The nationwide investigation into the Conservative party's campaign financing began in B.C., after an Elections Canada auditor red-flagged an invoice from a federal campaign in the Vancouver East riding.

In court documents used for an Elections Canada raid on Conservative headquarters last week, officials say the so-called "in-out" plan involved transferring funds to 67 different candidates, and then pulling the money back within days, where it was allegedly spent on national advertising purchases.

Approximately 700 pages of legal documents released this weekend show 12 B.C. ridings were involved in the Elections Canada investigation, including Stockwell Day's, in Okanagan-Coquihalla.

The documents also reveal how the investigation began in B.C., when the son of the unsuccessful Conservative candidate, Elizabeth Pagtakhan, was talking to an auditor for the agency after the election.

According to documents, Denny Pagtakhan explained that the local campaign in East Vancouver contributed to national advertising because there was no way they could spend their local limit.

But Elections Canada says money earmarked for local spending can't be spent on national advertising campaigns.

The documents also show Elections Canada is concerned that the campaign offices for local candidates claimed sizable tax rebates for that local spending.

Among those named in the documents is Victoria lawyer Bruce Hallsor, a campaign co-chair in the last election. He maintains the local B.C. campaigns did nothing wrong.

"Every political party co-ordinates advertising. And every political candidate affiliates with their national party, and likes to run ads that highlight their national leader [and] their national platform. And I'm aware of few campaigns that produce local TV ads," Hallsor told CBC on Monday.
 
"It's simply transferring money from where you have too much money to where you don't have enough," said Hallsor on Tuesday.

He repeated allegations made by other Conservative party members that the federal Liberals also moved campaign money around in a similar manner.

"Our money came from the national campaign, and in theirs it came from wealthy ridings to go to less-wealthy ridings. But in either case those who spent the money, claimed the rebate," claimed Hallsor.

The Conservative party is suing Elections Canada, claiming the agency is unfairly singling out the party in the investigation.