A couple of posts ago I noted the problem of “loans” to political parties and candidates.
Under our campaign finance laws a lender to a politician can “write off” any loan if he determines the loan is “truly uncollectible”.
This clearly raises the possibility of a contributor getting around the $5,400 limit on donations.
Take, for instance, the Canadian Action Party.
Back in 1997, Paul Hellyer, loaned the Canadian Action Party (which he founded) $750,000.
Well, a few days ago he told his accountants to write it off. Hellyer calls it a “bad loan.”
Critics are calling it a loophole. After all, that $750,000 loan now looks an awful lot like a contribution.
But you know what? The poor folks at the Canadian Action Party need this loophole to survive. A small party, lacks a large grassroots following and needs a small number of wealthy donors to keep it going.
Campaign contribution limits only serve to help the larger parties and most especially the incumbent party.