Elections BC has issued penalties related to a prohibited campaign contribution accepted by an elector organization during the 2022 municipal election in Kelowna.

The penalties are assessed to the Spirit Alliance which ran two candidates who vied for seats on Kelowna council. 

Background

In a disclosure statement filed on Jan. 13, 2023, financial agent Michael Dudenhoeffer, reported that Spirit Alliance received a $1,250 contribution on October 14, 2022, from Kevin Knight Management Ltd. However, under the Local Elections Campaign Financing Act (LECFA), contributions from corporations are not allowed.

Elections BC notified Dudenhoeffer on Jan. 26, 2023, that the contribution was prohibited and needed to be returned. Over the following months, both Dudenhoeffer and Authorized Principal Official for Spirit Alliance Mitchell Berard were reminded of their legal obligation to return the funds within 30 days or remit them to Elections BC.

A supplementary report filed on Nov.14, 2023, confirmed that while the contribution had been accepted in October 2022, it was not returned until more than a year later. Elections BC then launched an investigation into the matter.

Investigation Findings

During the investigation, Berard described the situation as an "unfortunate oversight" and provided evidence showing attempts to return the contribution as early as Nov. 6, 2023. However, the funds were not remitted to Elections BC until May 8, 2024.

Initially, the investigation recommended penalties against both Berard and Dudenhoeffer. Dudenhoeffer objected, arguing he was not involved in accepting contributions for the campaign. Berard later confirmed that he alone had handled contributions and had not received written authorization from Dudenhoeffer to accept funds. Based on this new information, Elections BC adjusted the penalty recommendations.

Legal Violations

Under the LECFA:

• Campaign contributions must be accepted only through a financial agent or an individual authorized in writing by the agent;
• If a financial agent becomes aware of a prohibited contribution, they must return it within 30 days or remit the amount to Elections BC;
• Failure to comply with these rules can result in fines of up to double the prohibited amount.

Penalties

Spirit Alliance is being fined $750 for accepting a contribution that was not processed through the registered financial agent. Dudenhoeffer is being fined $1,250 for failing to ensure the prohibited contribution was returned or remitted in a timely manner.

Spirit Alliance and Dudenhoeffer have the right to appeal the penalties which must be paid within 40 days to the Minister of Finance.