A Progressive Conservative MHA from Newfoundland and Labrador called on federal Intergovernmental Affairs Minister Peter Penashue to step down from cabinet Friday.

Penashue is facing allegations of improper campaign spending and donations. As well, there are questions about his ministerial travel.

"There's no doubt he's in trouble," St. John's West MHA Dan Crummell told CBC's David Cochrane during the On Point Radio program Friday afternoon. "He needs to do the honourable thing, he really does."

Crummell said the honourable thing would be for Penashue to remove himself from cabinet while his campaign spending issues are being investigated.

"It's a very, very serious matter, and it definitely reflects on all politicians," Crummell said.

"We really need to have integrity in mind for all politicians that run for public office."

But within a couple of hours of making those comments, Crummell appeared to step back from them in an email to CBC News.

"It is important that the interests of Newfoundlanders and Labradorians continue to be represented in the federal cabinet," Crummell wrote. "I was unaware that a new official agent was appointed to work with Elections Canada to address any errors which have been made. It is certainly appropriate to let this process take its course."

CBC first reported that Penashue had a new official agent on Oct. 29.

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Parliamentary Secretary Dan Crummell says allegations against Penashue reflect badly on all politicans. (Dan Crummell)

Crummell's comments came as the provincial government is finalizing details of a federal loan guarantee for the Muskrat Falls hydroelectric project.

Parliamentary questioning

The MP for Labrador has faced weeks of questions in the House of Commons since CBC News reported a local airline wrote off about $17,000 charged to his campaign.

Had Penashue's campaign paid the bill, he would have gone over the legal spending limit by more than 20 per cent.  

A subsequent story on the possibility of a corporate donation also triggered questions by opposition MPs.  

Corporate donations are illegal in Canada. It's also illegal to make a donation through another person.   Penashue said Tuesday that he would be speaking to his constituents next Tuesday in Labrador.  

Asked by reporters whether he would step down, Penashue said, "I'm not quitting, I'm not quitting."  

"It's very important to me that my constituents understand the allegations and the comments being made."  

CBC News first reported on Oct. 17 that the airline Penashue used in the campaign, Provincial Air, wrote off the bulk of what the campaign owed after Penashue's official agent, Reginald Bowers, said it couldn't afford to pay the full $24,711 cost.  

CBC News also reported last week that a deposit slip found in Penashue's election file shows the campaign recorded a single entry for a donation by Pennecon Ltd., a construction company based in St. John's. The campaign issued receipts for six board members from the company.  

Conservative MP Pierre Poilievre has been taking most of the questions for the past three weeks about Penashue's spending and about the deposit slip.  

After Penashue rose in the House Tuesday to discuss his work as intergovernmental affairs minister, CBC News reported that Penashue has spent nearly $65,000 in travel expenses since joining cabinet in 2011 and that most of the trips paid for out of his ministerial budget involve trips to or within Newfoundland and Labrador to make announcements, take part in government events and meet with "key stakeholders."

Seventeen out of 20 trips in 2011 and 15 out of 20 in 2012 were for travel within the province, according to records released on a government website.  

Penashue spent $21,074.39 in 2011, and $42,784.27 so far this year, in addition to $126,257.63 billed to a separate parliamentary travel budget.    

Penashue hasn't reported a single official visit to British Columbia, Manitoba, Saskatchewan or the territories, although he has made it to all three maritime provinces at least once, as well as Montreal, Quebec City, Toronto and Alberta.