The Halifax Herald Limited , Thursday, May 13, 2004

MacKay's financial secret safe with Harper

No conflict, party leader says

by Stephen Maher

OTTAWA - Stephen Harper says he knows who paid off Peter MacKay's debt from the Progressive Conservative leadership campaign and he doesn't believe Mr. MacKay is in a conflict of interest.

"I have spoken to Peter MacKay about this," the federal Conservative leader said Wednesday. "He's told me. Peter and I have discussed it on a couple of occasions. The debts that he's told me about were never nearly as high as some of the things that have been reported. And he's also told me how those were resolved."

Mr. MacKay, the Tory MP for Pictou-Antigonish-Guysborough, told this newspaper's editorial board in December that he had decided not to run for the leadership of the new, merged Conservative party, partly because he had personal debts of nearly $500,000 left over from his successful bid for the leadership of the old PC party last May.

Mr. MacKay said last week in Ottawa that family and friends helped him pay off the debt but that it was never as big as had been reported. But he wouldn't reveal who gave him money, or how much.

Mr. Harper said he believes everything is above-board.

"I'm satisfied with his explanations," he said. "I've said to Peter and other members of caucus, when we form a government and people ask to sit in cabinet, there will be appropriate checks on people to ensure they don't have any conflict of interest problems. But certainly the information I have wouldn't suggest that."

Democracy Watch, a group that pushes for greater openness in politics, said last week that Mr. MacKay should reveal who gave him the money.

"He will have no leg to stand on, if he is an MP after the election, to criticize the Liberals for hiding anything," said Duff Conacher, the group's co-ordinator.

"The public has a right to know what goes in and out of MPs' bank accounts in terms of gifts and donations."

During question period on Tuesday, Treasury Board president Reg Alcock took Mr. MacKay to task for keeping the names of the donors secret.

"I would ask the member why is he so afraid to share with Canadians who financed his leadership campaign?" Mr. Alcock said when Mr. MacKay asked a question about the sponsorship scandal.

In Ottawa on Wednesday, Mr. MacKay said he followed all the rules.

"I've complied with all the reporting regulations," he said. "It was on our website. I followed the instructions of my chief financial officer. If people want to look at my tax receipts and my personal bank account, I don't think that's a reasonable request."

Reasonable or not, Mr. MacKay would be required to reveal all such gifts and donations if MPs vote to adopt the draft of a new ethics code requiring all MPs to disclose any gifts.

NDP MP Alexa McDonough said Mr. MacKay is being hypocritical.

"Under the new legislation, what he's doing would be completely illegal," she said Wednesday. "So I guess his ethical standard is: Do what you can get away with for as long as you can get away with it, and in the end, if the law requires it, just be glad you got away with it before you had to divulge the information."

People should not accept this kind of secrecy from an MP, she said.

"I just can't conceive of how he could think the public would be accepting of the explanation that it was only a few family and friends that paid off $500,000, and by the way, it wasn't that much after all, even though I told the public it was, and in the end it's nobody's damn business."

Mr. MacKay insisted his personal finances are private.

"It was personal debt," he said. "Do you want my mortgage? Do you want to see a property assessment? With $250 million of taxpayers' money missing, this is obviously a partisan exercise that somebody is driving, and that's all I'm willing to say about it."

Some of Mr. MacKay's former Progressive Conservative colleagues are suspicious about the donations.

Mr. MacKay won the PC leadership race after signing a deal with leadership rival David Orchard promising to keep the party from merging with the Canadian Alliance. Mr. MacKay later broke that deal and negotiated a merger of the two parties.

Mr. Orchard said the party is still holding on to $70,000 in donations he raised during his leadership campaign.

"It just appears that someone has looked after Mr. MacKay, and the Progressive Conservative Party of Canada no longer exists," he said.

Sinclair Stevens, who is leading a court battle against the PC-Alliance merger, supported Mr. MacKay's leadership bid after Scott Brison dropped out.

Mr. Stevens said large cash donations can influence a politician.

"I would think that he was essentially backed by the money element in our party, the Bay Street people," he said Wednesday.

"And what kind of surprises me is that they wouldn't have funded him right up front. But that may have been part of their lever. Once you've got your man going and he gets in debt, I'm not saying he'll go black if he wants to go white, but it's sure a big influence, eh."

Mr. Stevens, who was forced to resign as a cabinet minister in Brian Mulroney's PC government in a conflict of interest scandal, said that in his experience money usually comes with strings attached.

"For people to raise substantial money like that for your own personal account is something that I don't think you should normally do," he said. "Because people as a rule don't part with money without some consideration in mind."

No link has been shown suggesting influence in exchange for payment of Mr. MacKay's debts.

The scandal that brought down Mr. Stevens involved Magna, the giant auto parts company controlled by Belinda Stronach's father Frank. Magna gave a $2.6-million loan to Mr. Stevens' family business at the same time the company was earning millions from government contracts.

Magna gave $100,000 to Mr. MacKay's leadership campaign, which has led to speculation that the company may have helped Mr. MacKay with his debt after the race. Both Mr. MacKay and Ms. Stronach say that's not the case.

Mr. MacKay bridles at any suggestion of conflict of interest.

"Am I under some obligation to family members and friends, and what is it exactly that I'm going to do for them when I'm an opposition member?" he said.

"This suggestion from Duff Conacher that I will somehow be beholden to somebody because they helped me out with personal debt ... I thought that we wanted to encourage people to run."

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