Stephen Harper's Conservatives have struck a deal with prosecutors to drop embarrassing Elections Act charges against two Tory senators and other party officials accused of "willfully" exceeding spending limits in the 2006 campaign that brought them to office.
It's the latest chapter in a long-running and unprecedented battle between the Conservatives and the country's election watchdog – one the Tories insist is still not over.
The plea bargain spares Conservative insiders such as Senator Irving Gerstein and Senator Doug Finley from facing trial, a spectacle that would have put a very public face on accusations against Canada's governing party of wrongdoing in campaign spending.
The charges dropped carried a maximum penalty of $2,000, or one year in jail, or both.
The Conservative Party and its fundraising arm on Thursday pleaded guilty to lesser charges of breaching campaign spending limits and failing to report all expenses.
They also agreed to pay $52,000 in fines.
But even as they admitted the misstep, the Tories were quick to deny wrongdoing.
"We acknowledge there were some administrative mistakes and we are paying for those through a modest fine," Conservative MP Pierre Poilievre said.
But, he said, "the practice in which we engaged in was legal and ethical."
That's not how prosecutor Richard Roy characterized Thursday's development.
He said the investigation showed "that a political party violated the act," he said.
Elections Canada has long alleged the Tories broke campaign rules through a so-called in-and-out financing scheme: skirting a national campaign spending cap by shifting some advertising expenses to individual candidates in 67 ridings.
The Conservatives have fought Elections Canada over this in a separate civil suit, saying they abided by the rules at the time – and this legal dispute is headed for the Supreme Court after the Tories won leave to appeal in October.
The Conservatives suffered a setback last March when a Federal Court ruled against them in the civil suit, overturning a legal victory the party had argued offered it vindication in the matter.
Back then, the Federal Court of Appeal concluded "it was reasonable" for the Chief Electoral Officer to be dissatisfied with the manner in which the Conservatives reported expenses.
The Tories have argued during the civil suit that the Chief Electoral Office had no authority to refuse rebates to candidates.
The court ruled in March, however, that the Conservatives' interpretation of Elections Canada's oversight powers "would weaken compliance with the limits set by Parliament on the amount of money that candidates may spend on their election and can recover by way of reimbursement from public funds."
Conservative Party spokesman Fred DeLorey celebrated the results of the Thursday plea bargain as a "big victory" because it brought an end to charges that the four Tory officials knowingly exceeded spending limits and deliberately filed false returns.
NDP MP Jack Harris described the Conservative interpretation as a "laughable" revision of the facts.
"They pleaded guilty to spending more than they are entitled to spend and … they also pleaded guilty to filing false claims," Mr. Harris said.
"So how that can be a victory I don't know."
The NDP MP said the only success for the Tories as far as he is concerned is that they managed to delay the plea bargain until after the May 2 federal election.