Tuesday, October 30, 2012

Alberta Lingers in Transparent Political Darkness

Darly Kratz who along with his family members and business associates contributed $430,000 to the PC Party in the last days of the 2012 Alberta Election, and who now has two multi-million projects before the province. (Photo source: Canadian Press)
In 2012 the Foundation for Democratic Advancement (FDA) conducted two identical electoral fairness audits on Alberta's provincial electoral system and the United States federal electoral system. The United States received a near failing score of 54.5 percent, and Alberta received a near failing score of 54 percent. (50 percent is the minimum threshold for an unacceptable passing score.) Both systems border failed states, and have severe deficiencies in electoral finance and media processes. In addition, the U.S. Republicans and Democrats and Alberta politicians (from the government and elected opposition parties) either ignore or overlook the need for significant democracy reform. This point is illustrated by the facts that all Alberta parties with exception of the Alberta Party and Alberta Liberals have up to now ignored the FDA's electoral findings on Alberta, and the Alberta NDP is the only party in the 2012 AB election with a semblance of a significant democracy reform policies. In 2012 or 2008 for examples, the PC Party did have a democracy reform policy. In addition, the Republicans and Democrats are devoid of democracy reform platforms/policies, and in the four 2012 U.S. presidential debates democracy reform was not dicussed even for a momentary second.

The FDA believes that the United States is overcome by a two-party monopoly that has entrenched itself to the obvious detriment of the country, and Alberta is overcome by a party that has entrenched itself for 42 years and counting. Further, the United States and Alberta are overcome by political cultures of money which are linked to special and minority interests. The FDA Reports on the United States and Alberta show strong evidence of special and minority interests superceding the interests of Americans and Albertans as a whole.

Any kind of serious electoral reform in Alberta or in the United States faces the huge obstacle of overcoming self-interest of the current ruling political classes. When particular parties benefit from unfair electoral finance processes, what is their interest in creating fair processes, which in turn would make campaign playing field more level and these parties less competitive? The Wildrose Alliance Party is a classic example of this process, whereby in 2008 it had progressive democracy reform policies like a referendum on proportional representation, and now in 2012 with the party closer to forming government, the policy of proportional representation has been removed.

The underlying flaw in these electoral systems is that the ruling party or in the case of the United States, the majority of the U.S. Senate and Congress determine the election laws. Inherent self-interest is embedded in these systems.

In the case of Alberta, its electoral system deficiencies is showcased as example by Edmonton billionaire, Mr. Darly Katz and family members/associates making $430 thousand in contributions to the PC Party in the last days of the 2012 Alberta election. Apparently, the PC party was running low on funds as it battled the emerging Wildrose Party, and Mr. Katz has two multi-million projects currently before the province. In Alberta the contribution cap for corporations and individuals in an election year is $30,000. The total of $430 thousand stemed from $30,000 contributions by Mr. Kratz, his wife, mother, father, and business associates. There is no Alberta law against multiple contributions from family members, and Elections Alberta does not investigate the financial sources of contributions. So there is no law against Mr. Katz giving $30,000 to numerous persons to contribute on his behalf.

The issue in this example is not mutliple contributions from related sources. But an excessive contribution limit which is not reflective of Alberta's mean total income of $35,250 (Statistics Canada 2011), no law against corporations and labour unions from making contributions, and no law against individuals from giving funds to other individuals to contribute on their behalf.

If the Alberta contribution limit were capped at a reasonable level of $1000 (Quebec's contribution cap), then Mr. Kratz would have to give $1000 to 430 persons (rather than to 14 persons).

In contrast, the current Alberta Premier Redford says that there is nothing wrong with the Alberta electoral system because it is transparent. Both the U.S. federal system and Alberta system are transparent, but transparency itself does not gararntee anything. If the laws are favoring money interests, what good is transparency other than showing that they are? Transparency is neutral, and may lead to reform. Transparency itself does not necessarily mean everything is right as Premier Redford asserts. This narrow and likely self-serving reasoning is part of the problem.

