenses they did not incur WpS^SnBHRISBB a m t e

I me75ffice of the Chief Electoral Officer from the Receiver General to which they were not entitled, election expenses spent.. up Elections Act (eligibility is contingent on the candidate receiving at least 10% of the votes in the election).

It is alleged that funds were only transferred by the Conservative Fund Canada into the accounts of selected candidates whose campaign spending appeared to be well below the election spending limit imposed on individual candidate campaigns by the Cwada Elections Act. The amounts transferred to those candidates were allocated so that the additional claims for expenses would not cause the campaigns to overspend their spending

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limits. It was anticipated that the candidates selected were expected to receive at least 10% of the vote so that the candidates could claim a 60% rebate for the additional expenses pursuant to subparagraph 4641 ){b) of the (.'anudu Elections Act (paragraph 25).

It is also alleged that funds were transferred into and out of eac h of the bank accounts of the 67 campaigns identified as having participated in the alleged scheme, entirely under the control of and at the direction of officials of the Conservative Fund Canada andor the Conservative Party of Canada. The purpose of the in and out transfers was to provide participating candidates with documentation to support their reimbursement claims for these election expenses.

It is alleged that Q t1 . f I 1

Canada and not by the candidates who claimed the media buy transactions as their own, and that the Conservative Party of Canada, therefore, was consequently obliged by the Act to report the expenses as its election expenses, rather than the expenses being claimed by the participating candidates as their own. It is acknowledged that a registered party may transfer funds to a campaign to pay election exnenses; transfers are allowed oursuant to section 404.2(2.2) of the Canada Elections Act, Jlegati

whom w

BACKGROUND

9. Based on my review of the Canada Elections Act, Elections Canada web site and my experience as an Investigator with the Office of the Commissioner of Canada Elections, I have knowledge and belief that the contents of paragraphs 10 to 25 (inclusive) are true.

10. Bill C-24, an Act to Amend the Canada Elections Act and the Income Tax Act (Political Financing) came into effect on January 1,2004, and included a number of amendments to the Canada Elections Act. Although contributions from individuals arc allowed pursuant to section 405 of the Act, the amendments occasioned a shift from private financing of election campaigns by individuals and coiporarions to public funding by payments and reimbursements to qualified political parties and candidates from the Consolidated Revenue Fund of the Government of Canada.

1 1. General documentation associated with the amended Canada Elections Act indicates that the Act is based on three principles:

a. Equity, through the imposition of election spending limits, so that no candidate or registered party can use money to overpower his or her opponent unfairly:

b. Participation, through the partial reirn bursement of election expenses incurred by candidates and registered parties from the public purse. so that money is not an overwhelming obstacle to taking an active part in Canadian public life;

c. Transparency, or the public's right to know, through the obligation to disclose spending and contributions by candidates and parties, and buttressed-by effective

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compliance measures, so that public confidence in the system's intrinsic fairness confers legitimacy on the whole enterprise.

12. The essence of Canada's election financing system is to ensure that all Canadians. regardless of financial means, have a fair and equitable chance to be heard and elected.

13. Pursuant to the Canada Elections Act, the Chief Electoral Officer is responsible for the administration of elections. referendums and other important aspects of our electoral system. The Chief Electoral Officer is assisted in carrying out this mandate by the Deputy Chief Electoral Officer, Chief Legal Counsel, the Broadcasting Arbitrator and the Commissioner of Canada Elections, who ensures that the provisions of the Canada Elec/ions Act and the Referendum Act arc complied with and enforced.

14. The role of the Broadcasting ~rbitrator is to allocate broadcasting time to registered parties, issue Broadcasting Guidelines concerning the obligations of broadcasters during a general election, and arbitrate disputes between political parties and broadcasters concerning the application of the Canada Elections Act.

15. The Canada Elections Act sets out a series of procedures in regard to the handling of campaign contributions and electoral campaign expenses to ensure transparency and facilitate the enforcement of financial controls. Election expense limits are communicated by Elections Canada to registered parties and to candidates prior to the election.

16. The election expense spending limit for a registered party is set by a formula outlined at section 422 of the Canada Elections Act. The scheme of the Act identifies the maximum amount to be spent during a given campaign by multiplying by a funding scale the number of registered electors on the preliminary or revised lists of electors in the electoral districts in which that party has endorsed a candidate, and taking into consideration an adjustment for inflation. hi the 39' federal general election of 2006, the Conservative Party of Canada's election expense spending limit was set by Elections Canada at $18,278,278.64. The, spending limit amounts for both the Conservative Party of Canada and for each electoral district were communicated to the Conservative Party of Canada by Elections Canada on December 2,2005 and confirmed on January 16,2006 (Appendix 2). These limits were also posted on Elections Canada's web site*

Under subsection 416(1) of the Act only the chief agent, a registered agent or a person authorized by a registered agent can -the expenses of a registered party. Under subsection 416(2) of the Act, only the chief agent or a registered agent can incur the expenses of a registired party.

18. The chief agent of a registered Party must submit a return to report general election expenses to the Chief Electoral Officer on behalf of the Party within 6 months after the election, as per section 429 of the Canada Elections Act.

19. Section 429 of the Canada Elections Act states that all election expenses incurred by a

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registered party, whether paid or unpaid, must be set out as an election expense in the election expenses return provided to the Chief Electoral Officer. Provided the Chief Electoral Officer is satisfied with the return filed on behalf of a registered party. and presuming the criteria for reimbursement are met, the registered party is entitled to receive 50% of it's election expenses as filed in the return (up to 50% of it's election spending limit), from the Consolidated Revenue Fund of the Government of Canada, pursuant to section 435 of the Act.

20. With respect to a candidate's election campaign, section 43 8 of the Canada Elections Act recognizes that two persons will be responsible for the financial administration of a candidate's campaign: the official agent and in some circumstances. the candidate.

21. The candidate appoints the official agent, who must meet certain eligibility criteria as imposed by section 84 of the Canada Elections Act, sad notifies Elections Canada of the person he or she has selected. Pursuant to section 438 of the Canada Elections Act, the official agent is then responsible for all financial transactions involved in the campaign. The basic principle is that all funds coming to the campaign must be deposited into the campaign bank account and that all expenses must be paid out of that account by the official agent.

22. Pursuant to subsection 43 8(4), other than petty expenses and the candidate's personal expenses, only the oficid agent my e q m s e s in relation to a candidate's electoral campign. Subsection 438(5) of the Canuuh Elections Act states that no pemn may ~ C W

an expense in relation to (be candidate's electoral campaign other than the candidate, the official agent or a person authorized in writing by the official agent to enter into a contract pursuant to subsection 446(c).

23. With a few very limited and specific exceptions, all financial transactions must be handled by the official agent, who is also responsible for preparing the Candidate's Electoral Campaign Return pursuant to section 45 1 of the Canada Elections Act. Both the candidate and the official agent must sign a solemn declaration asserting to the completeness and accuracy of the return. The return, which must be sent to Elections Canada within four months of polling day, sets out in detail all financial aspects of the c=paifP

24. The election expense spending limit for a candidate is set by a formula outlined at section 440 of the Canada Elections Act. The scheme of the Act identifies the maximum amount to be spent during a given campaign by multiplying the number of registered electors in that electoral district by a funding scale and taking into consideration an adjustment for inflation- As a result, the amount varies from electoral district to electoral district. On January 1 6,2006 every official agent was advised by a letter, sent by the Senior Director, Political Financing, Audit and Corporate Services, Elections Canada of the final elections expenses limit for their candidate. An example of such a letter is attached at Appendix 3.

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25. Election expenses submitted by a candidate are eligible for a 60% rebate. up to the maximum election expense spending limit, from the Consolidated Revenue Fund of the Government of Canada, provided the candidate receives at least 10% of the votes in that electoral district, pursuant to sections 464 and 465 of the Canada Elections Act.

GROUNDS FOR BELIEVING THAT THE OFFENCES DESCRIBED HEREIN HAVE a

BEEN COMMITTED

REFERRAL TO THE COMMISSIONER OF CANADA ELECTIONS

ALLEGATIONS CONTAINED IN THE REFERRAL

26. The writ commencing the election period for the 3gfh federal general election became effective on November 29, 2005 and the general election day was Januaiy 23, 2006. Attached at Appendix 4 is a copy of a memorandum from the Chief Electoral Officer to all Returning Officers and Field Liaison Officers, providing the date for the writ of election (November 29,2005) and fee election date of January 23,2006.

27. Following a general election, a "Registered Party Return on Elections Expenses" and a "Candidate's Electoral Campaign Return" forms are received at Elections Canada by the Political Financing and Audit Directorate, which is responsible to review and audit the returns. The information provided by a registered party must conform to the requirements of section 429 of the Canada Elections Act and a candidate's return information must conform to the requirements of section 45 1 of the Cam& Elections Act. .

28. On April 1 1,2007, a written referral (hereinafter called the Referral) signed on April 5, 2007 by Ms. Janice Vkzina, Senior Director, Political Financing, Audit and Corporate Services, and Ms. Manon Hamel, Acting Director Political Financing and Audit, was received by the Commissioner of Canada Elections. The referral sets out that during the election period of the 39* federal general election, the Conservative Party of Canada, a registered political party (Appendix 11, undertook with its chief agent, the Conservative Fund Canada, a planned course of action to incur and pay election expenses with respect to election advertising broadcast time, but through a series of transactions created the appearance that, for the required reporting to Elections Canada, some of the expenses were incurred by various candidates. The Conservative Party of Canada incurred the expense by entering into an agreement with Retail Media, a company it engaged to purchase broadcast time.

29. It was alleged in the Referral that the Conservative Party of Canada transferred funds from its chief agent, the Conservative Fund Canada (Appendix I) , into the accounts of approximately 67 Conservative Party of Canada candidates, and then almost immediately transferred the funds back to the Conservative Fund Canada account as payment for the invoiced advertising expense. The Conservative Fund Canada provided an invoice to each participating candidate for a share of the advertising expense, and in the case of Quebec

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candidates, for production costs as well, which were then claimed by the candidate as an election expense in the Candidate's Electoral Campaign Return,

3 0. The Referral alleged -

a- The Conservative Party of Canada entered into an agreement with Retail Media to purchase blocks of advertising air time. Payment to Retail Media was provided by both the Conservative Party of Canada and the Conservative Fund Canada prior to any advertising being broadcast on the air. Documentation filed with Elections Canada shows that officialsof the Conservative Party of Canada discussed participation in the transactions with a number of candidates or other campaign officials, advised them that there would be no cost to the'campaign and indicated that the candidate would be able to recover a 60% rebate from Elections Canada of the funds transferred.

b. The Conservative Fund Canada then transferred funds to the bank accounts of participating candidate. Officials of the Conservative Fund Canada did not allow this transfer to sur, however ffic ial agent I icipating candidate mpleted forwarded to tl 3nservative Fund

ferdocumentensuredthatthe same, or approximately the same, amount as the proposed transfer to the

. campaign would be transferred back to the Conservative Fund Canada. This - -

action gave the Coo,wative Fund Canada control over the money that would be transferred into and back out of the participating campaign bank accounts.

c. The Conservative Fund Canada issued an invoice to the participating campaigns for a portion of the total advertising cost. The Conservative Fund Canada then used the previously supplied bank wire transfer document to immediately return the funds to the Conservative Fund Canada bank account in Ottawa. The transfer of funds to, and the withdrawal of similar amounts from, participating campaign bank accounts was entirety under the control and direction of the Conservative Fund Canada,

The participating candidates then claimed the advertising expense as an election expense in their electoral campaign returns, for the purposes of reporting to Elections Canada and receiving reimbursement of election expenses from the Receiver General. The invoice provided by the Conservative Fund Canada was used to support the claim.

REVIEW OF MATERIALS PROVIDED WITH THE REFERRAL

32. The Commissioner of Canada Elections reviewed the Referral document and determined that an investigation was warranted. I, along with Assistant Chief Investigator S. Neville was directed to initiate the investigation on behalf of the Commissioner of Canada Elections. The processofthe investigation includedareviewoftherelevant documentation

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provided with the Referral by Political Financing and Audit (paragraphs 32 - 461, review of additional documentation provided by Elections Canada (paragraphs 5 1 - 62). documents obtained by way of a Production Order executed on Retail Media (paragraphs 167 - 222) and interviews with persons of interest to the investigation (paragraphs 63 - 166).

33. Included in the Referral is the explanation as to how and why Elections Canada became aware of the alleged media buy scheme. In late October 2006, Mr. Rani Naoufal, an auditor employed at the Political Financing and Audit Directorate of Elections Canada, discussed with Mr. Denny Pagtatchan, official agent of Mrs. Elizabeth Pagtakhan, Conservative Party of Canada candidate in the electoral district of Vancouver East (British Columbia), an election expense filed with Elections Canada by the candidate. The discussion concerned an invoice dated January 4,2006 in the amount of $29,999.70 (Appendix 5), which had been issued to the Pagtakhan campaign by the Conservative Fund Canada relating to a media buy.

Mr. Pagtakhan stated to Mr. Naoufal, 'Ythinkwe contributed to TVnational advertising. There was no way we can spend our limit so we were asked by the Party if we can help

contribute."

Upon being advised of this discussion by Mr. Naoufd, Ms. Manon Hamel, Acting Director of Political Financing and Audit Directorate, undertook a further review of Conservative Party of Canada candidate returns filed with Elections Canada with respect to the 39* federal genera! election. Her review identified 67 returns filed by Conservative Party of Canada candidates in which she noted amounts transferred into the candidate's account by the Conservative Fund Canada, which closely equated to election expenses claimed by the candidates for media buys, and in which similar amounts were almost immediately transferred back to the Conservative Fund Canada. Ms. Hamel noted that amounts of the transfers to the 67 various candidates' bank accounts ranged from just over ,

$57 00 wen added tmz&er. h e election expenses chimed by candidates in relation to the media buy toti 7 5,45 1 -9 1 (A~pendix 6). 60% of that figure amounts to slightly more tha ! 5 , 0 in pokntid rebates to be paid by the Consolidated Revenue Fund of Canad to candidates of the Conservative Party of Canada claiming for media buy expenses in relation to this alleged scheme. A spreadsheet prepared by Ms. Suzanne Evans, Political Finance and Audit Directorate, Elections Canada, is attached to provide an overview of the amounts (Appendix 6).

36. Not all candidates who claimed rebates were eligible for reimbursement of media buy expenses because not all participating candidates received the required 10% or more of votes in their electoral districts as required by subsection 464(1 )(b) of the Canada Elections Act. Of the 67 campaigns identified as having participated in the alleged scheme, 2 candidates (Sam Goldstein and Kren Clausen) received less than 10% of the vote, making them ineligible for any rebate. The rebate amounts which could have been claimed by those candidates in relation to the media buy expenses totals $79,999.8 1 . Exclusion of these candidates reduces the total election expenses claimed for ""bate amount to approximately c lainkg 65 mpaigns (paragraph 3 5

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37. As a result ofher review, Ms. Hamel identified 14 of these 67 campaigns (6 in Quebec and 8 outside Quebec) on which Elections Canada had not yet completed the audit process, and accordingly the candidates had not yet been reimbursed for their election expense claims. On November 29.2006. letters signed by the Chief Electoral Officer were sent to 1 1 of these candidates pursuant to subsection 45 I(2.2) of the Canada Elections Act asking for supporting documents for the claimed media buy expenses. On January 12,2007 an additional 3 letters were sent to the remaining candidates also seeking additional supporting documentation for the media buy expense they had claimed. (Appendix 7). The candidates were asked to provide:

a. A copy of the contract or other written agreement with the advertiser and with the registered party relating to the expense; .

b. A copy of the advertising or script; c. Documentation of the date(s) of the advertising promoting the candidate; d. Documentation of the date on which the official agent approved the expenditure.

38- Each of the 14 candidates provided a similarly formatted response on Conservative Party of Canada letterhead. Eleven of the 14 packages received by Elections Canada were dated December 2006, and contained (Appendix 8):

a. A copy of a letter dated December 15,2006, to Ms. Manon Hamel from Ms. Ann 0 ' Grady, Chief Financial Officer of the Conservative Fund Canada;

b. Radio and television time schedules; c. ~lectord District allocations of broadcast time for Conservative Party of Canada

Candidates as provided by Retail Media; d. An invoice from the Conservative Fund Canada; em An invoice from Retail Media; and f. A copy of a bank wire transfer,

The remaining 3 packages received by Elections Canada, dated January 2007, contained the same 6 documents mentioned above and 1 additional document which is a letter, dated Januaiy 15, 2007, from Mr. Andrew Kumpf of Retail Media, to Ms. Manon Hamel, in which Mr. Kumpf explains the relationship between Retail Media and the Conservative Party of Canada (Appendix 8).

