Bay Street no longer matters in Ottawa

Senator Irving Gerstein’s ignored speech reveals the new reality in political fundraising
Kenneth Whyte
Todd Korol / Reuters

Irving Gerstein has a bald round head with a grey fringe at the back and crooked glasses to the front.

He wears pinstripe suits. Not subtle pinstripes. Big thick Al Capone pinstripes. White shirts with dagger collars. Hardware on his lapel like a modern major-general. A pocket square folded in the shape of the Sydney Opera House.

He looks more like an aging bagman than the poster boy for a political revolution.

In fact, he’s both.

Sen. Gerstein and Prime Minister Stephen Harper were the only two members of the Conservative Party of Canada to make substantial addresses at last weekend’s convention in Calgary. Of the two, Gerstein’s was the more enlightening. It was a stunning disquisition on the new cash-flow politics practised by our governing party.

“All political parties,” said the senator, who has been fundraising since the days of Diefenbaker, “require money to operate.”

That’s hardly news but, as Gerstein explained, the way money is collected has changed. Successive Liberal and Conservative governments have rewritten the rules in important ways. Party donations have been capped at $1,200 per person. Government contributions to the parties (on a cash-per-vote basis) are being phased out.

That means a bagman-in-chief like Gerstein can no longer reach his fundraising targets by trolling for massive donations from bank presidents, corporate heads, special interest groups. Nor can he count on taxpayer subsidies to bankroll an election campaign.

“To raise money successfully,” said the senator, “a political party must appeal to Canadians of ordinary means . . . The Conservative party’s fundraising success is built not on the depth of our donors’ pockets but on the breadth of our donor base and that is what the other parties do not understand and why they are lagging behind.”

The opposition is indeed lagging. The Conservatives raised $17 million in 2012, more than the Liberals and the NDP combined and a huge number for a non-election year. It is on track to repeat this feat in 2013 (although the Liberals seem to be catching up). Gerstein and his colleagues have raked in more than $220 million in the last decade. They have $14 million cash in the bank.

They have also spent $7 million on fundraising technology and voter management software. These tools enable the bagman to launch sophisticated campaigns that identify potential supporters and move them “up the support pyramid,” from casual ally to party member to donor.

Conservative fundraising prowess, says Gerstein, has been key to the party’s three consecutive election victories. He was careful not to take all the credit. He shared some with his Prime Minister. And that is where he got profound.

If there is one thing he has learned about raising money, said Gerstein, it is that what comes out of Harper’s mouth determines what falls into the bagman’s boots: “Message creates momentum creates money.”

Think about that for a minute. What Gerstein told the world Saturday afternoon is that the Prime Minister gets to keep his job so long as his message—his policies, stances, decisions—moves Conservative activists to send cheques.

Gerstein stopped short of saying that the government adjusts its message to improve its finances but, come on . . . there’s a majority on the line.

Last summer, an indignant group of 150 Canadian CEOs complained to Ottawa that its approach to wireless competition was bad public policy and harmful to business. It was almost universally acknowledged that the CEOs had a point. Harper blew them off.

One hundred and fifty CEOs may rule Canadian business, but at $1,200 a head they are worth at most $180,000 to Harper. And the PM knows that a lot of those CEOs won’t write a cheque for any cause without getting their names on buildings. So 150 of the biggest, fattest CEOs in Canada wield less clout in Ottawa than any 150 Conservative hotheads in my home riding of Edmonton Centre.

Instead of answering the CEOs or sorting out his wireless policy, Harper launched a website that played on public dissatisfaction (often justifiable) with high prices and poor service in the wireless sector. The site steered traffic to party membership and fundraising pages. No doubt many of the good people of Edmonton Centre contributed.

Bay Street no longer matters in Canadian politics. And it will not matter whichever party is in power so long as the current fundraising rules hold. Gerstein’s logic is unassailable. The contribution cap and the phasing out of per-vote subsidies makes his way the only way to win.

CEOs had better get used to it, and we all need to get used to national parties more interested in capitalizing on problems than in fixing them.

Get used to reams of government policy inexplicable but for its ability to grease the bagman’s gears.

Another example. There was a posse of correctional officers in Calgary on the weekend. One would be forgiven for thinking they were in town to support a Prime Minister who is notoriously tough on crime. Rather, they were protesting the government’s insistence on double bunking convicts.

The guards know that double bunking actually increases violence in prisons. That’s contrary to the PM’s crime-fighting objectives.

But Harper’s interest in public safety is not primarily concerned with meaningful reform. Abusing convicts plays well in Edmonton Centre, makes the bagman’s phone ring, makes another Conservative majority in 2015 that much more likely.

The guards should have stayed home.

The subset of Conservative supporters who write cheques appears to be about 100,000 strong. These individuals are the real powers behind the Harper throne, the current Canadian political elite. They probably wield more clout than the entire Conservative caucus.

It is tempting to deplore their ascendance. But that someone is always paying the piper in our politics. Policies are always warped by influence. Now they’re just differently warped.

Little was reported of Gerstein’s speech beyond a soundbite on the Duffy scandal. No one listens closely to bagmen, however loud their pinstripes. Yet whenever an inexplicable decision emerges from the Harper government, we all search for clues—is it the PM’s faith, his economic beliefs, his advisers, his Alberta roots, his populist leanings?

All of those things inform Harper’s thinking. None explains the inexplicable so well as Gerstein’s law: message = money = mandate.