Liberal Party removes Ruby Dhalla as leadership contender over campaign irregularities

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The Liberal Party has disqualified leadership candidate Ruby Dhalla over campaign-finance irregularities, the party announced Friday.

In a statement, the party’s national director Azam Ishmael said the leadership vote committee determined that Ms. Dhalla’s campaign had committed 10 violations of Liberal leadership electoral rules and expenses.

“The violations include concerns about alleged violations of the Canada Elections Act, certain other election finance matters, non-disclosure of material facts, and inaccurate financial reporting,” he said in a statement.

Mr. Ishmael said the committee considered the violations to be “extremely serious” and raised their concerns with the party’s chief electoral officer, Beatrice Keleher-Raffoul, who recommended the Liberals disqualify Ms. Dhalla. The committee vote was unanimous.

Ms. Dhalla has denied any wrongdoing. She told The Globe and Mail she had a meeting with party officials early Friday afternoon and insisted she did nothing improper.

“I said all these irregularities are all made up. They are fictitious. We have provided all the information to rectify each and every irregularity,” she said in an interview.

Liberal Party, Ruby Dhalla at odds over whether questions about campaign are related to foreign interference from India

She said the party raised concerns about six couples who used the same credit card to donate to the campaign as well as volunteers who also worked for the Dhalla Group of Companies, of which she is CEO and president. The couples share joint bank accounts and the volunteers signed affidavits declaring they are not being paid by Ms. Dhalla to work on her campaign, she said.

Ms. Dhalla said another issue involved $21,000 of withheld deposits because the “Liberal Party changed the link to those contributions. I can’t control what donors are doing.”

Ms. Dhalla said the Liberal Party also wanted the bank accounts of third-party vendors, which she provided to “prove I have nothing to hide. I also gave them my cellphone records. I have nothing to hide.”

The party did not invoke inappropriate foreign interference to disqualify her because, as one source said, it’s not an issue the party could pursue and substantiate. The Globe and Mail is not identifying the source who was not authorized to speak publicly.

However, CBC News reported that Ms. Dhalla was accused of failing to disclose the involvement of a non-Canadian citizen in her campaign, which the party alleges would amount to foreign interference if it happened during an election period.

The Globe reported Thursday, citing two Liberal sources, that the party sent questions to Ms. Dhalla that raised concerns about possible foreign interference and alleged campaign irregularities.

Ms. Dhalla was provided with 27 questions on Monday and given a deadline to respond, said the two sources, whom The Globe is also not identifying because they were not authorized to speak about internal matters.

In social-media posts Thursday, Ms. Dhalla suggested that the party has been trying to link her campaign to foreign interference. In the interview with The Globe Friday, she said the party backed off those allegations.

“One day they are going all guns blazing on foreign interference and at the end of the day when there is none, they back off of it. Now they are on campaign irregularities,” she said. “There are a lot of people out there [in the South Asia community] who are well-wishers, wanting to give advice and suggestions and that does not mean that it is foreign interference,” she said.

The sources told The Globe that there were also allegations of backroom involvement in her campaign by conservatives such as Brampton Mayor Patrick Brown, a former Conservative MP and Ontario party leader. In a statement Thursday, Mr. Brown said he had been approached by multiple Liberal leadership candidates to help out in their campaigns but declined.

One of the sources said Liberal Party lawyer Alexis Levine questioned why six couples donated to the campaign using the same credit card. The party asked the 12 individuals to sign attestation forms that they have joint bank accounts, the source said.

The move to disqualify Ms. Dhalla comes as the four remaining leadership candidates – former central banker Mark Carney, ex-finance minister Chrystia Freeland, former House leader Karina Gould and ex-MP Frank Baylis – face off in separate French and English debates on Monday and Tuesday.

In January, Liberal MP Chandra Arya was barred from running for the leadership. The party did not say why Mr. Arya was disqualified, but pointed to Liberal Party rules that say candidates can be banned owing to “public statements, past improper conduct, a lack of commitment to democracy, or other reputational or legal jeopardy.”