OTTAWA — Liberal leadership hopeful Joe Volpe has received $54,000 in donations from two drug company executives and their wives and kids.

Under a new political financing law that went into force in 2004, corporate donations to leadership contestants are strictly prohibited. But while a company cannot contribute money to a campaign, individual Canadians including a company's executives, employees and family members are each entitled to give a maximum of $5,400.

When the law was introduced, critics argued it amounted to a loophole that would allow companies to circumvent the ban on corporate donations.

According to a statement of contributions filed by Volpe with Elections Canada, Barry Sherman, CEO and chairman of generic drug manufacturer Apotex Inc., donated $5,400 to the Toronto MP's leadership bid.

Sherman's wife, Honey, and four children - all residing at the same address - also gave $5,400 each.

Apotex president Jack Kay, his wife, Patricia, and two children donated $5,400 each as well.

According to Apotex public affairs director Elie Betito, four of the six children listed as donors are teenagers.

Neither Sherman nor Kay's affiliation with Apotex is mentioned in the statement.

Betito refused Friday to comment further on the donations. He agreed to see whether Kay or Sherman would comment, but by late Friday neither executive had called back.

Volpe campaign spokesman Corey Hobbs said "all donations are in full compliance with the Canada Elections Act and with Liberal party guidelines."

Similarly, Steven MacKinnon, the Liberal party's national director, said he saw "nothing particularly untoward" about the donations.

"On the surface, there's certainly nothing illegal at all."

An Elections Canada spokeswoman declined to comment on the donations other than to say that any complaints should be filed with the elections commissioner.

To guard against companies trying to bypass the ban on corporate donations, the law includes several clauses making it a crime for any individual to "act in collusion" with others to circumvent the donation limits and prohibitions.

Among other things, it is illegal to conceal the identity of donors, to compensate a person for making a donation, or to make a donation that actually comes from another person.

However, Chief Electoral Officer Jean-Pierre Kingsley has complained that he has few powers to verify or investigate financial returns from leadership candidates, who are not required to produce bank statements or supporting documents.

Volpe is one of 11 leadership contenders in the Liberal race, which culminates Dec. 3 in Montreal.

Early in the contest, critics complained about another loophole in the political financing law that allows contenders to lend themselves unlimited amounts of money or to receive hefty loans from companies, banks, family or friends.

Some candidates feared this would give an advantage to monied contenders like Belinda Stronach, who ultimately decided not to run.

Elections Canada and the Liberal party said there's nothing wrong with taking out loans, provided they are repayable at a commercial rate of interest within 18 months. The law governing donation limits would apply to any money collected to pay off the loans.

Bob Rae, the former Ontario NDP premier, has received a $100,000 loan from his brother, Power Corp. executive John Rae.

Rookie Toronto MP and renowned academic Michael Ignatieff has received two loans totalling $125,000 from his campaign director Ian Davey, son of former senator Keith Davey.