MP Peter Penashue's campaign head apologizes for spending errors

ST. JOHN'S, N.L. -- The former campaign manager for federal Intergovernmental Affairs Minister Peter Penashue has apologized for mistakes and omissions in Elections Canada paperwork as critics pounce on reports of illegal overspending.

Reginald Bowers sent a letter to Elections Canada saying record-keeping and budgeting weren't top of mind as he grappled with logistics in Penashue's sprawling Labrador riding during last year's federal election.

Penashue won a stunning upset victory over Liberal incumbent Todd Russell by just 79 votes, seizing the only Conservative seat in Newfoundland and Labrador.

But according to an Elections Canada review, Penashue's team spent almost $4,000 more than the legal limit of just under $84,500.

Bowers says in the letter dated May 25 that he kept no records on who travelled with Penashue and mistakenly omitted travel expenses from costs covered by the spending cap.

"You must keep in mind, this was my first time being an official agent and campaign manager so I had to get advice wherever I could and very quickly because I had very limited time," Bowers wrote to the office of the chief electoral officer. "So mistakes were made.

"I apologize for this and will advise differently the next time if I am involved. But this time, given the circumstances, record keeping and budgeting did not get the top priority."

Bowers wrote that he checked all expenses with Conservative Party advisers and Elections Canada "and somewhere I got the understanding that all travel within the riding was considered personal expense and not governed by the cap on expenses."

Bowers describes a scramble to get Penashue out to far-flung communities in Labrador using freight flights, passenger planes and sometimes chartered aircraft.

"I tried to have people travel with the candidate whenever possible, because it looks better," Bowers wrote in response to a lack of paperwork on who accompanied Penashue. "But most (of the) time it was him and his wife and she did do some campaigning in the larger centres."

Penashue had an unusual companion with him on one flight when a stranded cat needed to get from a veterinarian's office in Happy Valley-Goose Bay to its owner in remote Rigolet, Bowers wrote.

"The lady had no way (of) getting her cat home. So Minister Penashue carried it in a cage. This was on a freight flight so we didn't get charged. But if there was an expense, according to what you are telling me, it would be an election expense even though the cat couldn't vote."

Bowers went on to be named last December to the federal-provincial board that regulates Newfoundland's offshore oil sector. The appointment was slammed by NDP MP Ryan Cleary, representing St. John's South -- Mount Pearl, who said Bowers had no obvious related credentials.

"Apparently, managing a successful Conservative campaign is experience enough," he said at the time.

Natural Resources Minister Joe Oliver defended Bowers as a capable appointee with decades of experience in regional economic development.

Penashue was unavailable to comment on his campaign spending. A spokesman said in an email that his team is aware that Bowers may have made mistakes and is working with Elections Canada "on making needed amendments."

Russell is now president of the NunatuKavut Community Council representing people descended from the Inuit of southern Labrador. His defeat to Penashue on May 2, 2011, came just three weeks shy of his six-year anniversary as an MP, the date on which he would have qualified for a pension. He was first elected May 24, 2005, in a byelection.

Still, Russell said in an interview that he has no regrets and no immediate plans to challenge his loss.

"When I go into a campaign of any sort, particularly a federal campaign where there are stringent rules and guidelines that ensure fairness ... then I would hope that everybody follows those rules," he said. "And I would hope that if there's any breach of the rules that Elections Canada takes the appropriate action.

"But the issue of a contested election is such a cumbersome and very legalistic and very expensive proposition. I would think there would have to be substantially more grounds before we could look at that particular option."

Elections Canada spokesman John Enright was careful not to speak about any specific case, but said in general that mistakes made by inexperienced official agents handling campaign finances are common.

"I'll be frank with you, it's probably one of the toughest jobs in the campaign next to being the candidate because there's a lot of responsibility there," he said from Ottawa.

Elections Canada works as closely as possible with official agents to ensure compliance and transparent reporting, Enright said.

"They're the money person of the campaign. They're responsible for opening that bank account once the first contribution is received, and all of the expenditures and contributions flow through the desk of the official agent."

Overspending in a campaign carries a fine of $1,000 and/or three months in jail to be served by the official agent, Enright said.

Both the federal NDP and Liberal opposition parties have called for Penashue to publicly explain how his campaign was funded.

Similar allegations of "crooked accounting" are being levelled at Conservative MP Dean Del Mastro, Liberal ethics critic Scott Andrews said Tuesday.

"These are the rules, you play by them," he said in an interview. "You know full well what's going on during your campaign and you can't plead ignorance."

Del Mastro has denied media reports that he exceeded his spending limit during the 2008 federal election campaign and then tried to cover it up.

None of those allegations has been proven in court and no charges have been laid.