By Stephen Garvey (FDA Executive Director)

2012 FDA Media Advisory on the United States

2012 FDA Electoral Fairness Report on Alberta


Alberta Opposition calls for probe into $430K donated to PCs by Daryl Katz and associates in final days of campaign

By Jen Gerson (The National Post)

Alberta’s opposition parties have called for an investigation into several donations made to the Progressive Conservative in the dying days of last spring’s election campaign, when the ruling party was running out of money and struggling to defeat the upstart Wildrose Party.

According to financial disclosure forms released this week, billionaire Daryl Katz — who is currently negotiating with the city of Edmonton to build a hockey arena downtown with the help of funds from the municipal and provincial governments — donated $30,000 to the PC party. That is the maximum amount an individual is allowed to contribute.

His company also gave away $30,000, as did his wife, mother and father. Several of Mr. Katz’s business associates also made significant donations. Altogether, the donations total $430,000, which accounts for more than a quarter of the funds collected by the PCs during the last election campaign. An anonymous source told the Globe and Mail that the cash was delivered in a single cheque and attributed to numerous individuals.

“If this is true, it is an ethical scandal of enormous proportions,” said opposition leader Danielle Smith in a heated question period in the Alberta legislature on Thursday.

Premier Alison Redford said she asked the PC party to consult with the province’s Chief Electoral Officer to ensure the governing party is in compliance.

Talks over the $450 million Oilers arena have stalled with the capital city: the project remains underfunded by $100 million, although the city expected that cash to be supplied through “other orders of government.” During April’s election campaign, Ms. Redford said her government would not be supplying direct funding, but that the city could allocate funds from its share of the Municipal Sustainability Initiative to the project.

Mr. Katz’s company, which owns the Rexall chain of pharmacies, is also seeking a casino license in connection with the arena.

“Mr. Speaker, our local billionaire just bought himself a government,” said Alberta NDP leader Brian Mason. During question period, he asked: “Will this premier admit that by accepting this donation, this government has irreparably compromised itself?”

Throughout the barrage, Ms. Redford stayed firm: she said the elections laws were working, as evidenced by the fact that the donations were disclosed at all. Further, she said the PC party would cooperate with any investigation by the independent elections officer.

“We have clearly said there will be no direct provincial government funding to any professional sports arena and that position has not changed, Mr. Speaker, in the past 18 months.”

However, the opposition continued to hammer the government, suggesting that if a law had not been broken, then the law was not strict enough.

“Given that the number $430,000 represents a quarter of the money raised by the PC party, and given that the PCs formed the government, and given that the donor has two multi-million dollar items before the government, doesn’t that make the premier just a little bit uncomfortable?” Ms. Smith asked.

Ms. Redford responded: “What makes me uncomfortable is that the leader of the opposition would allege any wrong-doing with respect to any decision that this government would make.”

Alberta has a troubled history with donations that contravene the elections acts. In recent years, the chief electoral officer has uncovered 37 incidents of illegal donations that resulted in fines. However, he has so far been unable to disclose the parties and individuals involved, citing legislation.

House leader, MLA Dave Hancock, has announced he will pass a bill that will allow the CEO to disclose more information about the offenses, but the legislation will not be retroactive.

Drew Westwater, spokesperson with Elections Alberta, said the agency would investigate any complaints about the donation, but so far had found nothing out of order.

“There’s nothing that’s not in conformity or compliance with the legislation, what’s been filed within the party,” he said.

When asked about the numerous members of the Katz family who had each donated $30,000, Mr. Westwater said that was not out of line with the law, or particularly unusual.

“We don’t look at where people get their money from to donate to parties,” he said

Outside question period, Ms. Smith called this response the “wrong answer.”

If wealthy individuals can simply parcel out donations, as Mr. Katz is alleged to have done, “why would you have limits in the first place?”

Mr. Mason said he had little faith in the electoral officer.

“I will wait and see, but I have not been so far impressed that this chief electoral officer really wants to tackle tough issues,” he said.

The Katz Group has declined to comment.

Question for Readers:

What will it take for Albertans to reclaim their province from politicans who cater to special and minority interests?

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