Fantino-watch: Follow the money

Of bank accounts and elections laws
iPolitics Insight
Mar 15, 2012
by Michael Harris


On March 8th, Chris McCluskey, Communications Director for Associate Minister of National Defense Julian Fantino wrote to our Michael Harris asking for corrections to his column “Was a ‘political super-weapon’ part of Robogate?” Here is Michael’s reply.

Dear Chris,

Thank you for your e-mail offering to correct “several inaccuracies” in my iPolitics column of last week dealing with robocalls and alleged financial irregularities in the by-election campaign of Julian Fantino in 2010.

Allow me to begin with a mea culpa. I have changed Mr. Stephen Lecce’s job description to reflect the fact that he did not become Deputy-Director of Communications for Prime Minister Harper until after the 2011 general election, in which he served as Minister Fantino’s campaign manager. When he took a leave of absence to help Mr. Fantino with his by-election campaign, Mr. Lecce was working as a communications strategist in the PMO. I think we may both agree that Mr. Lecce was still a “good get” for the Fantino campaign.

Your main complaint about my column had to do with the alleged existence of two bank accounts for the Fantino by-election run, allegations brought to Elections Canada by three former members of Vaughan’s Conservative riding association. This is how you put it in your email to me of March 8th. “There was no second bank account for either election campaign. As we know, the Elections Act requires a campaign to have one bank account.”

In particular, you said that my column incorrectly stated the position of former Vaughan EDA Director Tracey Kent as expressed in her affidavit about the existence of two accounts in the Fantino by-election campaign. You wrote: “Ms. Kent is not questioning whether there were two bank accounts for the by-election campaign.”

I went back to Tracey Kent to check your interpretation. Here is what she said: “Mr. McCluskey did not witness Mr. Fantino’s campaign Fundraising Chair walk into the Board meeting of the Vaughan Conservative EDA with a bank account that was NOT under the care/control of the campaign Chief Financial Agent. Nor was it under the care/control of the Vaughan Conservative EDA. Therefore the only conclusion that can be drawn was that there was another account associated with the Fantino campaign….This was a bank account NOT listed as the campaign’s main account. This bank account had previously been unknown by the Vaughan Conservative EDA, and had no affiliation to the riding association.”

This is not the first time that Tracey Kent has attested to her belief that there were two bank accounts for the by-election campaign. Both she and Richard Lorello say they attended a January 18, 2011 meeting of the Vaughan Conservative Riding Association as Directors – a meeting called to discuss the successful by-election. Julian Fantino’s fundraising co-chair Sam Ciccolini, who was a guest at the meeting, gave a breakdown of the November by-election campaign, and announced that he had an account at the Italian Canadian Savings & Credit Union (IC Savings) with a balance of over $300,000. Mr. Ciccolini wished to present the IC Savings account to the Board. At that time, Kent and Lorello and another member of the Board expressed concerns that this new account did not meet the requirements of the Elections Act, and requested financial statements. The concerned Directors say they did not receive the financial statements they requested concerning the IC Savings account. (According to an account statement, there was $357,939.86 in the IC Savings account on the day of that meeting on January 18, 2011.)

According to Mr. Lorello, this second account was under the sole control of Mr. Ciccolini, but it was stated by Mr. Ciccolini that Mirella Chiappetta, the Official Agent of the Vaughan EDA, would be added to the account as signing authority. Ms. Chiappetta was also administrative secretary to Julian Fantino.

Mr. Lorello resigned as a Director and was immediately replaced by Mr. Ciccolini, who was also Chair of the Audit Committee and Director of the ICS Credit Union. Mr. Ciccolini stated the money in the account was from Minister Fantino’s fundraising. Minutes of the January Board meeting, approved at a later Board meeting on April 10, 2011, omitted any discussion of the second account to the dismay of both Ms. Kent and Mr. Lorello, both of whom maintain they had raised vigorous objections.

Then there is this evidence of a second account from Sam Ciccolini himself. In an e-mail dated April 29, 2011 to former Director Richard Lorello and Frank Domenichiello, who was president of the Vaughan Conservative EDA, Mr. Ciccolini stated that, “The reason we still have the second account still open is that Mirella [Chiapetta] felt that it would be best to have the TD bank account as they have been good to us and there were some transactions – checks that have yet to clear and at some point we would close it. I do not remember any vote taken on it, could be wrong….” These comments were made on April 29 during the General Election, and according to Mr. Ciccolini, there still seem to be two bank accounts.

