Liberal operatives Patricia Sorbara and Gerry Lougheed appear to have broken provincial bribery laws, Elections Ontario ruled Thursday, when they offered former candidate Andrew Olivier a job in exchange for quitting the recent Sudbury by-election race.

But despite that finding, Premier Kathleen Wynne refused to force Ms. Sorbara, her deputy chief of staff, to step aside. She will also allow Mr. Lougheed, a Sudbury businessman and Liberal fundraiser, to remain chair of the local police board.

Chief Electoral Officer Greg Essensa called his ruling "unprecedented," saying Elections Ontario has never before found anyone to have violated bribery rules.

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"Having reviewed the evidence and findings from this regulatory investigation, it is my opinion that the actions of Gerry Lougheed Jr. and Patricia Sorbara constitute an 'apparent contravention' of … the Election Act," he said in a statement.

The province's chief prosecutor, James Cornish, has forwarded the matter to police and called in federal prosecutors to handle the file, a spokesman for the Ministry of the Attorney-General said. The police and prosecutors will decide whether to lay charges.

The Elections Ontario report added fuel to the firestorm that has engulfed the Liberals for the first week of the new legislative session and reached the highest levels of government. Ms. Sorbara is one of the Premier's top advisers, and also serves as Liberal campaign director, head of the party's election machine. Ms. Wynne is set to be questioned by the Ontario Provincial Police as part of a separate criminal investigation into the scandal.

In the daily Question Period, just moments after Mr. Essensa's ruling was made public, the Premier repeatedly insisted Ms. Sorbara and Mr. Lougheed had done nothing wrong.

"Any suggestion that anything was offered in exchange for any action is false. That has not changed, and that will not change," Ms. Wynne said, as MPPs from all parties heckled each other across the aisle.

She added the government will take the report "under consideration."

The Premier has maintained Ms. Sorbara was acting in her capacity as a party operative, not a government official, during her talks with Mr. Olivier. But her office would not say whether Ms. Sorbara was on leave from her government duties last December when she spoke with Mr. Olivier, or whether public funds had been used to send her to Sudbury during the by-election.

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The Progressive Conservatives and New Democrats spent an entire raucous hour grilling the government on the scandal in the legislature.

"You, yourself, said in your Throne Speech that you were going to have an open and transparent government. You were going to do politics differently," PC House Leader Steve Clark thundered at Ms. Wynne.

Added NDP Leader Andrea Horwath: "When will [the Premier] make sure that she does the right thing and remove these people from their responsibilities because they no longer have the public trust?"

Ms. Sorbara and Mr. Lougheed are accused of trying to entice Mr. Olivier, a Sudbury mortgage agent, to give up his bid for the Liberal nomination so Glenn Thibeault, then the federal NDP MP for the area, could defect to the Liberals and get the nomination unopposed.

Mr. Olivier recorded his conversations with Ms. Sorbara and Mr. Lougheed and posted them to Facebook.

In one tape, Ms. Sorbara gave Mr. Olivier a list of possible government positions, including "a full-time or a part-time job at a constituency office" or "appointments to boards or commissions."

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Mr. Lougheed, meanwhile, told Mr. Olivier he could get a "reward" for dropping out of the race.

"We would like to present to you options in terms of appointments, jobs, whatever," he said.

Mr. Thibeault ultimately won the by-election for the Liberals earlier this month.

On Thursday, Deputy Premier Deb Matthews said all parties have discussions with potential candidates like the one Ms. Sorbara had with Mr. Olivier. The only difference, she said, is that this one was made public.

"Those conversations do happen," she told reporters, later adding: "This one was tape-recorded … so the public has seen something they haven't seen in the past."

The Greater Sudbury Police Services Board voted at a closed-door meeting last week to have Mr. Lougheed, who represents the province on the board, continue as chair.

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In a statement, board members said they kept Mr. Lougheed in office because the bribery allegations do not concern his role with the board.

There is precedent for government officials to step aside during legal entanglements.

Former finance minister Greg Sorbara, a cousin of Ms. Sorbara's, resigned in 2005 when he was named in an RCMP search warrant for his family's company. When he was cleared several months later, Mr. Sorbara resumed his job.