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The chief financial officer (CFO) for Jeff Callaway’s UCP leadership campaign may be facing jail time, a major fine or both. The development comes as the Alberta election campaign heats up.

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The Office of the Election Commissioner (OEC) is investigating the leadership campaign amid allegations Callaway ran as a kamikaze candidate to take down Jason Kenney’s biggest opponent Brian Jean. Court documents, dated March 21, 2019, reveal the OEC believes CFO Lenore Eaton broke election rules surrounding financial payments.

The documents state Eaton was also CFO of Energize Alberta Corporation, which is a prohibited entity, during her time as CFO of the Callaway campaign. Prohibited entities are not allowed to make contributions to a leadership contestant or campaign.

Findings by the OEC reveal Eaton signed cheques from Energize Alberta Corporation for two people who worked for the Callaway leadership campaign.

“As CFO for the Jeff Callaway campaign, and acting on behalf of Jeff Callaway, you accepted a contribution in kind from Energize Alberta Corporation for the services performed” by the two employees, the court document states.

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Eaton also did not disclose the contributions to the Callaway campaign to the OEC, the documents reveal.

‘Withheld the truth’

The investigation further found Eaton “withheld the truth about this entity” and her role with Energize Alberta Corporation during interviews with the OEC.

Eaton initially stated she did not know what Energize Alberta Corporation was and stated the corporation was not connected at all with the Callaway campaign.

The OEC said it will decide on an appropriate penalty after considering all the information obtained during its investigation and giving Eaton an opportunity to respond.

Eaton could face a maximum fine of $50,000, less than two years of jail time or both. She has not yet filed a response to the OEC’s letter but has until April 19 to do so.

“Ms. Eaton has unfortunately been included in an investigation in which she was unaware of any wrongdoing,” reads a statement sent to Global News by Cory Wilson, Eaton’s lawyer.

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“She has been cooperative throughout the investigation and continues to comply with her obligations under the legislation. Despite the initial findings of the Commissioner, which were recently made public, I am confident that Ms. Eaton will be completely exonerated once the investigation is complete.”

‘Kamikaze campaign’

Throughout the campaign, Kenney has denied his involvement in the so-called kamikaze campaign.

But emails released to local media, including Global News show ongoing contact during the 2017 leadership race between the Kenney and Callaway campaigns, including Kenney staffers providing strategic direction, attack ads, speaking notes, speeches and media support to the Callaway campaign.

READ MORE: Kenney confirms UCP lawyer is speaking to RCMP about 2017 leadership race, says he’s certain no rules were broken

The RCMP have confirmed they are looking into irregular campaign donations made to the Callaway campaign. In late March, Kenney said a UCP lawyer had reached out to the RCMP. The commissioner has already issued some fines for illegal donations to Callaway’s campaign.

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READ MORE: New fines levied by Alberta election commissioner related to Callaway’s UCP leadership bid

On Wednesday, a Calgary judge denied an injunction that would have postponed an investigation into the UCP’s leadership race until after Alberta’s April 16 provincial election.

Watch below: Ongoing Global News coverage of the UCP leadership race

With files from Phil Heidenreich, Global News and The Canadian Press.

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