[Alberta Politics] Ever heard of the Tapcal Trust?

[Jacks]

I guess I have been a bit naive about how deep the rabbit hole goes. I was surprised that the PC executive holds enough power to tell the Premier when to jump and how high but this is even more baffling.

http://news.nationalpost.com/2014/04/01/alberta-pcs-using-undisclosed-trust-fund-legal-only-for-their-party-to-finance-its-deepening-debt/

Alberta’s long-ruling Progressive Conservative Party released another annual report showing it sliding ever further into the red this week, but the disclosure does not show the full picture, a National Post analysis has found.

The party is relying on a legal, albeit undisclosed, trust — a financial vehicle that has been forbidden to other Alberta parties since the ’70s — to finance its growing debt.

During the last election, the PCs took out a line of credit worth $1.6-million that was secured against the little-known Tapcal Trust, a holdover from an era of looser disclosure rules. In 2012, the party borrowed $646,000 against that total; an amount that grew to $1.1-million in 2013, as public disclosures released on Monday revealed.

Originally known as P.C. Bill 24 Trust, the party owned it when then-premier Peter Lougheed introduced widespread election reform and finance disclosure laws in 1977. The trust was grandfathered in, exempted from public disclosure laws.

Under current campaign finance laws, parties must reveal all of their assets.

“I don’t know if there’s $1 in there, $100 dollars or $1-million,” said Drew Westwater, a spokesperson for Elections Alberta. “I can’t comment on it beyond that. It’s something they have that other parties aren’t allowed to have, that’s fair to say.”

The party recorded relatively stable fundraising revenues in 2013 despite the political turmoil that eventually ousted former premier Alison Redford last month. Further, party spending has remained relatively stable over the past decade — election years excepted.

However, public disclosures continue to show the party falling ever deeper into debt and deficit. Although the party raised a respectable $2.2-million last year, its debt has almost doubled since last year. According to its public books, the party has a net negative asset position of $946,015 — an unprecedented figure for a party that has ruled the fundraising roost in one of the country’s wealthiest provinces for almost 43 years.

In order to finance the uncommonly competitive 2012 election, public disclosures show the party not only borrowed cash, it also liquidated $2-million in bonds stocks and securities and consumed about $1-million in cash that was on hand from 2011.

The existence of the Tapcal Trust seemed to come as a surprise to several people with long-standing ties with the party.

PC Party executive director Kelley Charlebois declined to answer any questions about the party’s financial position: He also declined to comment on how much the Tapcal Trust is worth.

“The PCAA does not discuss these sorts of financial matters,” he wrote.

Grandfathered in to avoid election reforms in 1977 and it' still around today??

[19Yzerman19]

Not really surprising... if you had a stash of financing that wasn't subject to ordinary electoral finance rules respecting transparency you'd try to keep that sucker around for times of need like these.

[Slava]

I saw the controversy about this yesterday, but I'm not sure what the big deal is? They took like $8k from it last year, and I don't think they can add to it? If that's right then it's hardly a game changer.

[Daradon]

To clarify, this is for party debt? Not provincial debt (not even sure how that would work)?

[Slava]

Originally Posted by Daradon

To clarify, this is for party debt? Not provincial debt (not even sure how that would work)?

The way I understood it was that this is a trust that the party holds and has for the past almost 40 years. They have taken money from this through the years and it's kept them out of debt at times.

It was around before some of the election laws were changed and because of that they were allowed to keep it.

[Daradon]

So kinda, but not quite, undeclared party funds? Especially as no other parties are allowed to have similar trusts.

That's how I understood it too.

[Rathji]

Seems like something that should be disclosed, but if they are only pulling $8k from it a year, I doubt it matters much.

It hasn't bothered anyone for 40 years, so this story will likely die as quickly as it was brought up. The reason being, if the opposition brings it up, it does show a lot of hypocrisy since most of them would have benefited and not said anything for 35+ of those 40 years.

[Resolute 14]

Originally Posted by Slava

I saw the controversy about this yesterday, but I'm not sure what the big deal is? They took like $8k from it last year, and I don't think they can add to it? If that's right then it's hardly a game changer.

The trust itself may not be a game changer, but the optics of it are horrible. You have the governing party hiding assets despite the fact that its own law mandates transparency. You have them using something the other parties cannot - which flies in the face of equal rights/privileges for all parties. And, almost certainly, the opposition parties are going to be hammering away on the question of how any Albertan could trust the PCs to properly manage the provincial budget when they can't even keep out of the red internally.

[GP_Matt]

Originally Posted by Slava

The way I understood it was that this is a trust that the party holds and has for the past almost 40 years. They have taken money from this through the years and it's kept them out of debt at times.