Tracey Kent then added more detail about the alleged second account. An e-mail from Kent to Richard Lorello also dated April 29, 2011 states: “There was reluctance to transfer the funds into the EDA’s existing bank account, also at Toronto-Dominion. It was suggested by the President that the Vaughan Conservative EDA assume this account with Mirella Chiappetta added as signing authority. Walter Haidasz first objected to the assuming of this open account, I also added my objection. It was felt that this second open account of unknown origin would violate Elections Canada Law, and open the board to liability of past transactions, to which the Board would be held responsible, while having no control of…I am still unclear exactly what this account is/was. An open campaign account? A fundraising account? Pre-existing private bank account? The campaign CFA account? And who had signing authority on this account previously? No answers were provided in the meeting, nor documented in the minutes….Again this is not a [sic] municipal election laws. Federal election laws come with jailable punishment and heavy financial punishment….I am bound by my responsibility to submit a letter to Elections Canada with my concerns of the January 2011 Board meeting. ”

In a response to a similar e-mail from Richard Lorello later that same night, Sam Ciccolini said: “Further to my e-mail I am just told by Mirella that the account carries our vsa (sic) merchant accessibility and therefore needs to be kept open…sam.”

Based on all of the above, I stand by what I wrote. The directors of the EDA who opposed simply adopting the IC Savings account, may be wrong in their views, but there is no doubt that they honestly held those views and had reasons for doing so. As for the “second account” that former Director Tracey Kent objected to, there is no doubt that it was used to both collect money and pay bills for the Fantino by-election long before the Vaughan EDA learned of its existence.

On October 25th, 2010, the IC Savings account that would be eventually objected to by three members of the Vaughan EDA had a zero balance. Then on October 28th, 2010, there was a deposit of $28,000, followed by two deposits of 2 cents and 18 cents from Paypal on October 29, 2010. The first check was drawn on the IC Savings account on November 2, 2010. On November 25, 2010 there is a deposit of $15,000 with a notation beside it, either E/C or R/C IN ERROR. The month end statement for November shows that $420,110 was deposited into the account. Just after the by-election, the account balance was $423,309.42.

Checks from IC Savings account number 13532 were used to pay by-election expenses such as those submitted by Hume Inter Media Inc. for $33,232.56. Eight invoices from October 30 to November 30, 2010 for print materials used during the by-election campaign were paid for with check number 087 dated January 15, 2011. The invoices were sent to “Julian Fantino Campaign”, seven to the attention of Chris M. Rougier, who had worked in the office of Greg Kerr, Conservative member of Parliament for West Nova.

Seven invoices had customer # JFC010. One invoice, for 7000 election day door knockers with a shipping date of November 25, 2010, had a customer # CPC010. This invoice was sent to the attention of S. Shulman who was listed on the Hume invoice as “office agent” for the Fantino campaign. Payments to Hume Inter Media Inc. and others such as Clarion Solutions were made from the IC Savings account on January 15, 2011, three days before the Board meeting at which Mr. Ciccolini allegedly announced the existence of an account with over $300,000 in it to the Vaughan Conservative Riding Association.

On February 4, 2011 there is a withdrawal of $100,000 from the account by check number 91. On February 14 there is a transfer into the account of $24,099.53 with a notation that says “credit cards”. We know that both MC and VISA donations were made to the campaign totalling roughly this amount, but how were both credit cards combined for a single deposit?

It turned out that one of the Hume Inter Media invoices for campaign postcards in the amount of $3,107, dated November 25, 2010, was paid for by both the Conservative Party Fund and the IC Savings account. Hume Inter Media sent a refund check dated May 16, 2011 oddly made out to both “Julian Fantino Campaign” and “The Julian Fantino Campaign”. Are these two different entities? If not, why would Hume make the refund check payable to both names?

A notation at the bottom of the check reads, “Re: duplicate payment inv 113067 (Conservative Fund Canada Paid).” In response to a letter dated August 19, 2011 from Elections Canada asking for bank account statements and other information, Stephen Shulman volunteered that he had received a refund from Hume Inter Media and that the funds would be deposited into the bank account on September 1, 2011.

In a contract sent to Elections Canada, Stephen Shulman is described as “Official Agent, Julian Fantino Campaign 2010.” But on the accounts of IC Savings, he is listed as “Financial Agent, The Julian Fantino Campaign.” Again, are these two different titles for two different roles or one and the same thing? It is not clear.

The IC Savings was still open when the Hume check was received. On March 28/11, two days after the General election was called, $220,000 was withdrawn from the account without a check. At the end of May, 2011, there was still $4897.65 in the IC Savings account.

Regarding “possible improper transfers” of surplus Fantino funds worried about by former Vaughan directors, you assure me that the financial statements due at the end of May 2012, will show that the activities of the Vaughan Electoral District Association are in order and in full compliance with the Act. That may well be. The conclusions of Elections Canada will be the acid test of your view that there was only one campaign account for both the Fantino by-election and the 41st general election, and the allegations brought by former members of the Vaughan EDA. I note that Minister Fantino received a three-month extension on his filing date for the 41st election, and that according to Elections Canada his financial statements for the 2010 by-election have not yet been audited.

In the meantime, I know we both share the same goal – the most accurate information to the readers of iPolitics that can be offered. I look forward to meeting you as I work on this and related banking stories.

Readers can reach the author at michaelharris@ipolitics.ca. Click here to view other columns by Michael Harris.

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