Conservative candidate Peter Penashue went for the jugular during a federal Labrador byelection debate Tuesday night, while accusing his Liberal rival of ripping off taxpayers while she sat in Newfoundland and Labrador's legislature.

In the final minutes of an otherwise quiet debate, Penashue — who was forced to resign his Labrador seat in March amid an Elections Canada investigation into his 2011 campaign — accused Yvonne Jones of "double-dipping" in her expense claims.

"She had robbed, well, took your money, the taxpayers — tens of thousands of dollars of which she would not pay back," Penashue told a Happy Valley-Goose Bay debate sponsored by VOCM News.

"They had to garnish her salaries."

Jones, a 16-year veteran of provincial politics who resigned her seat to run for the Liberals in the May 13 byelection, was evidently flabbergasted by Penashue's accusation.

"Absolute lies and you know it's lies," Jones called back as Penashue spoke.

"I'm not going to stand here and let him tell lies."

Jones one of 88 politicians named in audit

Penashue's claim was evidently based on a 2008 audit of spending of the house of assembly, which found that 88 members of the house — including former premier Roger Grimes — had mistakenly submitted claims more than once for the same expense over a number of years.

Jones, who represented the coastal Labrador district of Cartwright-L'Anse au Clair, had total double billings of $12,167. The report noted that Jones had agreed to repay the money, including through biweekly deductions.

The audit, by former auditor-general John Noseworthy, came about two years after explosive revelations that found that five politicians from three parties had made fraudulent expense claims that would later pull all four of them behind bars. Noseworthy's investigations also led to criminal convictions and a prison sentence against Bill Murray, the bureaucrat who handled MHAs' expense claims.

Speaking later with reporters, Jones underscored that the subsequent investigation on double claims suggested no such wrongdoing as the prior scandal.

"Did I do anything wrong or anything of a criminal nature or anything that was unethical? Absolutely not," said Jones.

Yvonne Jones accused Penashue of spreading 'absolute lies' about her citation in a 2008 audit. (CBC)

During the debate, Jones told Penashue that her record as a legislator was clean, and that she had served on committees that governed legislative finances.

"If there was anything illegal about that, I would not have been in those positions," she said.

The skirmish left New Democrat Harry Borlase on the sidelines for the debate's finish, although he said he was not impressed by the politicking.

"This isn't about slandering. This is about getting the job done," Borlase said.

"There needs to be a changing of the guard. There needs to be a new perspective. As you've seen here tonight, we're not moving forward — we're moving backwards."

Housing costs

During the debate, Borlase said he wanted to focus on skyrocketing housing costs in places like Happy Valley-Goose Bay, and environmental concerns that threaten local habitat.

Penashue, a former minister of intergovernmental affairs, told the debate audience he has every expectation of being appointed back to cabinet if he wins the byelection.

He said a pending decision on the future of 5 Wing Goose Bay, the air base that employs hundreds, may hang in the balance if he is not among the ministers who are there to debate it.

"It's absolutely important that I am at the cabinet table," Penashue said.

Jones called Penashue's statement an example of "blackmail" to pressure voters, and claimed that the Conservatives had been using "desperate tactics" over the future of the base since making a promise in 2006 to beef up the military presence there.