It was around before some of the election laws were changed and because of that they were allowed to keep it.

The way I read it was that they are borrowing against it. Having an asset to borrow against should see them receive a lower rate than the other parties would be able to obtain. It also allows them access to money quickly if they need a cash infusion to defeat another party.

[Slava]

Originally Posted by Resolute 14

The trust itself may not be a game changer, but the optics of it are horrible. You have the governing party hiding assets despite the fact that its own law mandates transparency. You have them using something the other parties cannot - which flies in the face of equal rights/privileges for all parties. And, almost certainly, the opposition parties are going to be hammering away on the question of how any Albertan could trust the PCs to properly manage the provincial budget when they can't even keep out of the red internally.

Originally Posted by GP_Matt

The way I read it was that they are borrowing against it. Having an asset to borrow against should see them receive a lower rate than the other parties would be able to obtain. It also allows them access to money quickly if they need a cash infusion to defeat another party.

Right, but the reason other parties can't have it isn't because they were never allowed. Its because you can't set one up any more...that's the grandfathering?

As far as them borrowing and being in debt, that's a whole other issue. I have no idea how a party could sink that far into debt during a year where there was no election and not a lot going on. If I were a member or supporter I would be questioning where all the money was spent.

[GP_Matt]

But the fact remains that they are the ones who banned it and grandfathered themselves in.

Why were they banned in the first place if there is nothing wrong with them?

[Slava]

Originally Posted by GP_Matt

But the fact remains that they are the ones who banned it and grandfathered themselves in.

Why were they banned in the first place if there is nothing wrong with them?

This is before my time for sure. If the fund was grandfathered in the 70's then I have no idea. I couldn't say why it banned, but the point is that it was grandfathered, and frankly if the Liberals or NDP had done the same they would have the same trust today. Maybe the Socreds had one?

It seems like a red herring though. I mean $8000 is nothing. If you have a competitive constituency you blow through that before you even rent an office for a campaign. Like I said in my prior post, the members ought to be more concerned with how the PCs managed to lose money in a non-election year, and even more concerned with the magnitude of those losses without an election to contend.

[Jacks]

Originally Posted by Slava

I saw the controversy about this yesterday, but I'm not sure what the big deal is? They took like $8k from it last year, and I don't think they can add to it? If that's right then it's hardly a game changer.

Who knows if they can add to it or not? Elections Alberta has no idea what the fund consists of.

Originally Posted by GP_Matt

But the fact remains that they are the ones who banned it and grandfathered themselves in.

Why were they banned in the first place if there is nothing wrong with them?

Exactly.

[Slava]

Originally Posted by Jacks

Who knows if they can add to it or not? Elections Alberta has idea what the fund consists of.


Exactly.

So because Elections Alberta doesn't know what the fund consists of, they also don't know the rules governing it? That is a way more concerning fact if that's that case.

I couldn't say whether they should be banned or not, and whether that was a good idea. Its Chestertons fallacy really....but go on and make that call.

[Jacks]

Originally Posted by Slava

So because Elections Alberta doesn't know what the fund consists of, they also don't know the rules governing it? That is a way more concerning fact if that's that case.

They should be disclosing all sources of funding period, just like every other political party in this country.

[Slava]

Originally Posted by Jacks

They should be disclosing all sources of funding period, just like every other political party in this country.

AKA, you have no idea and are just upset because it looks like it might be shady and its the PCs.

[Jacks]

And you as usual are defending everything PC. But you're not a supporter.

[corporatejay]

Originally Posted by Slava

AKA, you have no idea and are just upset because it looks like it might be shady and its the PCs.

Dude you are too predictable. I don't see how anyone can be advocating for less transparency when it comes to political spending, but your position seems to be "well we don't know if it's bad, so it should be fine".

They were banned for a reason, likely due to lack of transparency and the party who banned them exempted their own trust. I don't know how you think this is okay, material amounts or otherwise.

[Tron_fdc]

If you secure a 1.6 million dollar loan against it, I GUARANTEE there's more than a couple thousand in there.

Correct me if I'm wrong, but most business LOC's are only up to 70% of their asset value (depending on the institution).

[OldDutch]

Albertan's have no one to blame but themselves. If they would have turfed these guys with another party at least once since 1977, I am sure this little loophole would have been closed.

This is just another example of how a party ruling (not governing) for 40 years causes issues. I mean this issue traces back to 1977!

So as much as we want to be disgusted and outraged with the PC's I doubt anyone in 1977 foresaw this loophole lasting another 35+ years. In the end we are accountable in part for keeping this going by electing these guys predictably year in and out because we (as a province) are afraid of any other viewpoint.