40. I note that in addition to the 14 packages of documents received from candidates from whom additional information was requested, an unsolicited package dated December 2006 and containing the same documents as indicated for the packages received by Elections Canada dated December 2006 above (paragraph 38), was received from Mr. Robert A. Campbell, the Conservative Party of Canada candidate for the electoral district of Dartmouth - Cole Harbour (Appendix 8). Mr. Campbell was identified in a letter dated January 1 5,2007 from Mr. Michael Donison. (then) Executive Director ofthe Conservative Party of Canada, to Ms. Hamel (paragraph 48 and Appendix 10) as having participated in

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the media buy transactions. He is one of the 67 candidates identified as having participated in the media buy transactions (paragraph 35) but was not one of the 14 from whom add; tional documentation was requested. The total number of packages of additional support documents received by Elections Canada. therefore, Is 15.

41. Ihaveexaminedthepackagesofdocumentssubmittedbythe15candidatesinresponse to the Chief Electoral Officer's request for additional information. Of these 15 candidates, 9 were located outside Quebec while 6 were located in Quebec (Appendix 8). Each package contains an invoice bearing the letterhead of Retail Media, which was provided to each candidate by the Conservative Party of Canada or the Conservative Fund Canada (paragraph 45). As notedat paragraphs 37 and 38, each of the 15 packages also contained an invoice issued to the particular candidate by the Conservative Fund Canada. The Conservative Fund Canada invoice is in the same amount as the invoice bearing the Retail Media letterhead (Appendix 8).

42. I note that each of the invoices bearing Retail Media letterhead filed by the 9 candidates outside Quebec bears the same invoice number, being 1101868-1, and I note that each contains a typographical error in that the word "Invoice" is spelled "nvoice". The invoices each bear the handwritten notation "+ GST' and a handwritten total amount. The actual amount of GST is not indicated, nor is a GST registration number indicated. (Appendix 8).

43. I note further that each of the invoices bearing Retail Media letterhead filed by the 6 candidates in Quebec also bears the same typographical error, i.e. "Invoice" is spelled "nvoice", but each invoice bears a different invoice number. The subtotal, GST (amount and registration number) as well as the Quebec tax (amount and registration number) are type written on the page, as is the total amount payable. The format of the invoices bearing Retail Media letterhead provided by the candidates in Quebec differs considerably from the Retail Media invoices provided by the candidates outside Quebec. (Appendix 8).

44. Upon review of the documentation submitted by the 15 candidates, the Chief Electoral Officer was not satisfied that the additional supporting documentation evidenced that the expenses claimed had been incurred by the candidates, and on that basis excluded these expenses for the purpose of calculating the appropriate reimbursement to these candidates pursuant to section 465 of the Canada Elections Act. (Appendix 8).

45. I have reviewed the documents filed with Elections Canada by the 67 campaigns identified (paragraph 37). I note that the only campaigns which filed copies of an invoice bearing the letterhead of Retail Media, were the 15 (previously identified at Appendix 8 and paragraphs 37 - 44) from which additional supporting documentation was requested by the Chief Electoral Officer (Appendix 7). All of the invoices bearing Retail Media letterhead appear to have been received by the 15 candidates via the Conservative Party of Canada. since each ofthe 15 invoices was addressed to "The Official Agents for Conservative Party Candidates, #I720 - 130 Albert St., Ottawa". I know this to have been the address registered with Elections Canada by the Conservative Party of Canada until 2007 (paragraphs 235- 238).

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46. I note that in the 15 packages of additional information received by the Chief Electoral Officer (paragraphs 37 - 46). for the candidates in Quebec only. the names of specific candidates are included on the invoices bearing Retail Media letterhead. These invoices bearing Retail Media letterhead were each addressed to "The Official Agents for Conservative Party Candidates" and addressed to -#I720 - 130 Albert Street, Ottawa, Ontario. K1 P 5G4" (Appendix 8). The names of specific candidates or official agents are absent from the Retail Media invoices directed to non-Quebec candidates: they are identified by electoral district only (Appendix 8). Mr. Andrew Kumpf of Retail Media stated (paragraph 67) that Retail Media did not deal with any of the candidates. Ms. Marilyn Dixon stated that Retail Media did not generate invoices to candidates or electoral districts (paragraph 72). Further, when shown one invoice (Appendix 23) bearing Retail Media letterhead (# 1 1 0 1 868-1, dated January 1, 2006) filed by the candidate in the Electoral District of York South - Weston (one of the 15 candidates from whom additional information was requested at paragraphs 37 - 461, Ms. Dixon stated that the invoice must have been altered or created because it did not appear to conform to the appearance of the invoices sent by Retail Media to the Conservative Party of Canada (paragraph 75 and Appendix 19) with respect to the purchase of media airtime during the 39* federal general election.

CONSERVATIVE PARTY OF CANADA COMMENTS ON MEDIA BUY

47. Subsequent to the November 29, 2006 letters from the Chief Electoral Officer (paragraph 37 and Appendix 7), representations were received from the Conservative Party of Canada with respect to the media buy and the requests which had been made to each of the 14 candidates for additional supporting documentation.

48. hi a letter (Appendix 10) dated January IS, 2007 to Ms. Manon Hamel, Acting Director, Political Financing and Audit Directorate at Elections Canada, (then) Executive Director of the Conservative Party of Canada, Mr. Michael Donison states:

"...there is no single contractual document between the registered party or the candidates and the supplier that speaks to the arrangements of the regional media buy. "

Later in the same letter he indicates:

" ... the bank wire instructions provided by the official agent to the registeredparty approving payment of the Conservative Fund Canada invoice to the official agent for the media buy, both of which have been providedto EC as part of the response puckage. .speaks to the approval ofthe media buy services received and is indicntiw of an agreement by the official agent for the provision of these regional media buys. "

49. . In a letter (Appendix 1 1 ) dated January 25,2006 to Ms. Manon Hamel, Acting Director,

Page 16 /


Political Financing and Audit Directorate at Elections Canada,Ms, Ann O'Grady. Chief Financial Officer of the Conservative Fund Canada writes:

"Costs were calculated by Retail Media by individual campaigns based on the advertising performed and invoiced to {he Conservative Candidates at the Conservative Party national q #ice,"

"As is the practice in media buys during an election where time is of the essence. those buys must be paid for in advance. Given the number of candidate campaigns that participated in the candidate media buy programs and the timeliness ofpayment required in order to book the purchase of radio and TV time, the Conservative Fund facilitated the process by rendering payment to Retail Media as intermediary and subsequently charged each ofthe campaign (sic) for their respective media buy and the dissociated allocation ofproduction costs. These are the invoices that Elections Canada is beingpresented by the candidates' official agents to support their media buy during the writ. "

50. En a letter (Appendix 12) to the Chief Electoral Officer, dated April 12,2007, (current) Interim Executive Director of the Conservative Party ofCanada, Ms. Susan J. Kehoe stated:

'When candidates were invited to participate in the concept of a regional media buy each of their campaigns generally indicated a level of financial participutbn that !hey would mdeI**take. These commitment levels were then provided to the media buy supplier to determine the group market area and what combination of TV and radio in what markets war best to target the region in which each participating candidate 's audience laid. "

REVIEW OF RECORDS PROVIDED BY ELECTIONS CANADA

5 1. As part of the ongoing investigative process I obtained additional documentation (which was not appended to the Referral from Elections Canada (paragraphs 26 - 50) from Ms. Suzanne Evans, Audit Manager at Elections Canada, In addition to the documents mentioned here, I have also reviewed electoral campaign returns and other related documents filed by candidates and / or official agents with Elections Canada.

52. I have examined the Candidate's Electoral Campaign Return fonns pertaining to the 67 campaigns identified by Ms. Hamel. I note that the amounts claimed by the candidates on the basis of invoices provided to them by the Conservative Fund Canada closely corresponded to equivalent transfers of money from the Conservative Fund Canada to the campaigns. In most cases there is a close correlation between the claimed election expenses and corresponding transfers by the Conservative Fund Canada that were provided to pay the invoice. In numerous campaigns, the amount transferred to the campaign bank account by the Conservative Fund Canada corresponds exactly with the expense claimed by that campaign. In a number of other campaigns, the difference between those two amounts is $10 or less while in other cases the difference represents the cost of transferring the funds

Page 17


by bank wire transfer back to the Conservative Fund Canada. These figures for the 67 candidates are attached as a spreadsheet. prepared by Ms. Suzanne Evans, Audit Manager, Elections Canada (Appendix 6) .

53. I note further that Ms. O'Gdy mentioned in her letter of January 25,2006 (paragraph 49 and Appendix 11) that the Conservative Fund Canada charged each participating candidate 'for their respective media buy and the associated allocation of production costs. " In my review of the Candidate Electoral Campaign Return forms pertaining to the 67 campaigns identified by Ms. Hamel, each campaign received an invoice from the Conservative Fund Canada. It was only the participating Quebec campaigns, however, which filed invoices or documentation with Elections Canada pertaining to campaigns for which production costs were allocated. No such allocation has been filed by the participating campaigns outside Quebec, each of which received a media buy invoice from the Conservative Fund Canada (Appendices 8,19 and paragraphs 93, 1 36, 1 42, 1 46,148, 224,225,227).

54. I have reviewed the Registered Party Return in Respect of General Election Expenses, filed with Elections Canada by the Conservative Fund Canada as chief agent of the Conservative Party of Canada (Appendix 13) submitted pursuant to the 39* federal general election. I note that the statutory election expense spending limit of the Conservative Party of Canada for the 39* federal general election was $18,278,278.64, The Conservative Party of Canada reported having spent $18,019,179.28, leaving it $259,099.36 short of its maximum permitted election expenses spending limit. In its original Registered Party Return, the Conservative Fund Canada declares that the Conservative Party of Canada spent $9,174,393.60 on radio and television advertising during the 3 9Â¡ federal general election.

In an amended Registered Party Return (Appendix 13), signed on December 4,2006 the Conservative Fund Canada declares that the Conservative Party of Canada spent $8,786,108.38 on radio and television advertising and $388,284.22 on Advertising - Other, these two categories total $9,174,3 93 -60. The specifics of election expenses pertaining to a registered party are not required by law to be filed with Elections Canada and accordingly I have no knowledge of these particulars of the Conservative Party of Canada with respect to the 39"' federal general election.

The matter was referred to the Commissioner of Canada Elections to establish whether there had been compliance with sections 423(1), 43 1 and 463 of the Canada Elections Act, specifically whether the expenses claimed as election expenses in relation to the media buy were acceptable as election expenses that were incurred by the candidates and were eligible for reimbursement in accordance with section 465 of the Canada Elections Act or whet her they were expenses incurred by the Conservative Party- of Canada and the Party had consequently exceeded its spending limit for election expenses.

Page 18


MEDIA BUY TRANSACTIONS AS DESCRIBED IN DOCUMENTS PROVIDED BY

ELECTIONS CANADA

The documents mentioned in paragraphs 58 - 62 were filed with Elections Canada by various candidates with their Candidate's Electoral Campaign Return. As explained below (paragraphs 58 - 621, within a short period of time, typically the same day, funds were transferred from the Conservative Fund Canada to the accounts of the participating candidates and then transferred back to the Conservative Fund Canada by pre-authorized bank wire transfer instructions signed by the official agent of the candidate prior to the initial transfer to the candidate. Deposits into the accounts and the corresponding transfers back to the Conservative Fund Canada were directed by and under the control and direction of the Conservative Fund Canada. These payments are described as "in-and-out payments".

58. - n-and-ou xl in an email dated December 20,2005 sent by Mr. iwichael D z e n E!xecutive ~irector of the Conservative Party of Canada. The email asks Mr. Byng Giraud, Coniervative Party of Canada National Councillor for British Columbia, to advise concerned official agents of the steps in accordance with which . transfers would be made to pay for the media buy invoice. The invoice was provided to the participating candidates by the Conservative Fund Canada. The e-mail (Appendix 14) concludes by saying:

"...no monies will be transferred from the Fund to the Candidate to pay for this invoice until the Fund has received a signed and completed bank wire instruction form from the official agent. "

59. An mail (Appendix 15), which appears to be dated January 4,2006, &om Mr. Bri'm Hudson, Conservative Party of Canada National Councillor, Newfoundland and Labrador, forwards instructions dated December 30, 2005- from Ms. Susan Kehoe, (then) Chief Financial Officer of the Conservative Par ty of Canada, concerning the steps by which monies would be deposited to the participating campaign accounts. The gist of these communications is that candidates participating would pay the Conservative Fund with monies almost contemporaneously provided by the Conservative Fund Canada for that purpose. Payment would be based on the invoice issued by the Conservative Fund Canada.

60. In her forwarded e-mail (part of Appendix 1 51, Ms. Kehoe states:

'It would appear that apoint of question coming forth from the official agents ...is how do they treest the monies being fonvarded to them hy the National Party on their books.

It is to be recorded as a Transfer/rom the Registered Party and will be recorded on Part 2Hof the Candidate 's Electoral Campaign Return in the Statement of Transfers Received ...in column I "Monetary" under Registered P t q , "

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She goes on to state:

"The pwd invoices wi// he recorded in Part 3A, the Statement of Electoral Campaign Evpmes ... under ... Column 1 "Advertising - Rad'wTV9'. "

In his e-rnail noted in Appendix 15, Mr. Hudson states:

'"Having gone through all the documents now, I have realized this is a transfer in and then backout, same day. You will still be able to use the 60% you will get back from this amount afterfiling election expenses in whatever way your team desires {pay off election debt or use /o~t~ards credit), "

"The imwice will for each candidate will be in the amount as indicated in my preceding e-mail. The transfer will be in the same amount. Therefore, as agreed there will be not net cost or cash flow impact. The paid invoice can be included in paid election expenses subject to the 60% rebate that the candidate gets to keep [sic 1."

A Toronto based company, Retail Media, was retained by the Conservative Party of Canada or the conservative Fund Canada to act as the agent topurchase broadcast time for radio and television advertising during the 39* federal general election. On January 15, 2007 Mr. Andrew Kumpf, Vice President of Retail Media, wrote (Appendix 16) to Ms. Manon Hamel, Acting Director, Political ~inance and ~ u d i t at Elections Canada. The letter was forwarded to Ms. Hamel by Mr. Donison, (then) Executive Director of the Conservative Party of Canada. The letter described the role of Retail Media as the:

"suppliedagency of record for the media buys made by the Conservative Party of Canada and the official agents forpartiCTpating Conservative candidates in the 39th Federal Election that took place in November 2905 and January 2006 and that we- mufua2ty entered into an agreement to provide media buys."

He also indicated in his letter:

...appropriate invoices reflecting goods and services rendered were separately issued to participating Conservative Candidates and to the registeredparty based on the 4 segments identified"

INTERVIEWS

INTERVIEW OF SENIOR OFFICERS OF RETAIL MEDIA

63. On October 15,2007 Assistant Chief Investigator S. Neville and I met with Mr. Andrew Kumpf, Vice President of Broadcast Operations, Retail Media, Ms. Marilyn Dixon, Chief Operating Officer of Retail Media and Mediacorn, Mr. David Campbell, President and CEO

Page 20


of GroupM Canada (a company I was told by Mr. Campbell is related to Retail Media and Mediacorn) and their legal counsel, Mr. Malcolm N. Ruby. Paragraphs 63 - 80 relate to that meeting.

64. I am aware that the Broadcasting Guidelines for the 39"' federal general election (Appendix 17) as issued by the Broadcasting Arbitrator (paragraph 14), lists Mr. Andrew Kumpf of Retail Media as the Authorized Agent for the purchase of broadcasting time for the Conservative Party of Canada. Mr. KumpFs address is listed as 1 50 Blow Street West. Suite 705, Toronto, Ontario, M5S 2x9. Mr. Kumpf confirmed that this is the address of Retail Media. On December 12,2007 1 was advised through counsel to Retail Media that RMI Retail Media is a division of The Media Company/MBS, an Ontario General Partnership of Grey Advertising ULC and Media Buying Services ULC.

65. Mr. Kumpf advised me that Retail Media is not a news gathering agency, nor does it report news and it is not a creative agency, i.e. it does not create or produce the advertising itself. Retail Media is icompany engaged in purchasing broadcast advertising time on behalf of its clients.

66. I was advised by Mr. Kumpf that no formal contract existed between Retail Media and the Conservative Party of Canada. He said that each time the purchase of air time was required by the Conservative Party of Canada, a verbal agreement between these parties was followed up with a purchase authorization to obtain media advertising. Mr. Campbell stated that Retail Media required payment in full from the Conservative Party of Canada / Conservative Fund Canada, in advance of purchasing advertising air time.

Mr. Kumpf advised me that no contracts between Retail Media and participating '

candidates or official agents were entered into. He also stated that the agreement for the . purchase of broadcast air time was between Retail Media - - and the Conservative Party of Canada on an ad hoc basis.

