Why is political money interesting?

Money is the oxygen of politics.

A campaign, or a party's operation outside of an election period, needs many things: enthusiasm, conviction, time, people, intelligence and money; but the most easily documented of these is money. Records of movements of political money give us hints of sympathies, interests and allegiances that we might otherwise not have noticed. Money talks, and money votes. Political money is often intended as a signal to the recipient, and so it can be a signal to us.

How are political donations regulated?

The law governing political donations in Ontario is the Election Finances Act, with the changes made in 1998. The really important parts are explained below, but you can read the whole text here.

How can people donate to political parties and candidates in Ontario?

In a year which isn't an election year, unions, companies and individual people can donate to the central organization of a political party, to one or more of a party's riding associations, or both.

In an election year, donors can give in any or all of four ways: to the central organization of a party, to a party's central campaign, to a riding association of a party or to an individual candidate's campaign.

What are the limits on political donations in Ontario?

Before Bill 36 was passed in 1998, political donors could give a maximum of $4,000 to a party and up to $3,000 to riding associations, with no more than $750 of that going to any one riding association. In an election year, in effect, these numbers doubled: donors could give up to $4,000 to a party's central campaign and up to $3,000 to candidates, with no more than $750 of that going to any one candidate.

Under this system, a donor trying to give as much as possible to a party could not give more than a total of $7,000 to various parts of it outside an election year, or $14,000 in an election year.

When Bill 36's amendments to the Election Finances Act took effect in January, 1999, this system stayed much the same, but with raised totals.

Starting in January 1999, political donors can give a maximum of $7,500 to a party and up to $5,000 to riding associations, with no more than $1,000 of that going to any one riding association. In an election year, donors can give up to $7,500 to a party's central campaign and up to $5,000 to candidates, with no more than $1,000 of that going to any one candidate. In an election year, a deep-pocketed donor will be able to give a total of $25,000 to various parts of a party, concentrating $10,000 of that in five ridings.

These limits apply only to any given party; in theory, donors can maximize donations to any number of Ontario parties.

What's the important technicality which you need to explain?

I was hoping you'd ask that. A year in which there is a by-election is legally the same as a year in which there is a general election, for the purposes of political donations. So under the pre-1998 rules, a donor giving as much as possible to a party's central fund could have given $8,000 in a year in which there was a general election but no by-election, $4,000 in a year where there was neither a general election nor a by-election, and $8,000 in a year where there was only a by-election. In 1995, when there was a general election and also a by-election called in the Toronto riding of St Andrew-St Patrick, a donor to a party's central fund could have given up to $12,000.

It's important to remember that the amounts parties are allowed to raise for a by-election have no relationship to the amounts they are allowed to spend. For example, while the PCs at all levels spent $87,499.18 on their campaign in the Nickel Belt by-election of October 1, 1998, the party's central fund was able to raise an additional $2.7 million, more than 32 times the amount they actually spent.

As the Nickel Belt by-election happened before the raised donation limits took effect in January 1999, we can expect the coming by-election in Wentworth-Burlington to create even more donation room than happened in Nickel Belt.

So while there might only be two or three by-elections in a year, which between them have no chance of changing the political balance in the Legislature, the fact that they occur can have a dramatic effect on political giving.

How should I interpret amounts of donations?

Donations of either $4,000 (to a central party) or $750 (to a candidate or a riding association) mean that a donor is making a point of giving as much as possible. When the 1999 donation records eventually become public, those numbers will be $7,500 and $1,000, respectively.

Here is a case study of a company that maximizes its donations to the PC party.

Two good questions to use to assess a political donation are:

1) Is the donor giving as much as possible?
2) Does the donor give to other parties?

What donations appear on public records like this?

Parties are only required to report donations over $100.

How are they made public?

You can make paper copies of political donation records through the Commission on Election Finances, but it's more revealing to take the same information in electronic form and put it into a spreadsheet or database. Once you've done that, you control the information, and you can ask it whatever questions you like. The Commission is now required by law to put copies on the 'Net, which they were already doing anyway.

Why are ridings represented by numbers and not their real names?

Because the Commission on Election Finances does it that way, and all the ways of fixing it in a way that guaranteed no errors were much more trouble than they were worth.

Why do the riding numbers go from 1 to 130, then from 201 to 303?

Under the Representation Act, 1996, (or "Fewer Politicians Act"), Ontario switched from having 130 provincial ridings to using the 103 federal ridings in Ontario for provincial elections. Under the Commission's system, ridings 1 through 130 are the old provincial ridings; 201 through 303 are the new federal/provincial ridings. A guide to what riding code goes with what riding under the new system is here.

Donations to the new riding associations began to appear in the 1997 returns.

A donor I'm interested in gives to some ridings but not others. How should I interpret this?

There could be many answers, but there's a brief example with an explanation here.

How do I find out more about a company that gives money politically?

If a company is public, it is required to file certain documents with securities regulators. These documents are now almost always available on the 'Net. Try looking for them at the System for Electronic Document Analysis and Retrieval web site. If the company is also public in the United States, as many Canadian companies are, its Securities and Exchange Commission filings are available through a system called EDGAR.

If it is a private Ontario company, its records of incorporation and officers are available for a fee at the Companies Branch of the Ministry of Consumer and Commercial Relations. (A company must be legally incorporated, though not necessarily in Ontario, to give money to an Ontario party or candidate.)

You may also be able to find its address through the business listings of Canada 411. Try restricting your search to Ontario.

Federally incorporated companies can be searched for here.

How do I find out more about a person that gives money politically?

This one is harder. Under Bill 36, the Commission is barred from publishing the addresses of political donors, although it's often easy to figure them out. Try the residential listing of Canada 411.

It can be revealing to cross-reference donations made personally by the officers of a company with the company's donations, but there's no simple way to do this without the company's articles of incorporation.

How do I interpret the way you've set up the data?

There are four fields:  

Central

1996 NDP Central

RAE, BOB

$ 2,053.00

 

99

1995 NDP riding/candidate

ROYAL BANK OF CANADA

$ 750.00

From left to right: field (1) is the code for the riding or an indication that the donation went to a central campaign or organization. Field (2) is the report the donation showed up in. In the first case shown above, the donation was to the central organization of the Ontario NDP in 1996; in the second case, it was to the NDP candidate in riding 99, which is Sarnia. Field (3) is the donor, and field (4) is the amount.

Why use spreadsheets?

This information would probably have worked better in a database format, but I had time either to do the project or learn a new program. I already knew Excel, and didn't look back.

Why are the parties in separate files?

Because even the Office '97 version of Excel doesn't create spreadsheets big enough to handle all three parties in a single file. Ideally, donations to all parties would be in one file, sorted by donor - if only because it looks very sharp if they're colour-coded by party.

Why did you ignore the small parties?

I started out including them, but found that manipulating the data for the small parties' returns was almost as much trouble as the data for the big ones, but for a far lower return in useful information. If you need political donation information for Ontario's small parties, it's at the Commission's site.

How reliable is your information?

The spreadsheets were prepared from about thirty unzipped files in WordPerfect, some of which were joined together at different times using programs that were being stretched to their limits. That being said, I've never found an error.

I make a practice of always confirming information I intend to publish against the paper records at the Commission. Although I've never found an anomaly, I'd advise others to do the same.

Who are you, anyway?