Peter Penashue blames agent, says he's surprised by spending allegations

ST. JOHN'S, N.L.--A promised update on campaign spending from embattled federal Intergovernmental Affairs Minister Peter Penashue turned out to be an online letter repeating the Conservative message track in his defence.

In an open letter to constituents posted on his MP website Tuesday, Penashue puts the blame squarely on Reginald Bowers, his former campaign manager. It's the same response used by Prime Minister Stephen Harper and other senior Conservatives in recent months since Elections Canada auditors flagged about $4,000 in overspending.

Since then, Penashue has also been accused of accepting thousands of dollars in free flights around his riding along with a questionable donation from a construction company in St. John's during last year's election.

"As official agent, Reg was responsible for administration and bookkeeping," says Penashue's letter. "I focused on campaigning across this massive riding and meeting the people of Labrador.

"I was very clear during the campaign that we would follow the rules. I specifically indicated that, in accordance with the law, we could not accept corporate donations. I was not aware of any problems or irregularities during the campaign.

"No one is more surprised than I am at the allegations that have arisen since the campaign. No one is more disappointed. That's why there is a new official agent in place to examine all of the paperwork and to work with Elections Canada to correct any mistakes."

That appears to be the extent of an update to constituents that Penashue promised last week in Ottawa.

Penashue was travelling the remote southern Labrador coast on Tuesday to hand out Queen's Diamond Jubilee medals for community service in Port Hope Simpson. Neither he nor his spokesman Cory Hann could be reached by email or cellphone.

Penashue has been attacked for weeks in the House of Commons, but Harper has shrugged off calls for his resignation.

Bowers was later named by the federal government to the Canada-Newfoundland and Labrador Offshore Petroleum Board which regulates the oil sector. He has not returned messages seeking comment.

Margaret Burden, a businesswoman and community volunteer who owns the Alexis Hotel in Port Hope Simpson, was one of the Queen's Diamond Jubilee Medal recipients Tuesday.

She said the ceremony should be about recognizing public service, but that Penashue also needs to clear the air with voters.

"I feel that he has to be forthcoming and give people what they're looking for," Burden said from Port Hope Simpson. "If it was a bad thing, then explain it and apologize. If it wasn't, if it was errors on someone else's part, well do that too. But please don't avoid the questions that are being asked because it's becoming like a snowball. It's just gathering speed as it goes."

Penashue has much to offer Canada and Labrador, Burden said.

"But I feel that this is a very negative thing in his life at this particular time, and I know it's difficult for someone to come out and even address it. But I feel that, the gentleman that he is, I'm sure that he will at some point in time make a public address and let the people know.

"Life would be a lot better for him and he'd be able to get on with doing what he does best, which is represent the people of Labrador and represent Canada in his portfolio."

Penashue's surprise victory by just 79 votes over Liberal incumbent Todd Russell was the only Conservative win in the province.

Penashue has said he won't step down despite calls from the opposition for a byelection and accusations that he "bought" the election.

Russell said constituents who were anticipating answers seem to have been treated to a public relations stunt.

"Obviously there's no disclosure and there's no new information," he said Tuesday in an interview. "This seems to be a very poorly done publicity piece. Giving out Queen's Jubilee medals is part of your regular business.

"It's not what the constituents were expecting and certainly not what they deserve. What they deserve is full disclosure, full accountability and full responsibility being taken for what happened."

Russell said Elections Canada must do a thorough investigation on the ground in Labrador, "and not just a review of the returns."

The minister has also been under siege for travel expenses and the extent to which he has visited other parts of Canada in his cabinet role.

A list published by his department shows 79 per cent of Penashue's ministerial travel has been in his home province of Newfoundland and Labrador, even though he's the intergovernmental affairs minister responsible for managing federal relations with all provinces and territories.