-

During the October 15, 2007 meeting, Mr. Kumpf stated that Retail Media typically dealt with the following persons at the Conservative Party of Canada to make such agreements:

-Mr. Patrick Muttart, Strategic Planner for the Conservative Party of Canada -Mr. Mike Donison, (then) Executive Director of the Conservative Party of Canada, and -Ms. Susan Kehoe, (then) Chief Financial Officer, Conservative Party of Canada

During the October 15,2007 meeting with Mr. Kumpf, et al, Mr. Kumpf stated that Retail Media provided the Comenative Party of Canada with 4 invoices for services relating to the purchase of advertising air time during the 39th federal general election. I was not provided with copies of these invoices. Mr. Kumpf said these invoices were issued in 4 segments identified as:

Page 2 1


1) Media Buy - Rest of Canada (excluding Quebec) - Registered Party 2) Media Buy - Participating Candidates 3) Media Buy - Quebec- Registered Party, and 4) Media Buy - Quebec - Participating Candidates.

70. Mr. Kumpf indicated that although Retail Media issued the four invoices noted above to the Conservative Party of Canada with respect to the advertising air time purchased by Retail Media on behalf of the Conservative Party of Canada, only two of the invoices pertain to the media buy transactions identified by Ms. Hamel of Elections Canada:

2) Media Buy - Participating Candidates, and 4) Media Buy - Quebec - Participating Candidates.

7 1. Mr. Kumpf and Ms. Dixon stated that the four invoices totalled j ust under $9,000,000. Ms. Dixon stated that the four invoices, noted above, were generated on January 1,2006 and provided to the Conservative Party of Canada. None of these invoices has been filed with Elections Canada by The Conservative Party of Canada or the Conservative Fund Canada because registered parties are not required by law to file supporting documentation to justify the election expenses claimed in their Returns.

72. Mr. Kumpf stated that Retail Media had no contact whatsoever with individual candidates, the candidates' Official Agents or their campaign teams. Mr. Kumpf stated that information relating to the participating candidates and recorded in the invoices by Retail Media came to Retail Media directly from Ms. Kehoe.

Ms. Dixon stated as well that the amounts to be allocated to each electoral district / candidate on the invoices were provided to Retail Media by Ms. Kehoe. These statements are in contradiction to Ms. WGmdy's ktter of January 25, 2007 (paragraph 49 and Appendix II) in which she states that the amounts to be allocated were determined by Retail Media. I believe that target amounts were provided to Retail Media by the Conservative Party of Canada or the Conservative Fund Canada and that actual allocations for candidate campaigns were carried out by Retail Media (paragraph 170 - 222).

74. I note that the documentation filed with Elections Canada by the 14 candidates (plus the unsolicited 15* candidate) (Appendix 8 and paraeraphs 37 - 46) from whom additional supporting documentation was requested, includes a breakdown of the number of times an advertisement ran in various geographic regions. I note as well a number of instances in which the number of ads held out as benefiting candidates in contiguous electoral districts or the same geographic region is exactly the same, yet the amounts allocated to each candidate as the value of the benefit vary considerably. I note that the amounts allocated fit within the difference between the amounts spent by a given candidate and the allowable ' election spending limit for that candidate (paragraph 106,113). The advertising data filed with Elections Canada was aggregated and charted by Ms. Manon Hamel of Political Financing and Audit and is attached (Appendix 18).

Page 22


75. As an example of the invoices filed with Elections Canada, I showed the representatives of Retail Media an invoice in the amount of $39,999.91 (Appendix 23) filed by the candidate for the electoral district of York South-Weston, who was one of the 14 candidates (paragraph 3 7) contacted by Elections Canada for additional information subsequent to the filing of Candidate's Electoral Campaign Return following the 39" federal general election. Upon viewing the document, which bears the letterhead of Retail Media. Ms. Dixon

meone ;cause !tail M a to th bnservati

76. I note that during the meeting with the representatives of Retail Media, none of the executives contradicted or corrected any of the statements made by the other executives present

77. Mr. Ruby, legal counsel for Retail Media, advised Elections Canada investigators that Retail Media would deliver the relevant documents in the possession of Retail Media in response to a Production Order. Mr. Kumpf indicated to me that he would be prepared to deliver the relevant documentation to Elections Canada investigators at the place of business of Retail Media, or at another mutually agreeable place to be arranged, within a period of 30 days from the day of service of a Production Order.

As indicated at paragraph 167, subsequent to the October 15, 2007 meeting with officials of Retail Media 1 served a Production Order on Retail Media and received documentation. This documentation is discussed in paragraphs 80, 156,167 - 222.

79. Appendix 23 is an invoice # 1 1 01 868- 1, dated January 1,2006 filed with the Chief Electoral Officer by the candidate for the Electoral District of York South - Weston (one of the 14 candidates from whom the Chief Electoral Officer sought additional infomion (Appendix 7)). The invoice appears to be a version of the invoice received via a Production Order served on Retail Media (paragraphs 167, 168) at Appendix 20, however the only itemized data showing in the invoice at Appendix 23, which I showed to the officials of Retail Media, is the amount invoiced to the Electoral District of York South- Weston. The other 40 Electoral Districts which appear on the invoice at Appendix 20 have been blocked out Handwritten onto the invoice at Appendix 23 (I do not know by whom) are. the words WST = 39.999.9 1 ."

80. Among the documents I received pursuant to the execution of the Production Order. I note that an invoice #1101868-1, also dated January 1.2006 in the amount of $39.999.91 (including GST), pertaining to the Electoral District of York South- Weston was included (Appendix 19). I do not know why the invoice at Appendix 19 was not filed by the candidate with the Chief Electoral Officer instead of the hand-written amount indicated in the invoice which was filed (Appendix 23 and also part of Appendix 8).

INTERVIEWS OF PARTICIPATING CANDIDATES and OFFICIAL AGENTS

Page 23 -


81. Investip9rs of the Office of thr '"'--mirr-ner of Canada Electior were able to

-m V t t W a of the 67 candidates agents, and ciwumned a teleph~.,~ intervLn mlh an official ageni id orzv .he 67 candidates, as indicated below. In addition, one structured interview was conducted with an Elections C d a auditor. The 14 structured interviews conducted do not cornspond 10 the 14 candidates from whom additional information was sought by the Chief Electoral Officer (described above at paragraphs 37 - 46).

82. In addition, to the interviews actually conducted and set out below, during the period July 1,2007 to September 30,2007,1 am aware that attempts were made by investigators of the Office of the Cornmi; mei nad lect- ' additional .. ,

these 1 fi attern] interviewed and-sKtZTfo investigators tl ' have6een vised by counsel to the Conservati Party of Canada that they should not

, . <

Elections Canada investigators without the involvement of counsel to the ;ervanve Party of Canac' ' tany potential interviewees cited civil litigation

commenced by two official agents agaiast the Chief Electoral Officer as the reason for declining to be interviewed. The Commissioner of Canada Elections is not a party to this litigation.

83. In addition to the 16 who declined to be interviewed, one Official Agent refused to meet . with Elections Canada investigators and one candidate did not return calls. This comprises

the 1 8 mentioned in paragraph 82.

84. The following candidates and/or official agents were part of the 67 campaigns identified by Elections Canada in the referral as having participated in the media buy from their electoral campaign returns. They were contacted by investigators of the Office of the Commissioner of Canada Elections and agreed to be interviewed:

85. On July 2, 2007, Assistant Chief Investigator R Pruneau interviewed and obtained separate statements from Mr. Jean LanAy, the Conservative Party of Canada candidate in the 3 9th federal general election of January 23,2006, in the electoral district of Richmond- Arthabask (Quebec) and his official agent, Ms. Lise Vallieres. Both Mr. Landry and Ms. Vallieres stated that they were not familiar with Retail Media.

When asked about his involvement in the media buy transaction, Mr. Landry stated that he travelled to Montreal with his official agent in ~ecember 2005 and spoke with a Conservative Party of Canada Quebec organizer, Mr. Piene Coulombe. The purpose of this visit was to obtain election posters.

87. Mr. Landry stated that he was told by Mr. Coulombe that $30,000 would be deposited in Mr. Landry's campaign account. He was not to spend this money but Mr. Coulombe told him that he could count on an $18,000 return on it because Elections Canada would provide him with a reimbursement of 60% of the $30,000 ($18,000) when the $30.000 wasclaimed

Page 24


as an election expense.

88. Mr. Landry said that Mr. Rivard, another Conservative Party of Canada organizer for the Province of Quebec, provided verbal instructions to Mr. Landry on how this infusion of funds should be reported in the Candidate's Electoral Campaign Return. Mr. Landry's campaign was provided with an invoice of $26,039.15 by the Conservative Fund Canada for election advertising under the *media buy' initiative. Mr. Landry stated that the difference between the $30,000 deposited in the campaign account and the $26,039.15 withdrawal from this same account, approximately $4,000, was to cover the cost of posters, which was the reason for meeting with Mr. Coulombe.

89. Ms. Vallieres told Assistant Chief Investigator Pruneau that she provided the Conservative Fund Canada with the necessary banking information and signed the wire bank transfer instruction authorization for the withdrawal of fimds from the official agent's bank account to pay for the 'media buy' invoice. She also stated that on or about January 6, 2006, $30,009.15 was deposited from the Conservative Fund Canada to the campaign account. ShestatedthatonoraboutJanuary 12,2006,theamountof$26,039.15(which included a bank administrative fee of $90) was withdrawn from the account by the Conservative Fund Canada via the pre-signed wire transfer document.

90. Ms. Vallieres stated that she did not enter into a contract with any media company for - this media buy advertising nor did she provide written authorization to anyone else to incur costs on behalf of the campaign.

91. I have examined the Candidate's Electoral Campaign Return filed by Mr. Landry and Ms. Vallieres as provided by Elections Canada and find that, subject to the qualifier in paragraph 92, the information in the return aligns with the information provided in their respective statements.

Mr. Landry was one of the 14 candidates from whom additional supporting information was sought from the Chief Electoral Officer (paragraph 37). Of tbose 14, he is one of the 6- candidates from Quebec from whom additional information was sought (paragraph 37). I note that the package submitted to the Chief Electoral Officer by Mr. Landry includes an invoice issued on January 1,2006 by Retail Media, for "January 2006 media expenditure" (radio) costing $9364.94, plus GST ($648.55) and provincial tax (743.5 1 ), for a total of $10,657. Also part of the package submitted by Mr. Landry is an invoice issued on 1/3/2006 (I presume this to be January 3,2006) by the Conservative Fund Canada indicating that the candidate's "share of media buy costs" was $2 1,240.5 7. The Conservative Fund Canada invoice also indicates the candidate's "share of advertising productionw cost was $4,798.58, for a total invoice cost of $26,039.15 (no taxes are indicated in this invoice) (Appendix 48). I am not aware of the reason for the difference between the amount of the Retail Media invoice and the invoice from the Conservative Fund Canada.

93. I was advised by Mr. Kumpf of Retail Media that Retail Media does not create or produce advertising (paragraph 651, therefore the item pertaining to production costs noted


in the Conservative Fund Canada invoice (paragraphs 49,53, 136, 146, 148,224) must relate to a separate contract for production. No such contract has been filed with Elections Canada by the candidate; I have no knowledge of the nature of the production costs charged to Mr. Landry by the Conservative Fund Canada.

Page 26


94. On July 4, 2007, Assistant Chief investigator P. Pottier interviewed and obtained statements from Mr. T. DeSouza, the Conservative Party of Canada candidate in the electoral district of Esquimalt-Juan de Fuca (British Columbia) and his official agent, Mr. A. Creech. These individuals were interviewed in the presence of each other, with Mr. Creech being interviewed first.

95. Mr. Creech stated that the Campaign Manager, Mr. Geoff Donald, advised him in December 2005, that the campaign would participate in a 'National Media Buy' and that the Conservative Party of Canada would transfer funds to finance the purchase of the advertisements. Mr. Creech stated that he did not know of 'media buy' and the arrangements were made through Mr. Donald..

96. Mr. Creech, as official agent, said he received instruction in the form of an email from Mr. Donison (then Executive Director of the Conservative Party of Canada) addressed to Mr. Byng Giraud, Conservative Party of Canada National ~ o k i l l o r for British Columbia, dated December 20,2005 (Appendix 14) advising of the steps to be taken for the transfer of funds. As per the instructions, Mr. Creech said he provided the Conservative Fund Canada with the necessary banking information and signed the required bank wire transfer authorization to allow the Conservative Fund Canada to withdraw a sum of money equivalent to the funds transferred into the campaign account by the Conservative Fund Canada.

97. The official agent reported these transactions in parts 2h and 3a of the Candidate's Electoral Campaign Return as provided by Elections Canada. Mr. Creech comminted, "from my prospective (sic) this was straight forward, I received a transfer andIpaid for the media."

- - - - . - -

The Official Agent, Mr. Creech, stated that he did not enter into a contract with a media company for this media buy advertising nor did he provide written authorization to anyone else to incur costs on behalf of the campaign.

nowledge edia bi by Elections Canada investigate ~e conclusion of his statemen

reviewing his answers, Mr. DeSouza wrote in his own handwritin Clearly, this was a Ol!mva organized effort if over60 campaigns 'were involved.' & A

100, I have examined the mandatory Candidate's Electoral Campaign Return filed for Mr. DeSouza's campaign as provided by Elections Canada. The return indicates that on January 6,2006 the Conservative Party of Canada transferred $9,996.85 into the official agent's campaign bank account, and that on January- 1 3,2006 an amount of $1 0.01 6.15 was paid to the Conservative Party of Canada from the same account.

101, Filed with the return was an invoice, dated January 4, 2006, issued to the DeSouza

Page 27


campaign by the Conservative Fund Canada. The invoice of $9.999.15. describes the cost as "2005-2006 Candidate share of media advertisement. Candidate share of media Uttvert/st?~;~entpurchased us agreed t o fur the 2005-2006 election" (Appendix 49).

102, I have examined the bank records filed by the ~ e ~ o u z a campaign pertaining to the 39"' federal general election, as provided by Elections Canada. I note that on January 1 1,2006 the amount of $9,996.85 was deposited into the campaign account by wire transfer from the "Conservative Party" and that on the same date, the amount of $1 0,0 16.1 5 was transferred out of the account as per the Bank Wire Instruction signed by Mr. Creech on January 4, 2006, h d directed to the Conservative Fund Canada. The wire transfer represents the amount of $9,999.15 invoiced to Mr. DeSouza by the Conservative Fund Canada plus wire transfer fees which appear to total $1 7.00.

Mailer - 103. On September 14, 2007 I, along with Assistant Chief Investigator S. Neville,

interviewed Mr. Dan Mailer, the Conservative Party of Canada candidate for the electoral district of London - Fanshwe in the 39' federal gened election. Mr- Mailer stated that he had no specific knowledge of media advertising during his campaign, other than being aware of a program of the Conservative Party of Canada through which advertising expenses would be incurred by a candidate, but paid for by the Conservative Party of Canada. Mr. Mailer deferred to his Official Agent, Mr. David Pallett, to provide specifics of the program.

Pallet* - 104. On September 14, 2007, I along with Assistant Chief Investigator S. Neville,

interviewed Mr. David Pdlett, the Official Agent for candidate Dan Mailer the Conservative Party of Canada candidate for the electoral district of London - Fanshawe in the 39"' federal general election.

1 05. Mr. Pallett stated that the campaign was minimally funded and frugal. Most advertising involved local print media and radio stations as well as lawn signs. He stated that a sum of approximately $10,000 was deposited into the candidate's account from the Conservative Party of Canada for a mix of advertising, and that the Conservative Party of Canada would determine "what was best for our area". He believed that the Conservative Party of Canada also provided brochures, but was not certain whether or not the cost of these brochures was included in the $10.000 deposit.

106. Mr.PaIlettwentontosaythatsometimepriortothedepositofthefunds,hereceiveda telephone call from the Conservative Party of Canada (he could not recall from whom) asking if there was room in the campaign spending limit to allow for a deposit by the Conservative Party of Canada into the candidate's account. Mr. Pallett indicated that he did

Page 28


not anticipate spending to the limit allowed for the campaign and confirmed that there was room. He recalls a conversation with someone at the National Offices of the Conservative Party of Canada pertaining to advertising, and states he provided verbal authorization to proceed with the transfer of funds for advertising.

107. Mr. Fallen stated that he did not enter into a contract with a media company for advertising nor did he provide written authorization to anyone else to incur costs on behalf of the campaign. He is not familiar with the company Retail Media,

108. Mr. Pallett stated that his assumption was that since the scheme of transferring funds emanated from the Conservative Party of Canada, it was a legal process.

109. I have reviewed the return filed by Mr. Mailer with Elections Canada and note an invoice dated December 23,2005 from the Conservative Fund Canada in the amount of $9,999.15, issued to the Dan Mailer campaign. An entry in the Candidate's Electoral Campaign Return, Part 2h, shows a transfer of $9,999.15 to the campaign account from the Conservative Fund Canada on January 6, 2006. On January 10, 2006, $9,999.15 was transferred from the Official Agents campaign account to the Conservative Fund Canada bank account in Ottawa.

Goldstein

1 1 0. On September 1 1, 2007 I, along with Assistant Chief Investigator S. Neville, interviewed Mr. Sam Goldstein, the Conservative Party of Canada candidate for the electoral district of Trinity-Spadina in the 3 9 federal general election. Mr. Goldstein did not confirm or deny his involvement in the media funding program.

