Banks did Liberals a 'favour' with debt interest forgiveness: Duff Conacher
The Newfoundland and Labrador Liberal Party announced earlier this week it was officially debt free, but the founder of Democracy Watch says there are some unanswered questions and possible conflicts of interest.
The Liberals said in a statement Wednesday that it had retired its debt. When Dwight Ball was elected leader in 2013, the debt was $885,000, including interest.
However, the party negotiated with three banks to waive the interest and penalties. The party paid off 100 per cent of the original loan, which was $500,000.
Ball wouldn't comment on exactly how much interest was forgiven, and also did not specify which institutions waived those fees.
Duff Conacher, a cofounder of Democracy Watch, said it's unlikely that Ball does not know how much interest was taken off the party's debt.
"It's simple math," he said Thursday.
"Essentially what [Ball] is saying is, 'I don't know how to do simple math and that's why I can't tell you what the amount is.' Or he's just saying, 'I believe in secrecy in terms of who has paid us off,' and neither of those are great things to be saying," Conacher said in an interview with On The Go.
According to Conacher, it is not surprising that the Liberals arranged with the banks to knock off interest fees on a long-standing debt. However, he said it may be an ethical problem.
"This is not a treatment that the banks could show that they give to every borrower and, as a result, they are doing a favour and they're accepting that favour as the politicians," he said.
"As a result, they are now in a conflict of interest in dealing with any regulation that affects the banks directly or indirectly."
Overall issue with N.L. donations
He added the party may actually be violating the Conflict of Interest Act with regards to accepting extra benefits because party members will no longer have to work to pay off that debt.
"They have a personal benefit from receiving a break from the banks and I believe, it's my opinion — legal opinion — that they are accepting extra benefits in violation of section 7 of the Conflict of Interest Act," said Conacher.
According to Conacher, the overall political donation system in Newfoundland and Labrador needs to be changed to put limits in place for how much parties can accept.
He added that because businesses and organizations are allowed to donate, the current system is an "undemocratic, unethical essentially system of legalized bribery."
