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Joe Volpe is one of eight candidates running for the leadership of the federal Liberal party. ((Tom Hanson/Canadian Press))

The federal Liberal leadership race has again been rocked by controversy after a weekend report alleged candidate Joe Volpe used taxpayer moneyfor his campaign.

Volpe called the latest allegations "a total act of fiction," saying they are another attack on his integrity.

"I find myself constantly addressing that issue. It's always done by innuendo," he said. "And I just want to put it on the table that I'm not oblivious to these kinds of observations."

The Toronto Star on Sunday reported that a federally funded non-profit charity rounded up and paid seven of its clients to work on the Volpe campaign for the leadership of the Liberal party.

The report alleges the Ottawa-based Career Foundation issued cheques to the seven clients, who worked for the Toronto MP during the recent Super Weekend delegate vote.

Volpe's campaigndenies the charges. His spokesperson told the newspaper that theorganization had planned to pay the workers and was processing an invoice from the charity.

Party members discuss allegations

The issue was a hot topic of debate among Liberals attending the final candidates debate at Toronto's Roy Thompson Hall on Sunday.

Lifelong Liberal party member Cathy Hughes says she's fed up with Volpe.

"Step all the way out. He's embarrassing," she said. "Leave the race, for sure, but I wouldn't be upset if he left the party altogether."

Well-known musician Ashley McIsaac, also a Liberal, says Volpe should remain in the race.

"I don't think politics is a business where you step down over a mishap that may or may not have been your responsiblity," said the Cape Breton fiddler. "There's other people involved."

It's not the first time Volpe has made headlines for alleged campaign irregularities. Two weeks ago, the Liberal party fined the Volpe campaign $20,000 for paying for party memberships in a Montreal riding.

He was also forced to return $27,000 in donations from the children of current and former drug company executives.

Volpe trails well behind the leaders in committed delegates.