1 1 1. - Mr. Goldstein also indicated that hewould &pond to oui questions in writing. As at Ae- -

time of swearing this Information, he has not yet provided a response ,

112. On September 10, 2007 , I along with Assistant Chief Investigator S. Neville, interviewed Mr. Douglas K. Lowry, the Official Agent for Mr. Sam Goldstein, the Conservative Party of Canada candidate for the electoral district of Trinity-Spadina in the 39' federal general election.

I 13. Mr. Lowry stated that during the election period, on or about December 1,2005. he was contacted by Ms. Suzanne McArthur of the Conservative Party of Canada and asked if he was expecting to exceed his spending limitation cap during the election period. He indicated to her that he expected to be approximately $50,000 below the campaign election spending limit. Ms. McArthur then proposed to him that the Conservative Party of Canada would deposit approximately that amount into the campaign account, and if the candidate

Page 29


received at least 10% of the vote, the campaign would receive a rebate of 60% of eligible election expenses. Mr. Lowry said he recognized that adding this amount to the election expenses amount would increase the reimbursement by an additional $30,000. I do not know the role played by Ms. McArthur.

1 14. Mr. Lowry stated he received written instructions from Ms. McArthur as to the means through which the funds were to be deposited into the campaign account and how they were to be returned immediately to the Conservative Party of Canada. There was no discussion pertaining to the advertising or its benefit to the Goldstein campaign. Mr. Lowry was simply instructed to post the funds as an advertising expense, and he did so.

1 1 5. Mr. Lowry has no knowledge whatsoever of the company Retail Media.

1 1 6. I have reviewed the return filed by Mr. Goldstein and Mr. Lowry, with Elections Canada and note that on December 28,2005 the sum of $49,989.88 was transferred by wire from the Conservative Fund Canada to Mr. Goldstein's campaign account. I note as well that on January 3,2006, $50,049.98 was transferred by wire out of the campaign account to the bank account of the Conservative Fund Canada- his movement of funds was related to an invoice in the amount of $49,999.88, dated December 23, 2005, issued to the Goldstein campaign by the Conservative Fund Canada.

Halicki - 1 17. On September 1 2,2007,I along with Assistant Chief Investigator S. Neville interviewed

Mr. Steven Halicki, the Conservative Party of Canada candidate for the electoral district of York South-Weston in the 39' federal general election.

1 1 8. Mr. Halicki stated that campaign media advertising during the election period consisted -

of advertising in the local newspaper, community papers, lawn signs and hand-outs / brochures in the electoral district The campaign manager, Mr.. Rom Cimaroli looked after

the advertising.

1 19. Mr. Halicki stated that the deposit of almost $40,000 into his campaign account and the transfer of the same amount back to the Conservative Party of Canada 'Â¥"stemme from Party Headquarters" and was dealt with by his campaign staff. He has no recollection of any conversation with anyone concerning the amount of room remaining in his campaign spending limit, but stated several times during the interview that finances were not an area he concerned himself with and left those details to his campaign management team.

120. He stated he believed that the potential for a 60% rebate from Elections Canada on election expenses was a creative means through which the Conservative Party of Canada intended to assist with funding for various campaigns.

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1 2 1. On September 1 0,2 007, E along with Assistant Chief Investigator S. Neville interviewed Ms. Barbro Soderberg. the Official Agent for Mr. Steven Halicki, the Conservative Party of Canada candidate for the electoral district ofYork South-Weston in the 39"' federal general election.

122. Ms. Soderberg indicated that she did not provide written authorization to anyone to incur expenses on behalf of the campaign. She stated that campaign advertising relied on advertising in local newspapers.

123. Ms. Soderberg stated that in December, 2005 she was approached by the Conservative Party of Canada, through the campaign manager, Mr. Rom CimaroIi, concerning a proposal to deposit funds totalling approximately $40,000 into the campaign account, which would be immediately transferred back to the Conservative Party of Canada. The funds were to be recorded as an advertising expense for the campaign. Ms. Soderberg stated she spoke with Ms. Hanh Iran and Ms. Susan Kehoe; two financially literate persons, both of the Conservative Party of Canada, and was assured by each that this process was legal. I know Ms. Kehoe to be the current Interim Executive Director of the Conservative Party of Canada. I do not know Ms. Tran's title.

124. Ms. Sodenberg stated that she has no knowledge whatsoever of Retail Media. She went on to state:

.I had contacted the " k a t i v i "ir~ in Ottawa ma was re-assun 4 4

125. I have reviewed the return filed with Elections Canada by Mr. Hdicki and Ms. Soderberg and note that banking records included show that on January 1 3,2006, the sum of $39,999.91 was deposited by wire payment from the Conservative Fund Canada into the campaign bank account. Bank records also indicate that on January 18,2006, the sum of $39.999.91 was withdrawn by bank wire transfer. This transfer of funds is related to an invoice of $39,999.9 1, dated Jmwq 4,2OO6, h m the Conservative F d Canada, dating to the media buy.

126. On September 19,2006. Elections Canada Assistant Chief Investigator A. Thouin and Assistant Chief Investigator R Lincourt interviewed Mr. Yves Laberge, the Conservative Party of Canada candidate for the electoral district of Montmorency-Charlevoix-Haute Cote N o d in the 39* federal general election. Mr. Laberge said he became a candidate on December 8, 2005, after the writ of election was signed on November 29, 2005, by

Page 3 1


contacting the Conservative Party of Canada and offering to run. He was assigned to the Electoral District of Montmorency-Charlevoix-Haute Cote N o d Mr. Laberge had no political experience prior to this involvement and only became a Conservative Party of Canada member during the year 2006. Mr. Laberge realized that he had no chance of being elected but entered the campaign as a personal experience.

127. - Mr. Laberge advised the Elections Canada investigators that he informed the Conservative Party of Canada that he had no financial resources. Mr. Laberge met with and had several exchanges with Mr. Robert Loranger, a Conservative Party organizer for the eastern part of the province of Quebec. Mr. Loranger also introduced and provided Mr. Henri Gagnon as the Official Agent for Mr. Laberge. Mr. Loranger told Mr. Laberge that the Conservative Party of Canada would look after his publicity, which would consist of advertisements in local newspapers and radio stations.

128. In December 2005, Mr. Laberge was informed by Mr. Loranger that the publicity campaign had been developed and was to be launched in the near future. Mr. Laberge indicated that he heard regional messages during the campaign, which he took to be advertising placed by the Conservative Party of Canada, in which the name of his Official Agent was mentioned along with other Candidates or Official Agents in his region. He did not have any input regarding the content nor did he enter into any contract or any form of agreement for that publicity pursuant to section 446 of the Canada Elections Act.

129. Mr. Laberge indicated to Assistant Chief Investigator Thouin that Mr. Michel Rivard, a Conservative Party of Canada organizer for the Province of Quebec, told him (Mr. Laberge) that there would be a transfer of money into his campaign bank account and this would allow him to purchase his signage.

- 130.. The Laberge campaign received two invoices from the Conservative Fund Canada. The first was dated 3 1 December 2005, for signage totalling $3,985. The second was dated 3 January 2006, for publicity totalling $24,64 1.34. The two invoices totalled $28,626.34 (Appendix 50).

1 3 1. On January 13, 2006 the Conservative Fund Canada wire transferred $28,6 1 1.34 ($28,626.34 less a $15 bank fee) into the Laberge campaign bank account and on the same date, by way of wire transfer, $28,701.34 ($28,626.34 plus a $75 bank fee) was transferred back to the Conservative Fund Canada bank account (Appendix 50).

132. Mr. Laberge informed Assistant Chief Investigator Thouin that there was no mention to him from Conservative Party of Canada officials of the fact that he could be eligible to receive a 60% reimbursement to his campaign from Elections Canada for his election expenses.

133. Mr. Laberge stated that his Official Agent, Mr. Gagnon, had the Candidate's Electoral Campaign Return reviewed by Mr. Rivard to ensure its accuracy. Mr. Laberge felt that the regional publicity was favourable to his campaign.

Page 32


134. Assistant Chief Investigator Thouin sought to interview the Official Agent, Henri Gagnon, however Mr. Gagnon refused to be interviewed by Elections Canada investigators.

135. I have reviewed the return filed by Mr. Laberge and Mr. Gagnon with Elections Canada and note that included banking records show that on January 12, 2006, the sum of $28.61 1.34 was (wire) deposited to the campaign bank account and on the same date, January 12,2006, the s u m of $28,701.34 was (wire) transferred from the campaign bank account to the Conservative Fund Canada, These transfers were related to 2 invoices from the Conservative Fund Canada. The first, dated January 3,2006, was in the amount of $24,641.34, This included $20,100.35 for the candidate's shore of media buy costs and $4,540.99 for the candidate's share of advertising production (totalling $24,64 1.34). The second invoice, dated December 3 1,2005 was in the amount of $3,985, and indicates it was for signage for the 2005-2006 election campaign. The total of the two invoices is $28,626.34. (Appendix 50)

136. I was advised by Mr Kumpf of Retail Media that Retail Media does not cany out production of advertising (paragraph 651, therefore the item pertaining to production costs noted in the Conservative Fund Canada invoice (paragraphs 49,53,93,146, 148,224)

. must relate to a separate contract for production. No such contract has been filed with Elections Canada by the candidate. I have no knowledge of the nature of the production costs charged to Mr Laberge by the Conservative Fund Canada.

1 37. On ~e~ternber 1 7,2006, Assistant Chief Investigator R Lincourt and Assistant Chief Investigator A. Thouin interviewed and obtained a statement from Mr. Gary Caldwell,

. . candidate for the Conservative Party of Canada in the electoral district of Compton- Stanstead.

138. Mr. Caldwell stated that he was aware that the permitted campaign limit of election expenses for his electoral district was approximately $74,000.00, but Mr. Caldwell's objective was to limit the expenditures of the campaign to less than $15,000.00 and his plan was to limit electoral campaign advertising to regional newspapers and two radio stations.

139. Mr. Caldwell indicated to Assistant Chief Investigator Lincourt that in the second half of his campaign he received a call from Mr. Michel Rivard. a Conservative Party of Canada organizer for the Province of Quebec, who stated that the Conservative Party of Canada had money for French radio and television advertising in the Province of Quebec. Mr. Caldwell stated that the advertising did not focus on him as the candidate for Compton-Stanstead, and that both he and his Official Agent, Mr. Fauteux, were of the opinion that this advertising initiative from the Conservative Party of Canada focused on Mr. Harper, as leader, and the Conservative Party of Canada itself.


140, Mr. Caldwell told Assistant Chief Investigator Lincourt that,Mr. Rivard instructed him (Mr. Caldwell) that he would receive money and then return it to the Conservative Fund Canada. According to Mr. Caldwell "I/ was clear that the money came from the Party cmd was returning to the Party. " Mr. Caldwell stated that he and his Official Agent were told by Mr. Rivard that they would receive a reimbursement of 60% of the advertising expenses from Elections Canada. Mr. Catdwell told Assistant Chief Investigator Lincourt that when Mr. Rivard called him, Mr. Caldwell agreed to pay a share of the National Party Advertising with the funds forthcoming from the Conservative Fund Canada, however Mr. Caldwell did not contract directly with any advertising or media agency.

14 1. The Caldwell campaign received two invoices from the Conservative Fund Canada- I have reviewed the documents as filed with Elections Canada. The first was dated December 3 1,2005, for sienage totalling $3,985. The second was dated January 3,2006, for media buy $27,125.16 and advertising production of $6,128.01, totalling $33,253.17. The - two invoices totalled $3 7,Z 8.1 7 (Appendix 5 1).

142. I was advised by Mr Kump f of Retail Media that they did not cany out the production of advertising (paragraph 671, therefore the item pertaining to production costs noted in the Conservative Fund Canada invoice (paragraphs 49,53,93,136,146,148,224) must relate to a separate contract for production. No such contract has been filed with Elections Canada by the candidate, I have no knowledge of the nature of the production costs charged to this campaign by the Conservative Fund Canada.

Fauteux

43. On September 18, 2006, Assistant Chief Investigators R. Lincourt and A. Thouin interviewed and obtained a statement from Mr. Rdjean Fauteux, Official Agent for Mr. Gary Caldwell, candidate for the Conservative Party of Canada in the electoral district of Compton-Stanstead.

144. Mr. Fauteux stated that he had received two invoices from the Conservative Fund Canada, one of which, in the amount of $3,985.00 was for the electoral signs, and another invoice in the amount of $33,253.1 7 for the candidate's share in the national advertising campaign.

145. Mr. Fauteux indicated to Assistant Chief Investigator Lincourt that he did not contract with any advertising or media agency with regards to these invoices, Mr. Fauteux did not provide written authorisation to anyone to incur any expense or enter into any contract on behalf of the campaign as per section 446 of the Canada Elections Act.

146. I have reviewed the Candidate's Electoral Campaign Return filed by Mr. Caldwell and Mr. Fauteux with Elections Canada and note that bank statements indicate that on January 20,2006, the sum of $37,238.17 was deposited by wire transaction into the campaign bank account by the Conservative Fund Canada. The return also verified that on the same day,

Page 34


Janua~y 20,2006, the sum of $37,243.17 ($37,238.17 plus a $5 bank fee) was transferred from the campaign account by way of a wire transfer to the Conservative Fund Canada bank account. This action was related to the two invoices (noted at paragraph 14 1) submitted to the Caldwell campaign by the Conservative Fund Canada. The first, dated December 3 1. 2005, in the amount of $3,985. for signage, and the second. dated January 3,2006, in the amount of $33,253-1 7, for media buy and advertising production costs. The second invoice indicates that $27,12516 was the candidate's share of the media buy cost and allocated $6,128.01 for the candidate's share of advertising production costs. The two invoices total $37,23 8.1 7 (Appendix 5 1).

147. On March 1, 2007 Mr. Fauteux filed with Elections Canada an amended Candidate's Electoral ~ a r n ~ a i g n Return, withdrawing the $37243.1 7 as an election expense. Since this action resulted in the expense being no longer eligible to qualify for the 60% reimbursement from Elections Canada, the Official Agent sent a cheque for approximately $4,000.00 to Elections Canada to reimburse the 15% advance that the campaign had previously received pursuant to subsection 464(I)(c) of the Canada Elections Act.

148. I was advised by Mr. Kumpf of Retail Media that Retail Media does not cany out production of advertising (paragraph 67). The item pertaining to production costs noted in the Conservative Fund Canada invoice (paragraph 49,53,93,142,146,224) must relate to a separate contract for production. No such contract has been filed with Elections Canada by the candidate. I have no knowledge of the nature of the production costs charged to Mr. Caldwell by the Conservative Fund Canada.

McDonald

149. On September 20, 2007 I, along with Assistant Chief Investigator S. Neville, interviewed and obtained a statem&t from Mr. Perry McDonald, the Official Agent for Mr.. Garreth McDonald, the Conservative Party of Canada candidate for the electoral district of Winnipeg-North in the 3p federal general election.

150. I reviewed the Candidate's Electoral Campaign Return filed with Elections Canada by official agent Peny McDonald, and noted that there was no claim for the candidate's participation in the media buy initiative.

1 5 1. During our interview, Mr. McDonald remembered "signing on to something to do with a local radio station called CJOB." Mr. McDonald stated that this was possibly arranged through Mr. Jim Moore. Conservative Party of Canada organiser for Manitoba. Mr. McDonald could not remember any cost for this ad on CJOB radio, since he did not receive an invoice from CJOB. In my presence he reviewed the Candidate's Electoral Campaign Return that he completed as Official Agent and confirmed that no such invoice had been reported,

152. Mr. McDonald was not aware of and could not recall receiving any invoice or invoices,

Page 35


from either Retail Media or the Conservative Fund Canada, with regard to a media buy for the 2006 election. When asked if he remembered the Conservative Fund Canada forwarding money to his campaign bank account. which he then returned to the Conservative Fund Canada, he replied that this seemed familiar. Mr. McDonald said

"I do seem to recall a wash in and oi I [ of our account. I do seem to recall an entry of $6,500 and then it was taken out again. This is what I mean by a wash. It meant SO for me in my calculation of the cost of the campaign."

. .

153. On instructions from Mr McDonald, the Assiniboine Credit Union, Charieswood Branch on January 8,2008 faxed to Assistant Chief Investigator S, Neville, banking details for the period of December 3 1, 2005 to September 30, 2006, pertaining to the campaign bank account. I noted that on January 1 1,2006, $1 O,83 3.75 was wire transferred into the account and on January 12,2006, $10,800.62 was wire transferred out of the same account. This deposit corresponds with the Registered Party Financial Transactions Return for 2006 (paragraph 154). Inotealsolhat the bankingrecords indicate the withdrawalof$10,800.62 left a zero balance in the account. The account did remain active thereafter, however.

