Hill Times (Ottawa), March 28 – April 3, 2005

Orchard wants Conservatives to pay his leadership campaign money

Conservative Party agreed to settle money issue last February
By Christopher Guly

Denied a Conservative Party membership and refused entry as a "member-observer" at the federal Conservatives' recent policy convention in Montreal, David Orchard says he's still waiting for the party to hand over more than $70,000, excluding another $10,000 in legal costs and interest, he claims are owed to him as a result of his run for his unsuccessful leadership run for the former federal Progressive Conservative Party of Canada two years ago.

Last week in Toronto, Ontario Superior Court Justice Faye McWatt dismissed a motion by the Conservative Party of Canada to have Mr. Orchard accept a settlement and sign a broad "mutual release" that would prevent him from using "the allegations in [his] statement of claim...in any subsequent or future context."

The party's release form — and the above-cited clause particularly — "may be somewhat overreaching," she said in a handwritten decision, which also dismissed Mr. Orchard's proposed release document that only precludes any future action concerning his specific money claim.

Judge McWatt ordered both sides to come up with another agreement.

Marjaleena Repo, who served as chief financial officer for Mr. Orchard's unsuccessful PC leadership campaign in 2003, said the federal Conservatives are trying to "harass David Orchard," in part because of the lawsuit he and 22 others launched last year to preserve the PC Party.

Over $55,000 in Mr. Orchard's leadership campaign donations sent to Conservative Party headquarters in December 2003 to pay for his campaign debts and a $15,000 refundable deposit for each of the seven PC leadership candidates was "snatched from him," said Ms. Repo, who serves as a senior adviser to Mr. Orchard.

"The money is David Orchard's, he was entitled to get every penny of the donations back," said Ms. Repo.

Last December, the Conservative Party of Canada agreed to settle the money issue with Mr. Orchard after he sued the party over the matter in February 2004. On Dec. 17, 2004, the Conservative Party of Canada agreed to pay Mr. Orchard $68,000 plus $1,800 interest (based on a three-per-cent rate and dating back to Dec. 21, 2003) and $7,500 in legal costs as part of a settlement after he launched a lawsuit against the party in February 2004 to recover the money he claims is owed to him.

Ms. Repo said that two PC Party audits of the Orchard campaign's books, along with assurances from both Darren Cunningham, chief financial officer of the PC Party of Canada, and Susan J. Kehoe, CFO of the Conservative Party’s fundraising arm, Conservative Fund Canada, between September 2003 and February 2004 indicated that the financial reports were "complete and in order."

However, the settlement was based on Mr. Orchard signing the party's release form, which includes "everything but the kitchen sink," said Ms. Repo in a telephone interview from Saskatoon, Sask.

According to the Conservative Party's mutual release document, Mr. Orchard would be prevented from taking legal action against the party and anyone associated with it — including its leader and deputy leader — "by reason of any case, matter or thing...[he has] ever had, now has or can, shall or may hereafter."

Ms. Repo said she believes the release is "protecting" Conservative Deputy Leader Peter MacKay (Central Nova, N.S.), who signed an agreement with Mr. Orchard, on a page in Mr. Orchard's notebook, at the 2003 PC Party leadership convention to abide by the PC's constitution and not to merge that party with the Alliance in exchange for the support of Mr. Orchard's delegated and propel Mr. MacKay to the leadership.

Mr. MacKay's office declined to comment last week specifically on this issue, but in a detailed letter to the editor in The Hill Times published on Dec. 13, Mr. MacKay wrote: "Regarding the agreement reached at the PC Leadership in 2003, there is a collective truth in the media and the public that I signed a deal which I later ignored. This is in fact false. I signed an agreement that specifically included talks with other parties. The failure to communicate the agreement is perhaps my greatest regret. In retrospect, everyone leaving the convention hall should have received a copy."

Ms. Repo told The Hill Times that broken deal "could" still result in "a court case involving breach of contract."

She said the Conservative Party's proposed legal release is an "attempt to use our money to blackmail David Orchard" and to "prevent him from acting in his own interest if he might so decide" in the future.

"They’re claiming they’re doing that to prevent mischief by David Orchard, meanwhile they are the ones who have taken the money."

Ms. Repo explained that a legal contract signed by Mr. Orchard in January 2003 when he entered the PC leadership race included a provision that all campaign donations sent to the party for processing and to issue donors a tax receipt would be returned to the candidate within "two business days."

However, in its statement of defence and counterclaim filed with the Ontario Superior Court last April, the Conservative Party argued that Mr. Orchard failed to meet his reporting and payment obligations under the rules and procedures for leadership candidates that applied to both the PC Party and now apply to the Conservative Party.

As a result, his $15,000 deposit was "forfeited" — a point cited among various issues (including donations subject to a 15-per-cent administrative fee) raised in the document filed by the party's lawyer, Arthur Hamilton of the Toronto firm Cassels Brock & Blackwell LLP.

Meanwhile, the Conservative Party spokesman Geoff Norquay added that during a leadership race, "certain expenses that benefit all candidates will be incurred on their behalf by the party and charged back to them, and any amount owing to leadership candidates are remitted back to them.

Said Mr. Norquay: "Generally, this takes some time."

However, Ms. Repo said that two PC Party audits of the Orchard campaign’s books, along with assurances from both Darren Cunningham, chief financial officer of the PC Party of Canada, and Susan J. Kehoe, the Conservative Party’s CFO, between September 2003 and February 2004 indicated that the financial reports were "complete and in order."

Ms. Repo said the party then told her "no, you can’t have" the money, a decision she said she believes was the result of the federal Conservatives "hoping to keep the money for the legal costs" associated with defending the lawsuit to preserve the PC Party.

Mr. Orchard then launched his lawsuit in February 2004, followed by a counterclaim by the Conservative Party, each of which sought damages against the other.

“These are the people [Conservative MPs] who are constantly standing up in the House of Commons and saying to the Liberal government, ' Give back the money' over the sponsorship scandal, but this is a very embarrassing issue in their own backyard," Ms. Repo said.

Mr. Norquay, who serves as communications director in the office of Conservative Party Leader Stephen Harper (Calgary Southwest, Alta.), declined to comment on the "he said-she said" allegations Ms. Repo raised.

"Besides, there is a settlement between the two sides and the argument today really is just about how to get that done," said Mr. Norquay.

But he did comment on the federal Conservatives’ decision to reject Mr. Orchard's party membership and ban him from attending the recent convention in Montreal as a member-observer, despite Mr. Orchard's claim that his membership was renewed and his convention registration was accepted.

"We have a simple rule," said Mr. Norquay. "To belong to the party you have to subscribe to its objectives and you have to be a supporter of the party, and he clearly is not."

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