Elections Canada has laid charges against the Conservative Party and four of its members, including two senators, over alleged violations of election spending rules.

As reported Thursday by CBC News, the charges were laid under the Canada Elections Act on Wednesday and relate to the so-called "in-and-out" campaign financing case from the 2006 federal election. The charges are regulatory, not criminal.

The charges, published on Elections Canada's website Friday, include allegations that Conservative election expense documents submitted to Elections Canada were "false or misleading."

Charged are:

• Senator Doug Finley, the party's campaign director in 2006 and 2008, and the husband of Human Resources Development Minister Diane Finley.
• Senator Irving Gerstein, a prominent businessman and fundraiser for the party.
• Michael Donison, a former national party director.
• Susan Kehoe, who has served as an interim party executive director.

Gerstein was appointed to the Senate by Prime Minister Stephen Harper in December 2008. Harper appointed Finley to the Upper Chamber in August 2009.

Harper said Friday the charges were part of a dispute the party has been having with Elections Canada for five years.

"Our position's been very clear. We respected the rules that were in place at the time," Harper told reporters in Val-d'Or, Que.

"We've been repeatedly in court about this. The courts to this point have ruled in our favour," Harper said, referring to a court decision last year that Elections Canada is appealing.

"When Elections Canada changed its interpretation of the rules after that election, we changed our practices to conform with their new rulings. But obviously we can't change things retroactively. So all of these individuals acted according to the rules that were in place at the time."

'Very serious'

Liberal Leader Michael Ignatieff said Friday the charges against four of the most senior members of Harper's campaign team are "very serious violations of Canada's election laws."

"It's pretty obvious that in Mr. Harper's Conservative Party, nothing happens without the approval of the prime minister. So this goes right up to the prime minister," Ignatieff told reporters in Oakville.

"And when you add to the fact that this is a government that has a minister who mis-led the House and is still in her job, when you add to the fact that this is a prime minister who's shut down Parliament twice, you begin to get a disturbing pattern of disrespect for our democracy."

Ignatieff was referring to International Co-operation Minister Bev Oda's recent explanation of an altered document that denied funding to foreign aid agency Kairos, and to the prime minister's decision to prorogue Parliament twice in recent years.

"This is a prime minister who thinks he makes the rules and now he's been found accused of breaking the rules. And I think the question of fundamental respect for our democracy is going to be a basic issue in an election, whenever it comes," said Ignatieff.

In-and-out

Elections Canada has alleged that the Conservative Party broke the spending rules during the 2006 election campaign by improperly reporting $1.3 million in national advertising as an expense that was shared by 67 Conservative candidates.

Elections Canada said the party violated the rules by moving funds in and out of local ridings to pay for national ads, allowing the party to breach the cap and for the candidates to claim rebates on expenses that weren't actually incurred.

The Conservatives took the issue to the Federal Court and won. Elections Canada appealed that decision. That appeal is still pending, but in the meantime, Elections Canada has laid these charges.

'False or misleading'

Two of the charges allege the party and its fundraising arm under Gerstein "did provide the Chief Electoral Officer with a return on the general election expenses of the Conservative Party of Canada ... that they knew or ought reasonably to have known contained a materially false or misleading statement, namely that all election expenses in respect of the 39th federal general election had been properly recorded."

The maximum penalty under the Act for each of those charges is a $25,000 fine.

The other charges, against the Conservative Fund and the four individuals and against the Conservative Party, relate to exceeding the election spending limits. The maximum penalty for each of those charges is a $2,000 and a year in prison.

The Conservative Party is "not surprised, but disappointed" by the charges, Conservative sources told CBC News Thursday. They say Elections Canada has been pushing for charges for more than two years, and they question the value of laying of them while an appeal is pending.

The proceedings from the charges are due to be heard in Ontario provincial court in Ottawa on March 18.