154. The annual Registered Party Financial Transactions Return for 2006 was filed with Elections Canada by the chief agent for the Conservative Party of Canada. hi part 3 b, titled "Statement of Transfers to a Candidate, a District Association, a Leadership Contestant or a Nomination Contestant" (Appendix 52, at page 4 of 37) the return indicates $10,833.75 as having been transferred on ~an* I I , 2006 to the campaign of electoral district 4601 2, Winnipeg-North. The Return further indicates that the transfer was to Mr. James Court I was told by Mr. Perry McDonald that his accountant and campaign auditor was Mr. James Court.

155. On Ma& 18,2008-1, along with Assistant Chief Investigator S. Neville, met with Mr. -- - James Court. Mr. Court stated that, contrary to Mr. ~ c k n a l d ' s assertion, he (Mr. Court) was not and is not the accountant for Mr. McDonald personally nor was he the accountant for the McDonald campaign. Mr. Court said he agreed to be the auditor for the McDonald campaign only after being approached by Mr. Jim Moore, an organizer for the Conservative Party of Canada in Manitoba who is also a client of Mr. Court.

156. Intheaggregateinvoice#1101868-1 (Appendix 20,andparagraphs79. 169,228). obtained from Retail Media pursuant to a Production Order, I note that the electoral district of Winnipeg-North is listed as being billed $10,833.75 (including GST). Also among the documents I received pursuant to the execution of the Production Order, I note that an individual invoice #1101868-1. also dated January 1, 2006 in the amount of $10.833.75 (including GST), pertaining to the Electoral District of Winnipeg North was included (Appendix 19). Each of these invoices is addressed to "The Official Agents for Conservative Party Candidates, # 1 720 - 130 Albert Street. Ottawa, Ontario. KI P 504. Attention: Susan Kehoe".

15 7. As noted at paragraph 150. the amount was not claimed by the candidate as an expense,

Page 36


nor was the invoice submitted to Elections Canada by the campaign. I do not know who actually paid the amount invoiced by Retail Media.

TELEPHONE INTERVIEWS

Brown ridge

1 5 8. On June 28,2007, Assistant Chief Investigator P, Pettier was in telephone conversation with Mr. Ken Brownridge, the official agent for Mr. Dick Harris, the Conservative Party of Canada candidate in the electoral district of Cariboo-Prince George (British Columbia) for the 39* federal genera! election. Investigator Pottier explained that he was contacting Mr. Brownridge regarding media buys. referred to in the January 1 2,2007 Ietter from the Chief Electoral Officer to Mr. Brownridge (Appendix 7 and paragraph 37). Mr. Brownridge stated that this was a National Advertising Program sponsored by the Conservative Party of Canada and that the campaign opted to participate. He stated that this would save the campaign from running ads locally and as far as he was concerned, nothing wrong was done. Mr. Brownridge stated "we were asked andsaid it was OK (fit &ah 't cost anything- " He also advised the Elections Canada investigator that he had submitted his resignation as

official agent to the president of the Electoral District Association in the last month-

159. I am advised by Assistant Chief Investigator Pottier that Mr. Brownridge refused to be personally interviewed by Elections Canada investigators and that Mr. Harris did not return telephone calls by Elections Canada investigator Pottier.

1 60. I have reviewed the Candidate's Electoral Campaign Return filed with Elections Canada and note it indicates that this campaign was invoiced $29,999.95 on December 23,2005 by the Conservative Fund Canada for '2005-2006 Candidate share of media advertisement.'

. . . . . . . . - . . . . - - . . . . . . . . . . . . . . . . . . -. . . . - . . . . . . . .

16 1. I note that Part 2h of the same Return indicates a transfer of $29,999.95 to the campaign by the Conservative Fund Canada on January 6,2006. Listed in part 3a of the Return is an expense paid by the campaign of $29,999.95 to the Conservative Fund Canada on January 3,2006. This expense was identified as being paid as a result of an electronic (bank) transfer.

162. In my review of Mr. Harris' Candidate's Electoral Campaign Return, I note that details contained therein are in error. This was confirmed by comparing bank records submitted by the campaign to Elections Canada against the Candidate's Electoral Campaign Return. The bank records indicate that the Conservative Party of Canada transferred $29,997.65 to the official agent's campaign bank account on January 3, 2006 and that $30,024.95 (the invoiced amount of $29,999.95 plus $25 bank charge) was withdrawn from the official agent's bank account by way of a wire transfer on January 9,2006.

163. Mr. Harris' campaign was among the 14 from which the Chief Electoral Officer requested additional information (Appendix 7). The package provided by Mr. Harris (part of Appendix 8) contains a copy of an invoice bearing the Retail Media logo, and indicates

Page 37


that themedia buy share of theexpense to Mr. Harris was $28,037.34. Iam unawareofthe reason for this discrepancy. It would appear the difference might be accounted for by adding GST to the invoiced amount,

ELECTIONS CANADA

164. On August 2, 2007, Elections Canada Assistant Chief Investigator S. Neville interviewed Mr. Rani Naoufal, an auditor employed in the Political Financing and Audit Directorate at Elections Canada. Mr. Naoufal confirmed that on October 20,2006 he had a telephone conversation with Mr. Denny Pagtakhan, official agent for Conservative Party of Canada candidate Elizabeth Pagtakhan in the electord district of Vancouver East, because Mr. Naoufal sought additional information with respect to a $29,999.70 invoice, dated January 4,2006 from the Conservative Fund Canada for mediaadvertising, submitted in the Candidate's Electoral Campaign Return (Appendix 5)*

165. Mr. Naoufal made note of the fact that in the course oftheir conversation, Mr. Pagtakhan said, "I think we contributed to TV national advertising. There was no way we can spend our limit so we were asked by the party if we can help contribute"

166. Based on this conversation, Ms. Manon Hamel, Acting Director, Political Financing and Audit Directorate at Elections Canada, began the review of the filings of candidates of the Conservative Party of Canada, and identified the 67 campaigns involved in the media buy (paragraph 35).

REVIEW OF RECORDS PRODUCED BY RETAIL MEDIA -

167. An application for a Production Order was submitted to Nordheimer, J of the Superior Court of Justice for the Province of Ontario. On December 14,2007 His Honour signed the Production Order, which I then served on counsel for Retail Media the same date. His Honour also issued a sealing order with respect to the Production Order and supporting documentation. That sealing order remains in effect as of the date of this Information. The documents referred to in paragraphs 78,80,156 and 167 - 222 reference records produced pursuant to this Production Order.

168. On January 14,2008 1 took possession of the records produced by Retail Media pursuant to the Production Order. I have conducted an analysis of these records. The Retail Media records show that invoices issued by Retail Media are addressed either to the conservative Party of Canada or to "Official Agents for Conservative Part}' Candidates" and sent to the attention of Ms. Susan Kehoe (at that time the Chief Financial Officer of the Conservative Party of Canada and currently the Interim Executive Director of the Conservative Party of Canada) at National Headquarters.

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RETAIL MEDIA INVOICES

169. Although officials of Retail Media indicated in ourmeeting (paragraph 63) that four invoices were issued to the Conservative Party of Canada (paragraphs 69 - 7 1 ), invoices bearing a total of 7 separate invoice numbers were produced by Retail Media pursuant to the Production Order. The invoices are described as follows (Appendix 1 9):

a. Invoice 1 1 0 1 867 dated November 30, 2005 was created on Retail Media letterhead and was addressed to the "Conservative Party of Canada, # 1 720 - 1 30 Albert Street, Ottawa, Ontario, KIP 5G4, Attention Susan K e h d . The amount of the invoice was $2,934,600 (including GST). The detail read "December 2005 media expenditure";

b. Invoice 1 101 868 dated January 1,2005 (it is possible the date should read 2006 since the detail of the invoice concerns "January 2006 media buy"), was created on Retail Media letterhead and was addressed to the "~onservative Party of Canada, #I 720 - 130 Albert Street, Ottawa, Ontario, Kl P 5G4, Attention Susan Kehoe". The amount of the invoice was $3,63 1,890 (icluding GST). A revised version of this invoice was also provided. The sole change to the revised version is that the amount read "$6,566,490" (including GST). No other detail was provided to explain the discrepancy in amounts Or the reason for the re-issuance of the invoice;

c. Invoice 1101868-1,datedJanuary 1,2006. Thisinvoice was42pagesintotal. The first page appears to be a summary of the following 4 1 pages in that it lists 41 Electoral Districts (not candidate names) and the media buy amount to be attributed to each Electoral District campaign (each named Electoral District is

. . .. - outside Quebec). The following 41 pages were separate invoices capturing the - -

same media buy amounts identified on the page 1 summary and attributed to the 4 1 Electoral Districts identified;

i. Each of the invoices (i-e. each of the 42 pages) was on Retail Media letterhead and each was addressed to "The Official Agents for Conservative Party Candidates, #I720 - 130 Albert Street, Ottawa,, Ontario, Kl P 5G4, Attention: Susan Kehoe". Each of the 42 pages bore the invoice number 1 10 1 868- 1. On each page, the word "Invoice" was mis-spelled as "nvoice". The mis-spelled word accords with the invoices provided by candidates who submitted additional documentation as requested by the Chief Electoral Officer (Paragraph 42,43 and Appendix 8);

d. Invoice 1 1 0 1868-2 dated January 1,2006 was created on Retail Media letterhead and was addressed to the 'Conservative Fund Canada, # 1 720 - 1 30 Albert Street, Ottawa, Ontario, KIP 5G4, Attention Susan Kehoe". The amount of the invoice was $158,579 (including GST and Quebec tax). The detail reads ,

Page 39


"Quebec January 2006 Media Expenditure";

e. Attached to invoice 1 101868-2 were 28 additional invoices (for a total of 29 pages), all bearing the root invoice number 1101 868 which were numbered sequentially from 1 1 01 868-4 to 1 101868-32. Each was dated January- 1,2006 and each was on Retail Media letterhead. I have not received an invoice numbered 1 10 1 868-3. Candidate names as well as Electoral Districts (each is in Quebec) appear on the detail line of the invoices along with the media buy amount to be attributed to each Electoral District campaign;

i. Each of the invoices numbered 1 10 1 868-4 to - 32 was addressed to "The Official Agents for Conservative Party Candidates, # 1 720 - 13 0 Albert Street, Ottawa,, Ontario, K I P 5G4, Attention Susan Kehoe". On each of the 28 pages the word "Invoice" was mis-spelled as %voicen. The mis- spelled word accords with tile invoices provided by candidates who submitted additional documentation as requested by the Chief Electoral Officer (Paragraph 42,43 and Appendix 8);

ii. Included as well is an e-mail dated January 3,2006 from Ms. Kehoe, (then) Chief Financial Officer of the Conservative Party of Canada to Ms. De la Coumeuve, Vice President Corporate Controller at The Media Company (Retail Media). Ms. Kehoe said she had reviewed the invoices numbered 1 1 0 1 868-1 to 3 1 and provided comments to Ms. Dc la Courneuve in which she instructed Retail Media to change the names of several candidates on the invoices; .

f. Invoice' 1 10 1874 dated December 28, 2005 was created on Retail Media letterhead and was addressed to the Conservative Party of Canada, # 1 720 - 130

- Albert Street, Ottawa, Ontario, KIP 5G4, Attention Susan Kehoe. The amount of the invoice was $426,921.4 (including GST). The detail reads "January 2006 media expenditure";

g. Invoice 1 10 1875 (Revised) dated January 4,2006 was created on Retail Media letterhead and was addressed to the Conservative Party of Canada, #I720 - 130 Albert Street, Ottawa, Ontario, KIP 334, Attention Susan Kehoe. The amount of the invoice was $400,000 (including GST). The detail reads "Radio incremental media buy";

i. Attached is an e-mail from Ms. Kehoe to Ms. De la Coumeuve indicating that Mr. Miek had received approval from the Campaign Director (whom I believe to be Mr. Douglas Finlay (paragraph 180, 1 8 1 )) to incur additional radio advertising of $4OO,O# (Appendix 24 and paragraphs 1 74, 1 75);

h. Invoice 1 10 1 878 dated January 16.2006 was created on Retail Media letterhead and was addressed to the Conservative Party of Canada, #I720 - 130 Albert

Page 40


Street, Ottawa, Ontario. KIP 5G4, Attention Susan Kehoe. The amount of the invoice was $200,000 (including GST). The detail read "Radio incremental media buy";

The account appears to have been reconciled via invoices 1 10 I 932 and 1 101 933, each dated June 12,2006. Invoice 1 101932 was addressed to "The Official Agents for Conservative Party Candidates, while invoice 1 1 0 1 933 was addressed to the Conservative Fund Canada. Each of these invoices was sent to the same location, i.e. # 1720 - 130 Albert Street, Ottawa, Ontario, KIP 5G4, Attention Susan Kehoe. Each of these invoices included GST and Quebec tax;

. Invoice 1 101932 indicates that the total media buy attributed to Official Agents for Conservative Party of Canada Candidates was $698,226 for television and $477,229 for radio advertising. When pre-billed amounts (the amounts billed via the invoices noted above in this paragraph) were taken into account, the purchase of broadcast air time attributable to the Official Agents for Conservative Party of Canada Candidates indicates that Retail Media overbilled the Conservative Fund Canada by $125,502.63, Retail Media issued a credit note for this amount;

ii. Invoice 1 1 01 933 indicates that the total media buy attributed to the Conservative Fund Canada was $6,522,331.10 for television and $649,907.34 for radio advertising. When pre-billed amounts (the amounts billed via the invoices noted above in this paragraph) are taken into account, the purchase of broadcast air time attributable to the Conservative Fund Canada indicates that Retail Media under-billed the Conservative Fund Canada by $92,759.45. The invoice advised the Conservative Fund Canada of its outstanding liability.

- . - - - - - . .

RETAIL MEDIA E-MAILS

1 70. Paragraphs 1 70 - 222 refer to documents produced via the Production Order. hi an e- mail to Mr. Peny Miele of Beringer Capital, dated December 6,2005 and titled "Subject: Riding Media" (Appendix 21), Mr. Kumpf (noted at paragraph 63 as Vice President, Broadcast Operations, Retail Media) states that Retail Media is the media "purchasing agent" for the Conservative Party of Canada. He suggested that consideration be given to approaching the Broadcast Arbitrator (paragraph 1 4) to seek a ruling on the purchase of media advertising time by a representative of the Conservative Party of Canada or by candidates themselves instead of Retail Media. Mr. Kumpf states:

"WWe our thinking is that this option would be legal we are not certain uf this beyond ail reasonable doubt. Therefore, with your permission we 'd like to contact she Broadcast Arbitrator first thing this morning and enquire. "

He goes on to state:

Page 4 1


"From our standpoint this would be the most preferable option. The massive logistics of RMi handling widespread local-bused media is not some/hing that we could entertain at this late date. The coordination iftvuf~~ed in this type of project is something that we would have needed a good deal of advance time to prepare for." (Emphasis added.)

17 1. Mr. Miele replied to Mr. Kumpf in an e-mail also dated December 6,2005 (Appendix 21) and stated:

"Hold tight until I ask Mike in Ottawa, we may! not want anyone talking to them. "

1 72. In Mr. Miele's e-mail referred to above, I believe "Mike in Ottawa" refers to Michael Donison, (then) Executive Director of the Conservative Party of Canada, and "them" refers to the Broadcasting Arbitrator.

173. I do not know the role played by Mr. Miele in the media buy, nor do I know why Mr. Kumpf sought Mr. Miele's advice. From the nature of the request and Mr. Miele's comments, however, I believe that Mr. Miele is a person of influence with or within the Conservative Party of Canada.

1 74. This belief is supported by an e-mail dated January 4,2006 (Appendix 24) from Ms. Kehoe to Ms. Linda de la C o m e , with copies to Ms. Marilyn Dixon, Pat Miguel and Mr. Kumpf, all at MBS, a company affiliated with Retail Media, advising that:

"Perry Miele has received approval from the Campaign Director to incur an incremental radio media buy in the amount of $400,000 (GST included). You are therefore authorized . - .. to - proceed . - - - with - - . - his instructions up to that amount. "

175. This belief is further supported by an email dated May 4,2006 from Mr. Kumpf to Linda de la Coumeuve and Marie Gibson, both of Retail Media, stating that Retail Media's client with respect to the media buy is not the Conservative Party of Canada, it is "Perry" (Appendix 22). I believe "Perry" refers to Mr. Miele.

