Mike Allen denies involvement in campaign funding scheme

New Brunswick Progressive Conservative leadership candidate Mike Allen says he was not involved in a fundraising plan devised to leverage public subsidies for his campaign and questions why the issue is surfacing now, a month after it was shut down.

"I didn't write the letter or anything like that," said Allen. "We've been getting a tremendous amount of momentum in this campaign and I kind of sense that maybe this whole thing is a chance for a [rival] campaign team to throw some question on [us]."

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Donations to leadership campaigns in New Brunswick are not tax deductible but in July Allen's campaign tried to get around that restriction by having supporters donate money to Allen's home riding association of Fredericton-York.Those donations are tax deductible.

Letter sent to potential donors

In a letter to potential donors in July, Allen's official representative Charles Wright said money sent to the riding could then be used to "support the Mike Allen leadership campaign."

But it's not legal in New Brunswick for ridings to transfer money to a leadership candidate and in late August the PC party notified Allen's campaign it would not be able to use any money collected by the riding association, of which Allen himself is the treasurer.

"We just jumped in and asked them to modify their fundraising techniques," said Fredericton businessman Bob Hatheway who is policing financial matters in the leadership race for the PC party.

"I sent the note out suggesting the option to donate money to Mike Allen's campaign through the riding association would be a contravention of the [Political Process Financing]Act."

No laws violated

Although money was raised by the riding for Allen, he saidthe ruling from Hatheway came before any of it reached his campaign and so no laws were ultimately violated.

'The idea that any election rules have been broken are absolutely incorrect because there was no money that was actually transferred from the Fredericton-York association to my nomination.'- Mike Allen, PC leadership candidate

"The idea that any election rules have been broken are absolutely incorrect because there was no money that was actually transferred from the Fredericton-York association to my nomination," said Allen.

The PC leadership race has seven candidates and is the first in the province to operate under provincial financing rules, passed by the Gallant government in 2015.

Those rules govern who can donate, how much and require campaigns to disclose the amounts and sources of funding following the conclusion of the contest.

Allen acknowledged that raising money in a seven person leadership contest, with many campaigns chasing the same donors, has been difficult.

"It is a challenge and when you have a non-tax deductible situation for the majority of your expenses you have to be very thrifty in how you spend your money."