Friday, July 13, 2012

Implications of the BC Patriot Party and the Advocational Party of BC

I have looked at the finances of the BC Patriot Party and the Advocational Democratic Party several times (among other times, a timeline on December 7th 2011, and yesterday noting the $598,552.66 donation)  and simply seems wrong to me.  So why does it matter that a political party is being used for some other purpose other than trying to people elected to the legislature?

Political parties are mentioned in our BC constitution.   They are given special advantages in elections - they can spend more and they can organize better than individuals. Also do not forget that we subsidize them through tax deductions even though they are not charities. All of which means they are not private organizations but parts of the public governance of this province.  Political parties are part of our parliamentary system and therefore should more accountable to the public than they are.  

We should be able to see a lot more information about what political parties spent their money on.   We should know who  makes how much money as a staff person or on contract.   We should be told how many members the party has and where they are located.  All parties should have consitutions that are public and accept anyone in the public as a member - they should not be allowed to turn anyone away.  

Looking at the BC Patriot party and the Advocational Democratic party, they seem to be acting  outside of serious public scrutiny. I can not see that how they are operating is actually in anyway connected with the governance of the province and getting people elected as MLA, which is the role of political parties

If election act finance rules can work like they seem to, a political party can give someone as much money as they want as a gift and not have to show who it went to and why.   We have a set of rules that are designed to allow for serious financial corruption.

Let us say I lend a political party $1,000,000 at 4% interest but do not collect the interest, this is a $40,000 donation to the party, though I only get a tax credit for a small portion of it.   The rest, if the loan was from a business, could be written off as a loss.   While it seems this is part of the purpose of the BC Patriot Party they are not the only ones making use of this.   The Reform Party has an ongoing debt of $50,000 from Gamble Foods which means the company gets to write of $3500 in interest every year.

Now let us say that the party then gives me a gift of $1,000,000 - the same money I gave them as loan.  The party does not have to explain where the money went as I noted  on April 4th when I saw that the BC Patriot Party gave away $596,552.66 but did not say who got the money.   I now have all my money back but at the same time I am getting an ongoing tax deduction of $40,000 a year.  I could also then write off the loan over time and get a loss for my business that would increase my tax deduction.

Let us say that the gift of the money was to my Cayman Islands bank account, it would seem that the money could easily be transferred out of the country without scrutiny.  I remember back in about 1999 a friend made a huge killing on some high tech IPOs and he realized the capital gains would kill him.  On our commute to work for the better part of a week he was trying to work out ways to move money offshore and not be hit with a huge tax bill.  I think he could do this with a political party.

As far as I can tell, you could use a political party to launder money from criminal enterprises.  The gift of the money coming out of the party is clean money.

When you buy and sell stocks in companies there are limits to what insiders can do, their transactions have to be reported.  What if the shares are held by a political party?   The BC Patriot Party and the Advocational Democratic Party seem to have bought and sold millions of dollars worth of stocks on margin.   They seem to have been buying and selling mining juniors which means the scale of transactions could very well be significant enough to have an impact on the stock value.   Who do they have to report this to?

Something needs to be done to change things, this is not acceptable as part of our political system.
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