176. In an e-mail dated December 8,2005 (Appendix 25) from Mr. Campbell (referenced above at paragraph 631, President. and CEO of GroupM Canada, to Mr. Kumpf and copied to Mr. Miele , Mr. Campbell states:

"Received a ca// from irving Gerstein.,. They may be spending up to their legal limit on this campa/gn. We are to ver~'fy any additional requests for spending with him before they are actioned

Mr. Campbell goes on to state:

"They also are thinking of "swifching " some of the ;'/em< over to the riding. It

Page 42


sounded like the reason was to legally m&ke advertising expenditures. This fol/o~vs our preliminary conversations with Perry. Apparently I will get a callfrom Mike Donism and Susan Kehoe. Details are sketchy and I am not sure how national or regional tv could constitute a riding expense unless all the ridings in a region pooled expenses. I also reiterated that we need payment from the par0 only. "

1 77. In the quotation above, Mr. Campbell refers to the following persons:

a. I believe Irving Gerstei n to be the Chair of the Conservative Fund Canada, the chief agent of the Conservative Party of Canada. Mr. Gerstein is registered with Elections Canada in this role (Appendix 1);

b I believe Perry to be Peny Miele of Beringer Capital, the person referred to in paragraph 1 70, see also paragraphs 173 and 1 74;

c. I believe Mike Donison refers to the (then) Executive Director of the Conservative Party of Canada',

d. I believe Susan Kehoe refers to the current Interim Executive Director of the Conservative Party of Canada. During the period of (he 3gth federal general election, Ms. Kehoe was the Chief Financial Officer of die Conservative Party of Canada.

178. In an e-mail dated December 9,2005 (Appendix 26) from Ms. Erin Cluett, Broadcast Negotiator, Retail Media to Ms. Janice Barnett, CBC English TV Sales, National Network, Ms. Cluett stated:

"As the designatedpurchasing agent for the Conservative Party of Canada we need to shift dollars from the currently placed statutory paid time allotmentand replace these dollars under "The Official Agents for Conservative Party Candidates". As

- such, this is not of the party's statutory allokd time. "

179. In her response to Ms. Cluett, also on December 9,2005 (Appendix 26), Ms. Barnett stated:

"We do not accept buysjrom individual candidates. .~~ part of the rules imposed upon us as the National Broadcaster. You, as the registered party, must buy on behalf of the candidates. " '

1 80. The response from Ms. Barnett was provided to Mr. Kurnpf who, also on December 9, 2005 sent an e-mail (Appendix 26) to Mr. Doug Finley, Mr. Donison and Ms. Rebecca Thompson, allat Conservative Party of Canada e-mail addresses, as well as to Mr. Miele, forwarding the e-mail from Ms. Barnett. Mr. Kumpf stated:

"Please see negative response below from the CBC election sales representative regarding our request to change the current booking over to "Candidates".. . (It) may be an indication of what we can expect from SRC. (ie, the French CBC) and

Page 43


possibly some of the other broadcasters come Mondcsy after a more extensive review of our request. "

He went on to state:

"I can and will respond to CBC upon receipt of your input. "

181. I believe Mr. Finley to be the Campaign Director for the Conservative Party of Canada. Ms. Thompson's role in not known to me.

182. The issue of the purchase of advertising air time arose again on December 20,2005 when Ms. Judy Strathman, an Advertising Consultant fo he French language Radio Canada television network wrote to Mr. Kumpf and stated (Appendix 26):

"I can only accept bookingsfor "The Conservative Party of Canada". I have 3 contracts currently booked as The Qfflcial Agents for the Conservative Party Candidates ...which I will need to either change to The Conservative Party of Canada or else coneel ... "

183. In a series of e-rnails dated December 9,2005 (Appendix 27), Mr. Donison exchanged comments with Mr. Don. Plett concerning (he involvement of Manitoba campaigns in the media buy. Mr. Donison asked Mr. Plett to:

" . call the Manitoba campaigns right away- and get back to me as soon as you can- we will try to bring them in ifwe can."

The exchange of messages continued with Mr. PI& providing Mr. Donison' with a list of 8 electoral districts in Manitoba and accompanying amo-ynts of media buy participation. T& .

amounts ranged from $10,000 to $40,000.

184. Based on the nature of the e-mails and the fact that all electoral districts pertain to Manitoba, I believe that Mr. Plett is an official of the Conservative Party of Canada in Manitoba. He is currently listed as the President of the National Council of the Conservative Party of Canada on the Conservative Party of Canada web site - http://www.conservative.ca/EN/299 11.

1 85. From my review of the records produced to me by Retail Media, I believe that effort was expended by Retail Media on amending contracts with various broadcasters. In a series of e-mails dated December 12,2005 (Appendix 281, primarily between Mr. Kumpf and Mr. Donison, discussion centred on re-allocating funds to local campaigns from the Conservative Party of Canada broadcast contracts. Only the CBC declined to amend their contracts to move funds from national Conservative Party of Canada advertising and allocate it to the official agents of candidates. In a further series of e-mails .between Ms. Cluett of Retail Media and several broadcasters, Ms. Cluett indicated a need to ". . .shift dollars from the currently placed statutory paid time allotment and replace these dollars

Page 44


under "The Official Agents for Conservative Party Candidates" (Appendix 26).

186. Also on December 12,2005 Mr. Kumpf and Ms. Dixon exchanged e-mails (Appendix 29) and discussed funds which had already been paid to broadcasters for time and which Retail Media now wished to transfer from national advertising for the Conservative Party of Canada to local campaigns. Mr. Kumpf stated:

" ... the cheque situation going forward is straightfonvard (as we will outline the "candidate "portion) however, what aboufwhere we 've already paid and it is nmv transferred. Frankly, the reason we need to know this is ifthe sales reps ask us... "

Ms. Dixon responded:

"Can the suppliers q p t y whatever payment they have received to the hvo campaigns? Otherwise they will need to give us a refund for one and we will issue another cheque. Since we are the only one paying, they should be able to transfer the funds internally. "

1 87. When Ms. Dixon speaks in paragraph 1 86 above of ''the two campaigns7', I believe she refers to the national Conservative Party of Canada advertising.campaign, and the effort to switch funds from that campaign to the local candidate campaigns,

1 88. In further e-mail correspondence on December 12,2005 (Appendix 301, Mr. Kumpf advised Mr. Donison that:

'We have just received a fax from SRC (the Francophone CBQ that shows our booking having been changed to reflect the new title. This is a great relief as they will acco wit for approximately 15-20% of our TV investment in Quebec. -

The only negative response received then is on CBC in Atlantic Canada for the relatively miniscule booking amount of $3,474. It 's your call of course but I suggest for your consideration that we let this one lie as it appears that SRC and CBC, which for all intents andpurposes we one company, never checked in with each other to see what the other was doing. Ifwe go after CBC on the S3K then we may run the risk of having SRCpull back from their current decision ... andas stated, we have a lot more invested with SRC (roughly $80-100,000). "

1 89. Records produced by Retail Media indicate that CBC subsequently recanted the position of non-acceptance of advertising in the name of the Official Agents for Conservative Party candidates and broadcast the ads. The CBC took the position that the decision not to accept advertising in the name of Official Agents of Conservative Party Candidates was a misunderstanding and ^a matter of semantics"(Appendix 3 1).

190. On December 12,2005, Ms. Dixon sent an e-mail to Ms. Kehoe (Appendix 321, and stated:

Page 45


'Just to confirm ow conversation and next steps:

i, You are confirming that there will be a separate creative piece for the candidate advertising (today)

is. We will provide you with a summary of the riding dollars that we have been able to allocate (tomorrow)-

iii You will take these allocations and confirm there is room in each of the riding (candidate 's) budget then get back to us with final confirmation that the allocations are okay

iv. You will provide us with the Quebec ridings and allocations then we will provide you with the amounts we have been able to allocate. "

1 9 1. The initial estimated total of media buy advertising "that will be allocated to the ridings" was $1,468,800 according to an e-mail sent on December 12,2005 by Mr. Kumpf to Ms. Thompson. Copieswere sent to Mr. Miele, Mr. Finley, Mr. Donison, Mr. Muttart (paragraph 222), Mr. Campbell and Ms. Dixoa (Appendix 33).

1 92. On December 13,2005 Mr. Donison sent Mr. Kumpf an e-mail (Appendix 34) towhich - was attached a listing of electoral districts indicating the maximum election expenditure for

each electoral district. Mr. Donison stated:

"As discussed last week, 30K would be about the very maximum that could be attributed to any one candidate regardless of the amounts they pledged last week- with 10-20K being the norm."

193. On December 14,2005 Ms. Kehoe wrote to Mr. Donison and Mr. Paul Lepsoe, legal counsel the ~onservative P& of Canada and the C ~ n s e d v e Fund Canada, about Quebec media advertising (Appendix 3 5). She asked:

. if one assumes 18 ridings to share the $800,000 buy is it unreasonable to assume that a media buy of $45,000 is too rich /or any one ridings (sic) limit?"

Mr. Donison then wrote to Mr. Kumpfand said that:

"... We need another 8 ridings urt fop of the 18you have chosen. Which are the next 8 ridings or so that would be most likely to receive any of these ads- we should go with them. f t

Mr. Kumpf responded:

"The final one that looks applicable is St. Hyacinthe-Bagot. The eas~ern portion ...ge ts some Sherbrooke TV ... That leaves us 1 shy. l a m not sure where to turn to on this. "

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Mr. Donison replied:

"Why not just chose a riding that borders on one of these and go for it?"

194. In an e-mail dated December 14,2005 (Appendix 36) from Mr. Kumpf to Mr. Donison (with a copy to Ms. Kehoe), Mr. Kumpf stated:

"Just so f fully understand - I am still to work with the column marked Contribution" and that is what we will be billing each of these candida!es - despite the fact that the actual media buy/or that region will be less?"

1 95. On December 1 5,2005 Mr. Kumpf exchanged e-mails with Mr. Donison (Appendix 37). Mr. Donison stated:

"I have just received a call from Republtk.,, They tell us that the 25 candidates you .have selected to assign the media buy to are the very campaigns in Quebec who are planning to spend most of their limit- and that at this point only 3 or 4 have indicated to the Quebec campaign that they have cap room and are therefore in a position toparticipate. Obviously, the initial media buy decisions made right at the beginning of the campaign have determined which candidates are on yaw list to participate. However, it is those very candidates, given that they are more targeted that expect to spend their limits.

1 was faced with a decision/rorn ~epublik Option A was that they had until tomorrow to indicate to the broadcasters which candidates were included in this media buy to meet the scheduled broadcasting of these ads in Queb ec... Option B ... was to delay broadcast for a few days giving them until first thing Monday

.-

morningto provide the list of candidates.

...I had no choice but to iustruet that we proceed with Option B. "

Mr. Kumpf responded:

'...David (upon his retwn), Marilyn and myself will discuss the situation from the media buy perspective and see if there are any angles we can come up with."

196. I believe "Republik" mentioned in the e-mail above refers to a production company engaged to create advertising for the Quebec campaign. I believe "David" refers to Mr. Campbell, President and CEO of GroupM. I believe "Marilyn" refers to Marilyn ~ i x o n , Chief Operating Officer of Retail Media and Mediacorn (paragraph 63).

197. On December 15. 2005 Mr. Kumpf and Mr. Donison exchanged additional e-mails (Appendix 38) with respect to attributing funds to various campaigns in the Montreal

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District. Mr. Donison stated:

"1 have been speaking to Pan! Lepwe. He has suggested that surely there are contigtmis ridings that we could include on the list -for instance what about all ihe Montreal South Shore? None of those campaigns can or will spend very much- and could make their caps available. "

1 98, Mr. Kumpf responded:

"The Montreal South Shore could be at/ribu/ed but we are plannedforpurchase of Montreal English radio and, as I told Susan, this will be ro~tghly +$50Ksoyou only need 2 or so ridingsfiom Montreal area in total. With no TVplanned I cannot add those riding S 's to the television rosier as they will not be seen except on RDS and we need a solid viewing % to make this attribution legitimate. *'

199. I know Mr. Paul Lepsoe to be legal counsel to the Conservative Party of Canada and to the Conservative Fund Canada. I believe "Susan" refers to Ms. Susan Kehoe, Chief Financial Officer of the Conservative Party of Canada at that time.

200. On December 19,2005, Mr. Donison wrote to several Conservative Party of Canada officials and copied Mr. Kumpf (Appendix 39), concerning a situation in which only one Quebec, candidate would benefit from a specific radio advertisement. He stated:

",..only the candidate in Beauce will benefit from this- it is not a case where we could simply shift the ad bvy to other bewfitiftg candidates in the same marker area ... Beauce will simply have to agree to pay for something on this radio ad."

201. I note that the candidate in the Electoral District of Beacuce, Mr. Maxime Bernier, was . issued an invoice, numbered 1 1 0 1 868-25, dated January 1,2006 in the amount of $6,277.00 - -

(Appendix 19). Mr. Bemier claimed $5,000 as an election expense fo media advertising (Appendix 6).

202. Also on December 1 9,2005 Mr. Donison wrote to some of the same persons referred to in paragraph 200 concerning participation in the media buy scheme (Appendix 39). He stated:

"... We have a commitment from Montmagny-L 'Islet but there is no candidate which makes this very problematic but we need to know the name by today; "

Mr. Donison continued:

'... There were o ftly ftro outright refusals- Beauce andBrome-Mssissquoi. We have discussed and understand Beauce but what is with Brome? Why should they be allowed to just outright reme? "

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203. A series of e-mails was exchanged January 3,2006 (Appendix 40) between Ms. Kehoe and Ms. de la Courneuve of Retail Media. Ms. de la Coumeuve advised Ms. Kehoe:

"I acc/den/uUy sent to (sic) complete file, so attached are the single invoices you requested"

204. Ms. Kehoe responded, and copied Chan Chow, whom I believe was working in the finance department at the Conservative Party of Canada:

"Thank you Linda. .. Chan these are the last of the invoices needed to prepare the bank transfer. "

205. On January 4,2006, Ms. Kehoe salt an e-mail to Ms. Dixon and Ms. de la Courneuve (Appendix 41) to advise that:

"The bank has confirmed both wire transfers sent to you via SRW'3O409lP. ... The transfers are for $5.063,511.77 the balance of the original media buy re: 32 invoices beginning with I 1 01868 for the incremental media buy of last week on invoice #l! OI/t 74. "

206. I note that a Toronto Dominion Bank Incoming Credit Advice Sheet dated January 4, 2006 (Appendix 42) indicates a payment of $5,0633 1 1.77, less a handling fee of $10.00, in favour of Retail Media. The ordering customer is stated to be the Conservative Party of Canada. Payment details recorded on the Advice Sheet indicate that the payment refers to the total of 32 invoices starting with 1 101868.

207. The campaign of Mr. Don Giis, Conservative Party of Canada candidate in the Electoral District of Cardigan ts listed in invoice 1 10 1 868- 1 (Appendix 20), dated January

- 1,2006 as having participated in (he media buy campaign for a total of $7,385.50 plus GST for a grand total of $7,902.49. I have examined the Candidate's Election Campaign Return (Appendix 43) as filed by Mr. Gillis and his official agent, Mr. Joe Koughan, as wet! as the campaign's banking records and find no record of participation in the media buy. From the review of records relating to the Gdlis campaign, I note that this candidate spent 95.44% of his expenses on advertising ($59,895 out of $62,756.67). The filing shows that Mr. Gillis' campaign was only $358.08 short of the electoral expenses spending limit.

208. I have reviewed a series of e-mails (Appendix 44) between Mr. Michael Donison, then Executive Director of the Conservative Party of Canada, and Mr. Dennis King whom I believe to be a Conservative Party of Canada organizer in Atlantic Canada because the Conservative Party of Canada web site indicates that Mr. King was elected as the Prince Edward Island representative to the Conservative Party of Canada's National Council at the March 2005 National Convention.

209. On January 4, 2006, Mr. Donison advised Mr. King that campaigns in two Prince Edward Island Electoral Districts, Mdpeque and Cardigan, had not yet faxed in their forms.

Page 49


I believe the foms referred to are the wire transfer instructions to transfer media buy funds from the campaign account back to the Conservative Fund Canada.

2 10. Mr. King advised that both of these campaigns sensed victory and no longer wished to participate in the media buy because they intended to spend close to their election limits. Mr. Donison responded that both campaigns were committed and said that if they balked, they may:

"...be hit with this as an election expense. You better read them the riot act on this. "

2 1 1. On January 5,2006 Mr. King advised Mr. Donison that Maipeque "is on board' but not Cardigan (Mr. Gillis' campaign). Mr. King asked if the media buy funds could be switched from Cardigan to the campaign in the Electoral District of Egmont instead. Mr. Donison agreed with this strategy and told Mr. King:

"Ifyou can get Egmont instead that should work".

He went on to tell Mr. King:

"...the amounts for each of the two PEI ridings are $7902.49 each "

2 12. I have examined the return filed by the candidate of the Egmont Electoral District and found no record of an "in-and-out" transaction. Given that Mr. GilIis's campaign was billed for the advertising as noted at paragraph 207 but did not participate in the media buy, I do not know who paid the invoice.

