Penashue resigns over 2011 election donations

James McLeod and The Canadian Press
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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.”


CNLOPB resignation

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

Organizations: Canada-Newfoundland and Labrador Offshore Petroleum Board, Elections Canada, House of Commons Privy Council for Canada Bloc Quebecois Innu Development Limited Partnership Canada Elections Act.Russell Canadian Press

Geographic location: Newfoundland and Labrador, Ottawa

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Recent comments

  • david
    March 16, 2013 - 11:53

    He didn't resign for what we knew, he resigned for what we didn't yet know.....and now we never will. But we can take comfort in the knowledge that for any Canadian politican to actulally resign it was a whopper.

  • Don Fogwill
    March 15, 2013 - 16:06

    Hats off to the news media! It was the media that kept on that low life's case and squished him good. At least we still have a free press. Now all you have to do is keep on the provincial government's case about "freedom of information" and do the same to them. After all, what's the good of a "free press" if you can't print anything because there is no "freedom of information". If Peter wants to run again, let him and if the people are stupid enough to elect him, they deserve him.

    March 15, 2013 - 11:44

    Penashue has re-paid $30,000 for what he has been cought for, Wonder what he hasen't been cought for?

  • k
    March 15, 2013 - 10:31

    todd russell. You have to be kidding. Loses election ,quitsbecomes a mouth piece on Muskrat falls. Now wants to run again.Penashue and Bowers. stinky smell.

  • HVGB
    March 15, 2013 - 10:16

    How come no one gets charged and arrested for wrong doing in Politics ... How does Harper, Penashue or Bowers get to be above the law!!! Who pays the piper for the wrong doing? Makes me sick!!

    • why da difference Fiberal or PC
      March 15, 2013 - 11:32

      funny i cant remember Fiberal jim walsh resiging from fed board; after being found guilty in prov. court; or david dingwell the federal Fiberal after he was caught; he said hey " i am entitled to my entitlements"; so why did this fellow resign and just awhile ago; that liz matthews lady; quit even before she took the job; i guess thats the difference between being a Fiberal or being a PC; you are held to a higher standard apparently....what a farce

  • MM
    March 15, 2013 - 09:42

    I would bet Mr Bowershas been promised a VERY plum position for taking the hit on this episode. The Telegram should keep track of this so when the times come for the Government to pay back the favor.

  • Judy
    March 15, 2013 - 09:11

    Penashue didn't do anything different from most other politicians. Only thing, he got caught.

    • Wabana
      March 15, 2013 - 09:37

      Peter probably resigned and Harper probably promised him a Senate appointment.

  • Brian
    March 15, 2013 - 09:01

    I for one believe that Yvonne Jones would be a good MP for Labrador. Whatever one might say about her, I don't think anyone can really argue that she doesn't have the best interest of Labrador at heart. And one less Conservative seat in Ottawa would be a good day!

  • Don
    March 15, 2013 - 08:41

    Yvonne for Peter --- we still lose. How is dat woman going to handle dat crowd in in Ottawa when da' won't won't understand her a word she says and she won't understand dem. Der is no way she will be better den Peter.

    • Kev
      March 15, 2013 - 09:21

      She can say words? In da ouse? That's still better than Peter Penashue, who has little Tory human shield Pierre Poilievre speak on his behalf during Question Period.

  • hslaw
    March 15, 2013 - 08:36

    I guess Mr Harper has everything planned out now. Watch the tory machine go into action

  • Kevin
    March 15, 2013 - 08:12

    WOW.................can he get Katy THUNDERDALE to do the same ??????

  • Jay
    March 15, 2013 - 07:27

    Yvonne Jones must be jumping with joy. Her shot at the federal seat is here.

  • Wanda
    March 15, 2013 - 07:25

    Buddy, you certainly got a lot of false guts to even consider running again for re-election. Who will you blame next time for any of your "mistakes"?

  • derek
    March 15, 2013 - 07:18

    And should we really care?