The Ontario Provincial Police are investigating a sworn affidavit claiming one of Prime Minister Stephen Harper's closest advisers was allegedly involved in a bid to buy off a candidate in Ottawa' recent municipal election.

Terry Kilrea ran for Ottawa mayor in 2006, but eventually dropped out. After the election, Kilrea claimed that winning candidate Larry O'Brien offered to cover his campaign expenses if Kilrae dropped out.

Kilrea also said O'Brien promised to arrange to have him appointed to the National Parole Board. In an affidavit, Kilrea names Reynolds as the federal contact who would help carry out that plan.

"I asked how my name would be put in the queue for the National Parole Board, and it was related to me that John Reynolds had arranged it," Kilrea told CTV News on Monday from his home in Ottawa.

If true, such an arrangement would amount to a possible breach of the Criminal Code as well as the Ontario Municipal Elections Act. But none of the allegations have been proven in court, nor have they resulted in any charges.

Reynolds says the story simply isn't true.

"I didn't arrange anything for Mr. Kilrea," Reynolds told Canada AM Tuesday. "I don't know him. if i was to bump into him, i wouldn't know who he was. i don't remember even discussing him with anybody, so I don't know where he would get that from."

Kilrea admitted to CTV that he has never spoken directly to Reynolds. "He probably wouldn't know me if he stepped over me," Kilrea said.

In his affidavit sworn out on Dec. 20, 2006, Kilrea alleges he was offered the parole board job during a meeting last summer with O'Brien at a coffee shop.

"At approximately 2 p.m. later that day (July 5, 2006), O'Brien called to advise that my name had been put forward for an appointment to the National Parole Board,'' says the affidavit.

"When I asked how this was possible, he responded that he had spoken to John Reynolds. He then instructed me to call John Baird, President of the Treasury Board, and to tell him that my name 'was in the queue' for an appointment to the board.''

Kilrea says he then emailed Baird, but was told by the Treasury Board president that he knew nothing about the matter.

Kilrea also claims that on July 19, O'Brien told him over the phone that the "offer 'would not be on the table forever'" and that he "needed to make a decision."

The former mayoralty candidate did not file the complaint that sparked the Ontario Provincial Police investigation. It was filed by the Ottawa and District Labour Council.

O'Brien has rejected allegations that he tried to pay off Kilrea to leave the race. He told reporters today that he is "delighted" by the news that an investigation has been launched, saying he trusts it will be completed in a "timely manner."

"It's an old story that keeps popping its ugly head up, and let's get some clarity and some finality to it," he said. "At first I ignored it, but if this keeps popping up I don't think the citizens of Ottawa want it; I don't want it. So I welcome this."

Reynolds, a former Tory MP who co-chaired the Conservative campaign in the last federal election, acknowledged he has a close friendship with Larry O'Brien. But he said he has no idea how his name became linked to the investigation.

"To me, why my name is in this -- it's taking time out of my very busy business schedule now to answer these things publicly but i find it very strange. but you know, in politics these things happen," Reynolds told Canada AM.

He adds that he hasn't yet spoken to the OPP about the matter but expects to soon.

"Because of the fact (allegations have) been made against me, they'll want to talk to me quickly and they'll find out it didn't happen, and I would expect that would end the investigation, from my point of view," Reynolds told CTV News.

Reaction

Opposition members were quick to pounce on news of the allegation. Liberal MP David McGuinty said the allegation reminds him of a $50,000 payment the Tories made to former candidate Allan Riddell -- to persuade him to abandon his 2006 candidacy in favour of Alan Cutler, a star Conservative candidate in the Ottawa South riding.

"I think it's a very serious matter," McGuinty told reporters outside the House of Commons.

"The prime minister denied there was ever such a deal until the Superior Court of Justice ordered his Chief of Staff, after that Chief of Staff declined three times to show up and testify and tell the truth."

McGuinty also alluded to documents suggesting the Canadian Alliance and the Opposition Leader's Office paid MP Jim Hart to quit politics early, in order to free up a seat in the House of Commons for leader Stockwell Day in 2000.

Kilrea's claim that O'Brien offered expense money to him was previously reported last fall. But the story died when Kilrea refused to publicly call the offer a bribe.

The issue came back into the spotlight when Kilrea's sworn affidavit fell into the hands of the Ottawa District Labour Council.

Sean McKenny, the labour council's president, said after getting a copy of the affidavit he became concerned that "the biggest piece" of the alleged offer had not been disclosed in media reports.

"We're following the direction, as we understood it, of the attorney general (of Ontario) and that is to drop a package off with the chief of police here in the city,'' McKenny told the Canadian Press.

"At the end of the day, people should know: either yes or no. That's what we're trying to push for here."

With a report from CTV's David Akin in Ottawa and files from The Canadian Press