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Penashue also repaid $30,000 in “ineligible” campaign donations from his 2011 campaign. But Penashue said he will run in a byelection to regain his seat.

Penashue has been dogged by allegations of campaign finance irregularities over his May 2011 election, in which he beat Liberal MP Todd Russell by 79 votes. When questions about his finances surfaced last year, a spokesman for Penashue blamed an “inexperienced” campaign official.

On Thursday, Penashue confirmed that an examination showed his campaign accepted ineligible donations.

“Due to mistakes that were made by an inexperienced volunteer in filing the Elections Canada return from the last campaign, I appointed a new Official Agent to work with Elections Canada to make any needed amendments to my campaign return,” Penashue said in a statement. “During the examination we became aware that there were ineligible donations accepted by the former Official Agent.

I must be accountable to the people who elected me

“Although I was unaware of the inaccuracies in the return, I believe I must be accountable to the people who elected me and therefore I am stepping down as the Member of Parliament for Labrador and will seek re-election through a by-election.”

After the 2011 election, the former official agent, Reginald Bowers, was appointed by the federal government to the Canada-Newfoundland and Labrador Offshore Petroleum Board, which regulates the oil sector.

Bowers resigned from the board late Thursday.