213. Each of the 15 candidates (paragraphs 38 - 46) provided, as part of their filing of - additional documentation, CDs of the television and/or radio media buy advertising, which

affected their electoral districts. I note, in reviewing one such ad (Appendix 91, that the official agent for Mr. Don Gillis, the Conservative Party of Canada candidate for the electoral district of Cardigan (Prince Edward Island), is mentioned in the %tag line" of the ad (the information at the end of an ad which indicates who authorized, and presumably paid for, the advertising) as having authorized media buy advertising, Mr. Gillis is not one of the 67 candidates identified as being pari of die media buy. The Gillis campaign did not report to Elections Canada having financially participated in such advertising. Several official agents of a number of other campaigns in Atlantic Canada, which did report having financially participated in the media buy scheme, are also listed in the "tag line" as having authorized the ad. Appendix 9 is an image taken from a CD mentioned earlier in this paragraph which was filed (Appendix 8) in response to the Chief Electoral Officer's request for additional information (Appendix 7) by the Khosia campaign (The Conservative Party of Canada candidate in the Electoral District of Halifax West) with Elections Canada pertaining to media buy advertising in Atlantic Canada. The "tag line" lists a number of Official Agents, including the Official Agent for the Cardigan campaign* as having authorized the advertising.

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214. The e-rnail from Mr. Kumpf to Mr. Mieie dated December 30,2005. (Appendix 45) indicates that radio advertising for the Conservative Party' of Canada and candidates in English Canada began on January 2,2006.

2 1 5. E-mails were subsequently exchanged (Appendix 46) between Mr. Kumpf and A h a Comazzetto, the assistant to the Conservative Member of Parliament for the electoral district of Desnethe-Mssinippi-Churchill River. The e-mails indicate that the local campaign appeared to have no knowledge of the advertising talcing place in the district, although the electoral district is recorded as having participated in the media buy.

2 16. On January 4,2006 Mr. Kumpf wrote to Ms. Comazzetto, with a copy to Mr. Donison and stated:

"As per your request via the e-mail to Mike, please be informed that the radio stationspurchased for the media campaign in your area are... " Mr. KumKfthen listed two radio stations, one in Meadow Lake, Saskatchewan and the other in La Range, Saskatchewan.

2 1 7. Ms. Comazzetto then asked Mr. Kumpf:

"What is the text of the ads?"

218. Mr. Kumpf then forwarded Ms. Comazzetto's e-mail to Ms. Nicole Polivka at Yield Communications and stated:

"Idon 't blow whatyour release policy on this is but the following is a requestjrom the assistant to the ~onservative JWfor this partical& riding enquiring as to what the creative is... . . - - -

I had supplied her with the radio stations the ad is playing on as per request from Mike Donison. I'

219. Based on my review of documentation provided pursuant to the Production Order, I believe Yield Communications is one of the companies which created the advertising for the campaign. I believe that the word "creative" above refers to the text of the ads, including the "tag lines" which indicate who has approved of and paid for the advertising.

220. On January 5,2006 Mr. Donison exchanged correspondence with Mr. Bruce Hallsor, a lawyer in Victoria British Columbia who appears to be connected to the media buy process, with respect to having the wire transfer instruction forms faxed by the campaigns to the Conservative Fund Canada. The following e-mails were exchanged (Appendix 47):

" ... Nanaimo Cowichan i sending i me for $4,000 only. They have heard the first

Page 5 1


ad running. and it is an anti libeul ad and they are really pised of, since the liberals are not a factor i any of the three idings in their area. " (sic)

22 1 . Mr. Donison forwarded the e-mail to Mr. Kumpf and copied Mr. Patrick Muttart and Mr. MieIe. Mr. Muttart responded:

"The Liberals continue to poll well on Vancouver Island regardless of what we are seeing on the ground. We do have an anti-NDP ad for television that is being finalized. "

222. I believe Mr. Muttart is the Deputy Chief of Staff to the Prime Minister for Strategic Planning and a senior Conservative Party of Canada strategist. He is identified as such in various media articles I have reviewed on the internet, such as

OBSERVATIONS

223. I had never met any of the executives of Retail Media prior to our meeting, nor had I previously met any of the candidates or official agents interviewed by me or by my colleagues. In considering the reliability of the information provided, however, I have no reason to doubt the truthfulness of any of the interviewees. As noted at paragraph 64,I have confirmed that Mr. Kumpf is listed as the Authorized Agent for the purchase of broadcasting time for the Conservative party of Canada. In terms of assessing the reliability of information provided by other persons interviewed I have, to the extent possible, aligned the information provided by them with available documentation. I know pereonally each of the Assistant Chief Investigators who conducted interviews referred to in this my Information, and I consider each of these Assistant Chief Investigators to be reliable and to have represented the nature of the interviews conducted by them truthfully.

224. In her letter (see paragraph 49 and Appendix 1 1) dated January 25,2006 to Ms. Manon Hamel, Acting Director, Political Financing and Audit Directorate at Elections Canada; Ms. Aim O'Grady, Chief Financial Officer of the Conservative Fund Canada stated that costs of media advertising were calculated by Retail Media for individual campaigns "basedon the advertisingperformed and invoiced to the Conservative Candidates at the Conservative Party national office". She goes on to say that time is of the essence in media buys, advertising time must be paid for in advance and that the Conservative Fund Canada facilitated the payment to Retail Media on behalf of the participating candidates to pay for "their respective media buy and the associated allocation ofproduction costs. These are the invoices that Elections Canada is being presented by the candidates 'official agents to support their media buy during the writ."

225. I note that Ms. O'Grady mentions "allocation of production costs". Only the participating Quebec campaigns filed invoices or documentation with Elections Canada pertaining to campaigns for which production costs were allocated. No such allocation has

Page 52


been filed by participating campaigns outside Quebec, each of which received a media buy invoice from the Conservative Fund Canada (Appendices 8, 1 9 and paragraphs 93. 1 36, 142.146, 148,224,225.227).

226. Ms. Susan J. Kehoe, the current Interim Executive Director of the Conservative Party of Canada, in her letter to the Chief Electoral Officer (see paragraph 50 and Appendix 12) stated that candidates were invited to participate in the media buy, and aff irms that the media buy supplier (Retail Media) determined the group market area and what combination of TV and radio in each market was best to target the audience for each participating candidate. . .

227. The statements in paragraphs 224 - 226 arc at odds with the available evidence because:

a. I was told by Mr. Andrew Kumpf of Retail Media that no contract exists between Retail Media and any candidate (paragraph 67). This is supported by Me. Donison's letter (paragraph 481, which stated that no contract exists between Retail Media and any candidate;

b. I was told by Mr. Kumpf and by Ms. Dixon that Retail Media conducted its billing of the Conservative Party of Canada by calculating the total of advertising costs for the time purchased and provided this amount as an invoice to the Conservative Fund Canada. The allocation of funds on an electoral district basis was predicated on instructions received by Retail Media from Ms. Susan Kehoe or other officials of the Conservative Party of Canada or the Conservative Fund Canada. I believe that any analysis or assessment conducted by Retail Media of amounts to be .allocated to advertising for any given candidate was intended to place advertising funds into various campaigns based on the amount of available space between the amount spent and the election spending cap of each participating campaign to achieve a maximum amount spent. I note as well the apparent disparity in allocation of advertising costs among electoral districts which are contiguous or in the same geographic region (paragraph 74);

c. I was told by Mr. Kumpf that Retell Media does not become involved in the production of advertising; the sole function of Retail Media is to purchase advertising air time (paragraph 65). This is contrary to Ms. O'Grady's statement that part of the cost allocated to campaigns was for production costs (Appendix 1 1 and paragraph 49);

d. I was told by Ms. Dixon that the Retail Media invoice shown to her as representative of the 15 invoices filed with Elections Canada does not resemble the invoices provided to the Conservative Fund Canada by Retail Media (Appendix 19,20 and paragraph 75). Ms. U'Grady confirms that these invoices are intended to be relied on as emanating from Retail Media when she states in her letter that:

Page 53


" These are the invoices that Elections Canada is being presented by the candidates ' official agents to support their media buy during the wit.'* (paragraph 49);

e. E-mail traffic mentioned in paragraphs 170 - 222 and interviews of candidates and official agents (paragraphs 8 1 - 163) do not support these statements.

228. As I have noted, documentation provided by Retail Media via the Production Order indicates that Retail Media did create an invoice (#I 101 868- 1 at Appendix 20) which contains a listing of 41 electoral districts outside Quebec involved in the media buy scheme. The invoice bearing Retail Media letterhead which was shown to Ms. Dixon (paragraph 75 and Appendix 23) appears to be similar to invoice 1 101 868- 1 as created by Retail Media, however the invoice shown to Ms. Dixon (Appendix 23) shows only that candidate's amount, i.e. information pertaining to the other 40 candidates which appears on the version of the invoice at Appendix 20, has been blocked out Based on the comments of Ms. Dixon of Retail Media (paragraph 751, I believe this alteration was carried out by the Conservative Fund Canada or the Conservative Party of Canada because it did riot appear to conform to the appearance of the invoices issued by Retail Media to the Conservative Party of Canada or Conservative Fund Canada (Appendix 19 and paragraph 169) with respect to the purchase of media airtime during the 39' federal general election.

229. The documentation received from Retail Media supports the contentions that:

a. The media buy plan as initially conceived and subsequently adjusted for election advertising was conceived by the Conservative Party of Canada;

b. Senior officials of the Conservative Party of Canada and / or the Conservative Fund Canada consciously chose not to seek a ruling from the Broadcasting

- - Arbitrator prior to "switching" advertising expenses to the electoral districts (see paragraph "d." below);

c. The media buy plan for election advertising was contracted for with Retail Media and put in place before any of the Conservative Party of Canada candidates were contacted to participate;

d. The media buy was known toand &plemented by the most senior officials of the Conservative Party of Canada and the Conservative Fund Canada. For example, Mr. Gerstein, the Chair of the Conservative Fund Canada told Mr. Campbell, the President and CEO of the media bi - ip tT because t Conservative Party of Canada's eletflBffBBHHSBlllll ilietTWreaeHl it m

the Conservative Party of Canada were also aware of the media buy planning; e. Efforts were made to re-distribute media buy funds to other electoral districts

when candidates declined to participate; f. Payments for the media buy were made by both the Conservative Party of

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Canada and the Conservative Fund Canada; g. Invoices addressed to "Official Agents for Conservative Party Candidates" were

received and paid for by the Conservative Fund Canada: h. The billing of candidates for media buy election advertising by the Conservative

Party of Canada / Conservative Fund Canada was not based on the extent of advertising saturation of an Electoral District and the benefit or support that the advertising might generate for a particular campaign. It was based on the need to distribute advertising costs to candidates with room in their election budgets to absorb such costs within the election expenses spending limit and to create the appearance that the candidates had incurred the advertising costs;

i. When candidates declined to participate in the media buy plan, other electoral districts were selected by senior Conservative Party of Canada officials to participate based on the availability of room in their election budgets to absorb additional advertising costs irrespective of benefits received from the advertising.

230. ~ursuant to 8 1 to 1 63 1 have participated in and am aware that investigators from Elections Canada have conducted a series of face-to-face interviews and telephone conversations with 14 persons directly involved in the-media buy, ranging geographically from British Columbia to Quebec (paragraphs 8 1 - 163). Interviewees stated that they had no dealings whatsoever with Retail Media, nor did they authorize anyone else to contract with Retail Media on their behalf. A number of candidates / official agents said they had discussions with or on behalf of the Conservative Party of Canada concerning:

a. Whether their campaign intended to spend to its election spendinglimit; b. Whether they wished to contribute to nati'd advertising by allowing space

remaining

in their campaign spending limit to be used by the Conservative Fund Canada to deposit -

funds into their campaign accounts, which would almost immediately be transferred back to the Conservative Fund Canada (resulting in a 60% windfall reimbursement to the c = w w - .

23 1. I have noted a consistent pattern created by the Conservative Party of Canada or the Conservative Fund Canada to deposit funds into the accounts of various campaigns, only to have the same or similar amounts transferred, always under the control of the Conservative Party of Canada or the Conservative Fund Canada, back to the Conservative Fund Canada, the chief agent of the Conservative Party of Canada.

232. My review of the Candidate's Electoral Campaign Return forms as provided by Elections Canada for the 67 campaigns involved indicates that it was only the 14 campaigns from which additional information was requested by the Chief Electoral Officer (plus the unsolicited 15& candidate) which filed with Elections Canada, in response to those requests, invoices on Retail Media letterhead (paragraphs 37 - 46). Executives of Retail Media did not recognize the one invoice shown to them (as representative of the 1 5 invoices) as

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coming from their company (paragraph 75). In all 15 cases referred to in paragraphs 37 - 46 the retail media invoices were addressed to "The Official Agents for Conservative Party Candidates, # 1 720 - 130 Albert St., Ottawa" (Appendix 8,19). All of the 67 participating campaigns filed invoices from the Conservative Fund Canada.

REASONABLE BELIEFS

233. Based on the entirety of the information above, I have reasonable grounds to believe that:

a. Through its chief financial agent (the Conservative Fund Canada) the Conservative Party of Canada established the 'media buy' program to allow the Conservative Party of Canada to enhance its election advertising spending and pass the expense to candidates with spending room between their anticipated election expenses and their election spending limit; ,

b. None of the regional media buy advertising time was a cost incurred by the candidates or their official agents;

d. The Conservative Party of Canada exceeded its election expense spending limit for the 39"' federal general election;

'the 67 candidates of the Conservative Party of Canada who participated in he media buy program claimed expenses for advertising that they did not incur -

(two candidates received less than 1 0% of the vote and were ineligible to claim). Each of the claims was supported by an invoice provided to die candidate by the Conservative Fund

1 ne purpose of the transfers of funds from the Conservative Fund Canada to the candidates and back again was to give the appearance that the expenses had been incurred by the Conservative Party of Canada on behalf of its candidates and paid for by the campaign involved;

No contract existed between Retail Media and any official agent or candidate in which any official agent or candidate incurred an expense of purchasing advertising time from Retail Media for the 3 9* federal general election; There is no evidence that any of the involved Official Agents authorized the Conservative Party of Canada or the Conservative Fund Canada, in writing to incur candidate's electoral campaign expenses on behalf of their campaign. (as

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required by subsection 438(5) of the Canada Elections Act);

i. Retail Media was never. in contact with the candidates or their oficial agents, but only had dealings with Conservative Party of Canada or Conservative Fund Canada personnel;

A

j. The money used to make payments from the campaigns to the Conservative Fund Canada was provided by the Conservative Fund Canada to the participating campaign accounts and the official agents sad candidates exercised no control over the funds;

k. It is the Conservative Party of Canada and/or the Conservative Fund Canada, rather than the participating candidates or their official agents, which incurred the media buy expense, accepted the legal obligation to be indebted to Retail Media and paid the media buy expense. The payments by the campaigns for the media buys were, pursuant to instructions from the Conservative Fund Canada, directed to the Conservative Fund Canada, not Retail Media. Retail Media insisted on being paid prior to any broadcasts of advertising;

1. The statutory election expense spending limit of the Conservative Party of' Canada for the 39"' federal general election was $1 8,278,278.64 (Appendix 2). The Conservative Party of Canada spent $1 8,0 1 9,179.28, leaving it $259,099.36 short of its maximum election expenses spending limit (Appendix 13). Had the Conservative Party of Canada included the amount of $1,375,45 1.9 1 (Appendix 6) that it spent for the 'media buy' as a Party election expense, it would have exceeded its spending limit by $1,116,352.55. It also improperly generated a potential reimbursement of 60% of the media buy related election expenses (obtainable by candidates who received at least 10% of the votes in the electoral district contested, as per subsection 464(l )(b) of the Canada Elections Act) declared by the 65 of the 67 participating campaigns (two candidates did not receive the mandatmy 10% of the electoral vote to qualify for reimbursement). These media buy expenses were not incurred by the participating campaigns;

m. $1,3 75,45 1.9 1 was subsequently allocated according to available spending room, by or on behalf of the Conservative Party of Canada or the Conservative Fund Canada, to the 67 various participating candidate's campaigns;

n. Funds were transferred by or on behalf of the Conservative Party of Canada or the Conservative Fund Canada to the campaign bank accounts of the 67 various participating candidates and within a very short span of time these funds or funds closely approximating the amounts deposited were transferred back out of those accounts. This was done under the direction of the Conservative Fund Canada and the funds were returned to the account of the Conservative Fund Canada (paragraphs 57 - 63);

o. Media advertising costs were incurred by the Conservative Party of Canada or

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the Conservative Fund Canada and not the participating candidates;

p. The amounts allocated by or on behalf of the Conservative Party of Canada to the 67 various participating candidate's campaigns were allocated according to the remaining amount of available spending room for expenses within the spending limits;

q. The Conservative Party of Canada and the Conservative Fund Canada maintain records of the corporate transactions pertinent to this investigation and there are reasonable grounds to believe that these records are available at or accessible through the place to be searched and will afford evidence respecting the commission of the offences named in this Information;

r. The offences listed above under the heading "Offences'' have beebeen committed.

AND FURTHER:

234. No other investigator has attempted to obtain and been refused any other Warrants to Search orjudicial authorizations with respect to this investigation. I have noted above that a production order was obtained and served on Retail Media on December 14,2007 with respect to this investigation.

