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Former Conservative candidate Joe Goudie says his reputation is being maligned by the advertising scandal. ((CBC))

A politician who represented the Conservatives in the last federal election in Labrador is now denouncing the party over the widening advertising controversy.

Joe Goudie, who lost a bid for the Labrador riding in the January 2006 election, was one of the candidates who received funds from national Tory headquarters in the so-called "in-out" controversy.

A former provincial cabinet minister, Goudie told CBC News he is ready to cut all ties with the federal Tories over the matter.

In sworn affidavits sent to Elections Canada, following an RCMP search of Conservative headquarters earlier this month, Goudie and both his campaign manager and official agent said they were duped into accepting money from the central party, only to have to send it right back.

"I'm completely upset that the Conservative Party of Canada and its leader used me this way for their own ends, whatever those ends are proven to be," said Goudie.

Goudie, a cabinet minister during the Brian Peckford era in Newfoundland and Labrador, said he is now known around his home of Happy Valley-Goose Bay as being mixed up in the latest political scandal.

"One of the guys who came in said, 'You're on the news this morning.' I said, 'For what?' He said, 'Something to do with money and advertising,'" said Goudie, recalling how he learned at a local coffee shop that his campaign was implicated in the scandal.

Given 'heads-up' about advertising fund

However, Goudie added that he had received a cryptic warning a few months ago through a phone call from a federal Conservative official.

"[He was] giving me a heads-up [that] I may be contacted by the media to give a comment on the television advertising fund they had in place, and he asked me not to make any comment," Goudie said.

Goudie decided to speak out because he feels his reputation is being damaged.

"That's the impression I'm getting from people asking me in the last two days: 'Are you going to respond to any of this, are you guilty of this, are you not guilty?'" Goudie said.

Goudie's campaign was told the money was to be spent on television ads. But with no local TV stations, Goudie's team asked instead if they could spend the money on radio ads. Goudie said his staff was told to send the money back instead.

To add insult to injury, Goudie said, the Conservatives would not cover the fee his campaign paid to have the money wired back.

"When the money was sent back, it cost $21 to transfer it, and they haven't paid for that," Goudie said.

Goudie is the second Conservative candidate who ran in Newfoundland and Labrador in the 2006 election to speak out against the advertising scheme.

Cynthia Downey, who ran in Random-Burin-St. George's in southern Newfoundland, said her campaign was told nothing about the money that unexpectedly arrived from head office but was almost immediately pulled back.

Downey had already broken her ties with the party. She withdrew her campaign to seek the Conservative nomination in the next federal election over Prime Minister Stephen Harper's turnabout on equalization.

In court documents used for the search warrant, Elections Canada argued the Conservative Party of Canada used the transfers to exceed spending limits by more than $1 million.