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OTTAWA (Reuters) - In an embarrassing development for the Conservative government, four senior party officials have been charged with violating financing rules during the election campaign that brought it to power in 2006.
The Commissioner of Canada Elections, the nonpartisan officer who is responsible for ensuring compliance with federal election rules, is also bringing charges against the Conservative Party itself.
The news broke ahead of what many political observers expect will be an election early this year. The minority government needs the backing of at least one opposition party to pass key legislation, such as next month's budget, and that is far from certain. Should the budget be defeated, a new election would be called immediately.
Polls indicate the Conservatives would retain power if an election were held now, albeit with another minority.
Elections Canada, the overall body supervising federal elections, said in a statement on Friday the four officials had willfully broken the $18.3 million spending limit placed on political parties during federal campaigns.
The agency contends the party had illegally assigned national advertising expenditures to local candidates, who have their own separate campaign spending accounts. In 2008, police raided Conservative headquarters looking for evidence.
In a civil case last year regarding these advertising expenditures, the Federal Court ruled that the local Conservative candidates had not broken election financing rules, but Elections Canada is appealing the ruling.
Finance Minister Jim Flaherty, asked about the story in a news conference in Halifax, played down what he termed "administrative charges."
Querying why the Conservatives had been singled out, he said: "Our party followed the same steps as the other political parties."
In fact, anyone found guilty of the latest charges could face jail time. The current charges are being laid under the Canada Elections Act, and the first court hearing will be on March 18.
"They don't fall under the criminal code, but they are certainly not 'administrative'," said Dan Brien, spokesman for the Public Prosecution Service of Canada.
Prime Minister Stephen Harper has since appointed to the Senate two of the four campaign officials who were named on Friday.
The Liberal Party said the charges were the latest sign of scandal in a government that won power promising to be more accountable.
"This is a million-dollar scam. It's not small potatoes," Liberal leader Michael Ignatieff charged in a news conference on a campaign-style swing he was making in the Toronto area.
Reporting by David Ljunggren and Randall Palmer; editing by Rob Wilson