Elections Canada paid out more than $100,000 to Conservative riding associations before the party's so-called "in-and-out" scheme was discovered, a CBC News investigation has found.

Elections Canada paid out the expense claims of 17 "in-and-out" participants before noticing something was amiss, it says in court documents.

That meant more than $100,000 in taxpayer dollars going out the door before it was stopped.

Four high-ranking Conservatives, including two Senators, are charged under the Elections Act with moving more than a million dollars through local ridings to help fund the national campaign.

Conservative MP Steven Blaney says he and all the other candidates who participated were following the rules.

Court documents show Blaney's 2006 election campaign was one of those that received money from the national party, transferred it immediately back, and then claimed the money as part of its election expenses.

A comparison of Elections Canada documents and the ones filed in court reveals Blaney's campaign received $18,000 more in reimbursements than it was entitled to. Blaney says his campaign did nothing wrong.

"There is a difference of interpretation of the law between Conservatives and Elections Canada," he said.

Elections Canada reimburses all candidates 60 per cent of their eligible expenses if they meet a certain threshold of votes. The money comes from the public purse.

Riding reimbursed more than it spent

Another riding that appears to have received some of that money is the Conservative riding association in Hull-Aylmer, Que.

That association spent only about $12,000 of its own money in the 2006 election, according to numbers from Elections Canada, but received almost $34,000 in reimbursements because of the "in-and-out" tactic.

David Herle, the Liberal campaign director in 2006, says the $1.5 million extra the Conservatives spent could have changed the outcome of a close election.

"I don't know if it was decisive. It was influential," Herle told CBC News.

"They clearly intended it to be influential or they wouldn't have done it. If they didn't think it would have made any difference, they wouldn't have gone to such great lengths."

Andre Thouin, an official with Elections Canada, knocks on the door of Conservative Party Headquarters of Canada in Ottawa on April 15, 2008, during an RCMP raid of the office. (Tom Hanson/Canadian Press)Pierre Poilievre, parliamentary secretary to the prime minister, says all the parties use the same strategy.

"The national party did indeed transfer funds to local campaigns, which is legal, ethical and commonplace among all political parties," he said in the Commons last week.

But the NDP's national campaign director says in those cases the money goes from national to local and then stops.

"That money then should be spent on local projects and that is not the case with the Conservatives. But that was the case with the New Democrats. That's why we're not up on charges," Brad Lavigne said.

Beyond a leg-up in the 2006 campaign, the "in-and-out" scheme may have helped the Conservatives in the next one as well.

All candidates who get at least 10 per cent of the vote are entitled to the 60 per cent reimbursement of election expenses.

For some campaigns, the scheme could have been quite lucrative, landing them taxpayer funded reimbursements worth thousands of dollars more than Elections Canada says they actually spent — a surplus that could be retained by the riding association for the 2008 election.