Peter Penashue has resigned as MP for Labrador.
— Telegram file photo
Conservative cabinet minister Peter Penashue has resigned his seat in the House of Commons and re-paid $30,000 in “ineligible” campaign donations from the 2011 election campaign.
The intergovernmental affairs minister says he’ll seek re-election in a byelection now that he’s cleared the air.
Within minutes of the ann-ouncement, the Newfoundland and Labrador political world was on fire with speculation.
CNLOPB board member resigns within hours of announcement …Continued from page A1
Former Liberal MP Todd Russell and Liberal MHA Yvonne Jones are seen as the two most likely challengers against Penashue.
Jones declined to comment to The Telegram, but provincial Liberal Leader Dwight Ball said it’s something he’s already heard about.
“It’s really exciting to travel Labrador with Yvonne,” Ball said. “I can tell you she’s definitely encouraged to seek this nomination, but she also enjoys her job here as an MHA.”
New Democrat MHA Dale Kirby said people from his party are already talking about the by election too.
“We’ve already been having some conversations about that today internally,” he said. “I just participated in a discussion about it, so the ball is already rolling.”
On the federal level, MPs were approaching the situation cautiously. St. John’s East MP Jack Harris said that he wants to hear from Elections Canada before things get going.
“We have to have the Elections Canada report and what their findings were,” Harris said. “In the case of Mr. Penashue and his government, this government has been ethically challenged when it comes to dealing with elections laws.”
Liberal MP Scott Simms echoed that. He said the alleged violations of elections law need to be dealt with, and Penashue can’t just short-circuit that by resigning and running in a by election.
“We need to hear from Elections Canada now,” he said. “If you’re found guilty, you’re banned from running for five years.”
Penashue says an “inexperienced volunteer” in his organization — his official agent — was responsible for accepting the illegal donations.
The campaign manager, Reginald Bowers, was subsequently appointed by the federal government to the Canada-Newfoundland and Labrador Offshore Petroleum Board, which regulates the oil sector.
Bowers resigned from the board late Thursday afternoon, effective immediately, according to a board spokesman.
“Although I was unaware of the inaccuracies in the return, I believe I must be accountable to the people who elected me and therefore I am stepping down as the member of Parliament for Labrador and will seek re-election through a byelection,” Penashue said in news release.
“I will also be stepping down as minister of intergovernmental affairs and president of the Queen’s Privy Council for Canada.”
A curt news release from the Prime Minister’s Office said Transport Minister Denis Lebel would take over Penashue’s duties at intergovernmental affairs. Lebel has acknowledged he previously held a party membership with the separatist Bloc Quebecois in the 1990s.
A PMO spokesman said “a byelection will be called in due course,” while a Conservative party official confirmed Penashue will be the party’s candidate, suggesting he need not seek the nomination.
What was not clear Thursday was whether Penashue’s byelection run is part of his compliance agreement with Elections Canada.
The elections watchdog is refusing to comment, but says Penashue is working with it to amend his 2011 campaign return.
Penashue won his seat by just 79 votes in an upset over Liberal incumbent Russell in 2011. An Elections Canada review subsequently showed Penashue spent $4,000 more than his limit of almost $84,500.
He also appeared to have accepted thousands of dollars in free flights across his expansive, remote riding — which would amount to a corporate donation.
Liberals are also demanding to know whether a $25,000 loan Penashue received from the Innu Development Limited Partnership came with a commercial rate of interest, as is required under the rules.
And Penashue has yet to explain how a St. John’s construction company, Pennecon, showed up as a donor to his campaign account when the campaign issued tax receipts to six executives of the company. Corporate donations are illegal under the Canada Elections Act.
Russell said Penashue should have stepped down months ago, but that he was nonetheless shocked to hear the news.
“In this part of the world, we use the word ‘gobsmacked,’” Russell told The Canadian Press.
“Obviously there’s an admittance here that something was absolutely and fundamentally wrong.”
Bowers said he resigned his appointment on the Canada-Newfoundland and Labrador Offshore Petroleum Board so as not to be a “distraction” during the coming byelection.
He maintains he did nothing deliberately wrong as he managed Penashue’s election finances.
“I’m going back to a job that I don’t have to resign from — retirement,” said Bowers, who turns 68 on Saturday.
He said Penashue’s campaign was $2,000 below the spending cap, according to his calculations, when he was replaced as official agent last summer.
Bowers said he also believed that donations from six donors at the St. John’s construction firm were legitimate.
“I do not agree with his resignation and I’m hoping people will realize how much he meant to them and will re-elect him,” he said of the MP.
— With files from Joan Bryden in Ottawa and Sue Bailey in St. John’s