Tories allegedly tell witnesses to snub Commons committee

And two Tories who were involved in the scheme - which allegedly shifted advertising expenses illegally from the party to individual candidates - ignored summonses ordering them to appear.

The suggestion of party interference in a parliamentary committee prompted shouts of objection from Conservative MPs during the first of four days of hearings into the controversy over the 2006 Conservative election campaign.

In the face of Tory challenges to provide evidence of the allegation, Liberal committee chair Paul Szabo quoted from a committee clerk's report to him describing witness responses.

"He (a potential witness) informed me that the party has told them to decline," Szabo said, quoting directly from the report at the table with the clerk sitting beside him.

New Democrat MP Pat Martin said such instructions would be tantamount to obstruction of justice if it was a court hearing.

But a Conservative assistant at the committee denied the party instructed potential witnesses to stay away.

"It did not, absolutely not," said Yaroslav Baran, chief of staff to government whip Jay Hill.

Szabo would not disclose the names of witnesses who said the party warned them away, but informed the committee that two witnesses from Vancouver - defeated candidate Elizabeth Pagtakhan and her agent, Denny Pagtakhan - were ignoring summonses.

Denny Pagtakhan's comments to an Elections Canada auditor in late 2006 became the "red flag" that prompted the electoral agency to review the advertising expenses. He bluntly told the auditor that $29,999 he paid the party for television and radio advertising - after receiving the money from the party - was actually for the party's national campaign.

Prime Minister Stephen Harper had warned about a "kangaroo court," but the Conservatives seemed more interested in a media circus Monday. The committee got off to a raucous start with a top Tory being ejected after showing up two days early and refusing to leave voluntarily.

Doug Finley, who ran the Tories' election campaign, surprised committee members by showing up two days before he was scheduled to appear - in what seemed to be an orchestrated attempt to create controversy.

Finley then stunned MPs by ignoring requests from Szabo to leave and return for his scheduled appearance Wednesday. Szabo eventually ordered in Commons security guards who escorted Finley from the room.

The show of defiance by Finley, who insisted he was unable to take time out of his work week Wednesday, overshadowed testimony from former Tory candidates who did appear at the hearing.

They told MPs how the party oversaw campaign spending Elections Canada has alleged allowed the part to exceed its national campaign spending limit by $1.1 million while giving candidates a chance to claim expenses rebates for expenses that were not theirs.

Liberal MP Dominic LeBlanc said the bizarre standoff was unquestionably planned by the Tories to take attention away from damning testimony.

Liberal and New Democrat MPs also accused Finley of showing up at the committee in an attempt to intimidate witnesses who were scheduled to testify Monday and others who may have been planning to accept committee summonses to appear later in the week.

"They're sending a message to all these Conservative witnesses that the party is watching," said Martin.

Finley's appearance threw the inquiry into momentary chaos, and the refusal by other Conservatives to come to testify added to the distraction from testimony by three witnesses who angrily denounced the Conservative party for the way they were treated in the 2006 election.

The three former candidates reinforced information that has been disclosed earlier about how the party orchestrated transfers of thousands of dollars for radio and television advertising to 67 candidates Elections Canada has identified in an investigation into the scheme, and promptly transferred the money back to party headquarters.

Elections Canada alleges the money paid for television advertising that was produced for the party and the scheme allowed the Conservatives to exceed their national campaign spending limit by $1.1 million while allowing candidates to claim rebates for expenses that were not theirs.

Joseph Goudie, the defeated Conservative candidate in the riding of Labrador, told the committee his campaign manager was instructed by the chief provincial Tory organizer in the province how the campaign would receive a transfer from the federal party, but the money was not for local advertising.

"She was told it would be part of the national campaign," said Goudie.

He produced affidavits he and his two top campaign assistants gave Elections Canada during its investigation of the ad expenses.

In one of the affidavits, Goudie's official campaign agent explains how provincial organizer Brian Hudson explained how the transfer would work.

"I was told by Mr. Hudson that Mr. Goudie's campaign would be receiving money from the Conservative Party of Canada for advertising," said the affidavit from the agent.

"I thought Mr. Hudson was going to send us money to help out with local advertising but then he said that the money would be coming in to Mr. Goudie's campaign from the Conservative Party of Canada but would be going right back out to the Conservative Party of Canada," said the affidavit, a copy of which Goudie provided to The Canadian Press.

Former Quebec candidates Gary Caldwell and Liberato Martelli both said they felt betrayed by the Conservatives when Elections Canada questioned their expenses claims for advertising and other expenses after the election.

Martelli explained how the party transferred $14,000 into his campaign one day and took it back out the next day to pay for expenses. He told the committee he did not have any significant expenses for his campaign and printed his brochures in his basement, but Elections Canada sent an $8,000 rebate to the party because of the transaction.

"It's a licence to print money," said Martin. "It's like walking a chicken past a pot of water and calling it chicken soup".

Caldwell, who has since joined the Green party, said a Conservative organizer told his official agent that $37,000 the party was transferring to their campaign was to pay for local election advertising, but there was no local advertising.

Goudie and Caldwell said party officials warned them not to talk to the news media about the scheme after Elections Canada began reviewing it.