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Rights + Justice

Minister Nixes Probe into Mayor's Non-Profit

Nanitch Society made $5,136 donation to Vancouver's NPA.

Monte Paulsen 27 Mar

Monte Paulsen is investigative editor of The Tyee. He welcomes e-mail and invites respectful comment in the forum below.

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Community Services Minister Ida Chong: evidence lacking.

Community Services Minister Ida Chong has brushed aside calls for a provincial investigation into Mayor Sam Sullivan's fundraising practices, claiming there is insufficient evidence to warrant an investigation of the Vancouver mayor's tightly-held Nanitch Policy Society.

In a letter to opposition Coun. Raymond Louie, who requested the investigation, Chong wrote: "Your letter does not indicate that you or anyone else has knowledge of a person who gave funds to the Nanitch with the intention that those monies be forwarded to the [Non-Partisan Association] as a campaign contribution. The existence of such a person is the essential pre-condition to a breach of the [Vancouver] Charter."

"We knew from the start that this was much ado about nothing," said Sullivan spokesman David Hurford, "and the minister seems to have confirmed that."

Louie, who is now seeking his party's nomination to run for mayor this November, was disappointed.

"We know that monies were donated for one purpose, and then later redirected to the mayor's political organization. If that's not a violation of the intent of the charter, then I don't know what is," Louie said.

"It would appear that the current legislation, as written, is more of an impediment than a help in addressing the public disclosure of campaign finance," he added.

Nanitch funded Knowards celebration

As The Tyee reported last year, Nanitch is a non-profit society founded in 2002 by then-Coun. Sullivan and a handful of friends. The society was incorporated to promote the well being of "marginalized or disabled" community members.

By 2004 the society had become intertwined with the Knowards Coalition, a Sullivan-led effort that successfully fought against the creation of ward-style electoral districts in Vancouver. Sullivan claimed the Knowards effort left him $40,000 in debt.

In December of 2004, Nanitch/Knowards made a $5,136 donation to the Non-Partisan Association, the city electoral organization represented by then-Coun. Sullivan. The donation was disclosed in the NPA's campaign finance statement.

Sullivan has consistently refused to answer The Tyee's questions about Nanitch and the donation. When contacted by The Tyee last November, none of the current or former Nanitch directors claimed any knowledge of the donation from the society to Sullivan's political organization.

Sullivan did appear on radio station CKNW shortly after The Tyee story appeared and told Jon McComb that the decision to make a donation was made by the Knowards committee.

"It is a non-issue," Sullivan told The World Today on Dec. 5, 2007. "The wards referendum was hard fought. The 30 volunteers that were involved in . . . making that referendum a success, all wanted to have a celebration. They decided, the volunteers, to do that at the NPA annual dinner. And instead of putting on a stand-alone event, the committee --- the no-wards committee --- agreed to having them celebrate the victory there."

McComb asked, "Is there any conflict of interest in you being the head of the society, taking in money and then making a donation to the party that you belong to?"

"This wasn't a decision that I made," Sullivan replied. "This was a decision that was made by the volunteers . . . it was quite appropriate and proper."

Donors remain unknown

Coun. Louie thought otherwise, and on Dec. 3 he called on the province to investigate.

Louie pointed to Section 59 of the Vancouver Charter, which restricts "funnelling" of campaign contributions: "A person or unincorporated organization must not . . . make a campaign contribution indirectly by giving the money, property or services to a person or unincorporated organization for that person or organization to make as a campaign contribution."

The funnelling restriction is further clarified in a Candidate's Guide published by Chong's ministry: "If this kind of 'funnelling' of funds does occur, the individuals and organizations making the contributions -- and a financial agent who knowingly accepted the funnelled contribution -- will have committed an election offence and may face a fine, imprisonment, disqualification from office or disqualification from voting."

Louie noted that the Nanitch case merited investigation because while the accepting agent was a matter of public record (Andrew Graham is the NPA's treasurer) the identity of the individuals or organizations that contributed to Nanitch and/or the Knowards campaign have never been disclosed.

"The mayor has never disclosed who gave the money to these organizations," Louie said. "Despite repeated assurances from the mayor that there will be a disclosure, that disclosure has never materialized."

No donor, no breach

Minister Chong rebuffed Louie's request to investigate the Nanitch/Knowards donors, and concluded that without knowledge of such a donor, no violation could exist. In a Feb. 15 letter recently obtained by The Tyee, Chong wrote:

"Your letter implies that two distinct, improper actions have occurred regarding the Nanitch's contributions to the 2005 Non-Partisan Association (NPA) campaign. However, it does not offer any indication of the basis upon which these actions are believed to have occurred."

The first action was the donation by Nanitch, which may or may not have been pre-approved by the society's directors. Chong wrote, "This matter should be raised first with the Nanitch directors, and then dealt with in accordance with the processes outlined in the [Society] Act."

"The second improper action that your letter implies is that the Nanitch, by making a contribution to the NPA, has violated the Vancouver Charter provisions that prohibit indirect contributions to election campaigns . . .

"Your letter does not indicate that you or anyone else has knowledge of a person who gave funds to the Nanitch with the intention that those monies be forwarded to the NPA as a campaign contribution. The existence of such a person is the essential pre-condition to a breach of the Charter. A contravention of the Charter on behalf of either the NPA or the Nanitch would occur only if the recipient organization has reason to believe that the contribution was being made in contravention of this rule . . .

"Decisions about whether a contravention of the legislation has occurred can only be made by application by an individual to the Supreme Court."

How much evidence required?

"The question of policy is how much evidence must be presented before the minister will investigate," said Jason Gratl, a Vancouver lawyer familiar with Nanitch case.

"I agree with Minister Chong that there does not appear to be sufficient evidence of wrongdoing to rise to the standard of a full-blown public scandal. I wouldn't take this to Supreme Court," Gratl said. "However, there does appear to be enough evidence to justify an investigation."

Gratl added, "To my mind, everything turns on whether the society has conducted itself as a shell or a vehicle for transmitting funds rather than an organization advocating for the disabled."

Sullivan declined to comment directly for this story.

"Mayor Sullivan is busy running the city," said David Hurford, the mayor's director of communications. "The questions about Nanitch were not a big issue in the first place, and they are not a big issue now. It was just one of those things that a desperate opposition tried to use against us --- and it didn't work."

Louie, who has been threatened by a Sullivan lawyer against making "untrue and defamatory" statements in the wake of previous critical remarks, said the Nanitch case is further proof that campaign finance loopholes in Vancouver Charter needs to be tightened. Louie said some independent body needs to be empowered to investigate complaints.

"This issue is much larger than the individuals running for political office," said Louie. "This is about a structure that is flawed. The intention of the Vancouver Charter is to ensure that the public would know who was financing political campaigns. In this instance, we see how non-profit societies can be used to shield that information from the public."

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