AND FURTHER:

235. In the event that a claim of solicitor - client privilege arises with respect to things to be examined, copied or seized during the search, I intend to deal with the claim in a manner akin to that indicated in subsection 488.1 of the Criminal Code, altered as circumstances and reason require.

236. 1 believe that the head office of the Conservative Party of Canada is located at 130 Albert St, Suite 1204, Ottawa, Ontario. This is the address registered with Elections Canada (Appendix I ) and is the address listed on the web site of the Conservative Party of Canada as its Headquarters. The Ottawa, Ontario telephone book lists 130 Albert Street as the address of the Conservative Party of Canada (no suite number is specified). The address is the same as the return address indicated in Ms. O'Grady's letter to the Chief Electoral Officer (paragraph 49). Assistant Chief Investigator R. Lincourt visited the address on March 14,2008 and contmed that the Conservative Party of Canada maintains offices at that location.

237. IbelievetheConservativePartyofCanadaalsomaintainsanofficeat 130AlbertStreet, Suite 1 720, Ottawa, Ontario. Assistant Chief Investigator R. Lincourt advised me that on

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the door of 130 Albert Street, Suite 1720, Ottawa, Ontario is a sign in both official languages indicating that any deliveries should be taken to Suite 1204 at that address. In addition. on that same date I called the main number for the Conservative Party of Canada and the female receptionist I s ke with confirmed that the Conservative Party of Canada sÂ maintains an office on the 17 floor at 130 Albert Street, Ottawa, Ontario. She did not specify Suite 1720, however I believe this address to be correct given that the sign on the door of Suite 1720 referred to in this paragraph directs deliveries to Suite 1204, which I know to be occupied by the Conservative Party of Canada (paragraph 235).

238. -1 have reviewed the registrations filed by the Conservative Party of Canada with Elections Canada for the years 2005 to 2007 inclusive. The address listed for the Conservative Party of Canada and the Conservative Fund Canada until the February 2007 registration is 130 Albert Street, Suite 1720, Ottawa, Ontario. As noted above (paragraph 45) this is the address (130 Albert Street, Suite 1720) to which Retail Media sent its invoices addressed to "The Official Agents for Conservative Party Candidates". Assistant Chief Investigator Lincourf advised me that to reach Suite 1720 he exited the elevator on the 1 7th floor at 130 Albert Street, turned left and followed the hall to a comer where he turned left again and followed the hall to the last door where a. sign indicated Suite 1720.

239. The building is a multi-storey office tower. I have examined the occupant registry located in the lobby of the building and note that the building houses various businesses, embassies and other organizations. The search is to be restricted to only those parts of the building occupied or under the control of the Conservative Party of Canada or the Conservative Fund Canada

GROUNDS TO BELIEVE THAT THE THINGS TO BE SEARCHED FOR ARE . CURRENTLY AT THE LOCATION TO BE SEARCHED

- - - -- -

240. As noted throughout the body of this Information, a considerable amount of documentation has been created and filed with Elections Canada by candidates and by the Conservative Party of Canada as required by the Canada Elections Act. In addition, documents received from Retail Media via a production order demonstrate that numerous e- mails and other means of correspondence have emanated from and been received by the head office of the Conservative Party of Canada.

241. Letters and e-mails emanating from senior officials at the head office of the Conservative Party of Canada, indicate tile address of the places to be searched as the location at which they maintain office space. 1 believe that relevant documents and data are present at that location.

242. I am aware that persons named in this Information have made considerable use of e-mail as a means of exchanging information relevant to my investigation. In addition, I be1 ieve that the records and other documents I have referred to in this Information have been created using computers and that although I believe they are also stored in paper format,

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they are stored either on computer systems present at or available to computers located at the place to be searched.

243. I believe I will be required to use or cause to be used any computer system at the place to be searched in order to reproduce or copy the data contained in or available to those systems.

244. Given that the place to be searched is the head office of the Conservative Party of Canada and the Conservative Fund Canada, I believe it is reasonable to conclude that the documents, records and data comprising the things to be searched for are at the place to be searched and will be recovered.

GROUNDS TO BELIEVE THE THINGS TO BE SEARCHED FOR WILL AFFORD EVIDENCE OF THE OFFENCES NAMED

245, Correspondence and e-mails between or among representatives of the Conservatiw Party of Canada (including candidates, officicd agents and regional organizers), the Conservative Fund Canada, Retail Media and its related companies and production companies including Yield or Yield Integrated, USJO Corporation. Pirate Toronto, Look Communication Inc, Republik Publicite + Design Inv, Howling Dog Productions Ltd with respect to the creation, broadcast, fiwinelal arrangements or allocation of funds concerning media advertising for or on behalfof the Conservative Party of Canada during the 3p federal election:

a. I believe this documentation will provide evidence of the planning, process and timeline through which the media buy .was created and carried out.

246. Invoices, purchase authorizations, work orders, receipts, accounts, records of - - payment, transfers ofpayment, directives, contracts, instructions, minutes of meetings,

records of decisions authorizing work or reflecting negotiations, meetings or dtscvssions concerning the production or purehase of media advertising by or on behalf of the Conservative Fund Canada, the Conservative Party of Canada and Conservative f arty of Canada candidates or their official agents for the 39* federal general election.

a. I believe these records wit! afford evidence of payments, flow of funds, timing, contractual obligations, directions / instructions, and evidence of how and by whom the advertising costs were incurred, b. I believe these records will also provide evidence that the advertising was national in scope, rather than advertising promoting a specific candidate.

247. Advertisement scripts and recordings of media advertising pertaining to the Conservative Party of Canada during the 39th federal general election.

a.\ believe these records will afford evidence that the advertising was actually created and afford evidence of the claimed "tag line". i.e. the person or

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entity identified in the ad as having approved and paid for it.

248. Time schedules, details of broadcast coverage, date and time of broadcast of advertisements pertaining to the Conservative Party of Canada during the 39* federal general election.

a. I believe these records will afford evidence that the advertising was actually broadcast, the timing of the broadcasts and the geographic areas covered by the advertising.

. .

249. Records indicating electoral districts, locations or geographic areas which benefited from the above broadcast advertisements and any analysis or allocation offunding relating thereto.

a. I believe these records will afford evidence of the pattern of the advertising broadcast and assist in determining the degree of benefit for a given candidate in a geographic location or region and the process and rationale through which amounts attributable to media advertising were allocated to specific candidates.

AND FURTHER:

250. Due to the nature of the searches to be conducted, it is my intention to seek assistance from peace officers of the Royal Canadian Mounted Police (RCMP) in carrying out this search. I will require assistance from the RCMP at the place to be searched to conduct:

a. The search of the offices of the Conservative Party of Canada and the Conservative Fund Canada; b. The search of the computer systems used by the Conservative Party of Canada - -

and the Conservative Fund Canada; c. Copying of data on the computer systems used by or available to the computers at the place to be searched; d. Analysis of the data copied; e. Conducting video taping of the place to be searched at various times during the search, including:

i.Video taping the place to be ,searched when control of the premises is acquired, prior to entry into the place by the majority of the persons to participate in the search;

H.Video taping the place to be searched when the grid mapping is completed prior to the commencement of the actual search process in order to be able to identify the numbering or identifying features associated with various rooms, offices, etc and associate them with any exhi bits seized;

iii.Video taping the place to be searched upon completion of the search

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immediately prior to relinquishing control of the premises.

25 1. I require this assistance because:

a. I anticipate that the search will necessitate a detailed review of a large volume of files and records: b. In addition to myself, only three other investigators from the Office of the Commissioner of Canada Elections are available to assist me; c. I believe additional assistance is required to conduct the search in a reasonable amount of time; d. I do not, nor does anyone else in the Office of the Commissioner of Canada Elections, possess the specific skills necessary to access or search computer systems or to analyse the data once it has been copied.

252. With respect tothe forensic imaging of computers or computer related equipment at the place to be searched, I believe it to be true that:

a. The computer techmcian(s) to be involved has experience with computer. systems, including data storage and retrieval, and has been involved in numerous searches conducted by "A" Division Integrated Technological Crime Unit, involving computerized records and documents;

b. The computer technician(s) to be involved has experience in the planning and coordinating of computer search and seizures and also provides technical advise, guidance and training to investigators specialized in computer search and evidence recove&

c. The documentation and data as described in paragraph 7c of the "Things to be searched for", the computer programs as describedin paragraph 7b of the 'Things to be searched for" and the computer system 4 computer component as described in paragraph 7a of the "Things to be searched for" are required to access, make intelligible, reproduce, transfer, communicate or receive data contained in data storage media described in paragraph 6 of 'Things to be searched for";

d. RCMP protocol is that the data storage media is examined by or under the supervision of an informatics investigator of the RCMP, who has been trained in the forensic analysis of computer systems and electronic data retrieval;

e. RCMP Integrated Technological Crime investigators take appropriate measures when seizing items as described under paragraphs 6 to 8 of "Things to be searched for'' to conduct a forensic recovery, examination and disclosure of data. The investigator considers the facts and circumstances, including the properties relating to the data and media, technical and accessing limitations to determine which of the items described in paragraphs 6 to 8 of "Things to be

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searched for'* are required in the circumstance;

f. Depending on the facts and circumstances, the computer system and computer components may be seized because of technological constraints and barriers. for example:

D a t a storage media may contain extraordinary amounts of data, which includes data that may be mislabelled, encrypted, stored in hidden directories, deleted or embedded in unused space. This data may require a specific environment, in order to be accessed or made intelligible, &luding the usage or the presence of a specific computer system, computer component or computer program. To search and process all this information at a search location may not be feasible from a technical aspect. Therefore, the recovery of data described in paragraph 6 of the "Things to be searched for" may require a meticulous analysis by an informatics investigator in a controlled environment;

g. If a computer system is seized as described in sub-paragraph f above, the RCMP conducts the following procedures:

i.The computer system is removed from the premises, secured and transported to the RCMP secure processing centre or other secured location;

iiThe original data storage media is copied, removed from the seized computer system and placed in the evidence room of the RCMP;

h On March 17, 2008, Staff Sergeant John Keuper of the RCMP "A" Division Integrated Technological Crime Unit advised the Office of the Commissioner of Canada Elections that he is a member of the Integrated Technological Crime Unit, which investigates computer crime and specialh in the search, seizure and analysis of computer systems and as such he is aware of the idonnation contained in paragraphs 25 1 (I to n) and paragraph 252:

Sta f f Sergeant Keuper said that members of die Integrated Technological Crime Unit could forensically analyze a computer system and retrieve a wide variety of information from it This information includes, but is not limited to:

1 .. Copies of web pages created on the computer or downloaded from the Internet;

2.. Copies of electronically created documents (e.g. letters and journals);

3.-Copies of emails received and sent from the computer system;

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4.. Records of instant messaging and chat conversations (e-g. ICQ, IRC, MSN Messenger);

i. The forensic analysis can retrieve data that may be hidden or previously deleted, including prior drafts of web pages, documents and e-mails. Further, it may assist in identifying when a web page or document was created or modified, when an e-mail was sent br received, or when a chat conversation occurred:

j . Deleted files or file fragments may exist for an extended period of time on the computer' system due to the design of most common computer operating systems. Files that have been deleted by the user arc not physically erased. Rather, the operating system merely marks the area of the storage disk where the file was stored as availabli to be used in the future. If that space is not re- used prior to seizure, forensic programs can retrieve these deleted files or file fragments;

k. Typically, the data sought is found on the hard disk drive@) contained within the seized computer system -the primary storage device of a personal or business computer. The Integrated Technological Crime Unit will make an exact copy, called an "image", of the entire hard disk drive, and conduct all subsequent forensic analysis on that drive. During the acquisition process and the subsequent forensic analysis, members of the Integrated Technological Crhe Unit use specialized t-ist-d-ivzi"e and ioftwsi-e to ensure that the original data remains intact and is not modified at any stage of the investigation. The original hard disk drive is re-installed in the computer and dealt with through s.490 of the Criminal Code;

1. The analysis will include searching the entire hard disk drive and any seized storage media for the elements important to the investigation. Further, the analysis will include examining any e-mail or other forms of correspondence showing that the subject canvassed assistance from others;

m. There are a wide variety of techniques available to even the novice computer user to resist the casual examination of data saved on a hard disk drive. These include but are not limited to:

- Password protection - Encryption - Renaming files - Steganography (hiding files inside other files);

n. Time, experience and computer resources are required to defeat these and other techniques. As such, it is necessary to examine the entire physical disk to complete a comprehensive search for electronic evidence.

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253. Members of the RCMP " A Division Integrated Technological Crime Unit will be present at the search, and will assess, based on the aforementioned reasoning, whether it is *essay to seize peripherals or software. Items that are not required will not be seized.

AND FURTHER:

ASSISTANCE ORDERS

254. My grounds to believe it is necessaiy to order Mr. Gilles Robillard, CA, pursuant to section 487.02 of the Criminal Code, to provide whatever assistance may reasonably be considered necessary to give effect to the warrant are as follows:

a. The things to be searched for include accounting and financial records including invoices, receipts, accounts, contracts, and other related documents. Neither I nor the other investigators who wiU be present have a background in accounting or finance and as a result we are unable to precisely identify and seize all of the relevant documentation;

b. To address this deficiency, I require the services of a person having the necessary accounting and finance background and skills who will be present during the search in order to:

i Assist in the search of the place with respect toaccounting and financial m&, such as h c i d data, entries, payen& or tramfen of money, payments of accounts, payment schedules and other similar records, whether recorded on paper or as data stored on or available to a computer;

ii.EnabIe me to consult on a real-time basis as the search proceeds to ensure that all relevant records are identified.

255. Mr. RobiUard is a Chartered Accountant and a partner with the firm RSM Richter in Montreal, Quebec. Mr. Robillard is experienced in conducting forensic accounting engagements and has been retained by Elections Canada to assist by objectively analysing financial data obtained during this investigation.

256. I believe an Assistance Order is necessary to allow Mr. Robillard to be present during the search because his accounting skills will assist investigators to focus on the relevant aspects ofthe search. He will assist by identifying and assessing the financial or accounting nature of the "Things to be searched for". In addition, he will provide consultative insight into the evidentiary nature of the things of a financial or accounting nature in the place to be searched and wilt provide investigators with information pertaining to other related and relevant evidence which may also be available ator through the place to be searched as the warrant is executed.

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DATA ADMINISTRATOR

257. My grounds to believe it is necessary to order the person responsible for data administration at the place to be searched, pursuant to section 487.02 of the Criminal Code, to provide whatever assistance may reasonably be considered necessary to give effect to the warrant are as follows:

a. The identity of the person responsible for data administration at the location to be searched is unknown to me at this time;

. -

b. As indicated elsewhere in this Information, I have reasonable grounds to believe that many of the things I seek pursuant to this warrant relate to records produced by computer systems. I am advised by Staff Sergeant John Keuper of the RCMP "A" Division Integrated Technological Crime Unit, that upon execution of the search warrant assistance will be required from the person responsible or in control of the administration of the data system or systems at the place to be searched to identify and provide access to computers and /or servers available at or accessible to the computers at the place to be searched, Such assistance will allow the search for electronic data to be more focussed and reduce the time necessary to conduct the search.

CONDITIONS

It is requested that the search warrant grant authorization to enter the place to be searched between ROO o'clock AM on April ___, 2008 and 6:00 o'dock PM on April

,2008, and that the warrant continue hi force for a period of 72 hours from the time of entry in to the place.

The search will be conducted by day. During the period of the validity of the warrant, I will ensure that during night hours adequate personnel are posted to maintain security at the place t o be searched in order to preserve evidence and protect the integrity of the premises,

GROUNDS FOR SEALING ORDER

I believe the disclosure at this time of the Search Warrant, this Information to Obtain a Search Warrant and the material filed in support of this application, would subvert the ends of justice by compromising the nature and extent of an ongoing investigation. The investigation is proceeding but a considerable amount of work remains to be completed, including interviews of numerous persons of interest to the investigation. I believe that should the information contained in my Information become public knowledge, the ability to cany out the remainder of the investigation would be compromised because:

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1 . The outline of the investigation and the evidence obtained to date would be known to potential interviewees; and

2. I believe such knowledge would tend to have a chilling effect on cooperation of potential witnesses and could allow interviewees to tailor their evidence to achieve a desired result.

As a consequence I am requesting an order denying access to and the disclosure of any information relating to the warrant and the documentation filed in support of this application for a period of three months from the date of the execution of the warrant, for the following reasons: . ,

1. To provide time to conduct a review of the things seized and arrange and conduct interview's;

2. To avoid compromising the nature and extent of the ongoing investigation, and;

3. I believe that the ends of justice would be subverted by the disclosure of the information. In seeking this order I rely upon onthe authority of section 487.3(l) of the Criminal Code.

WHEREFORE the Informant prays that a search warrant may be granted to search the said location for the said things.

Sworn before me this W day of A v A.D. 2008

at Toronto, Ontario J

6- for Oaths in and for the . - . . Province of Ontario)

4 - Wk \kt̂ .

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Documents

Conservative Search Warrant Request