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Mayor Ford’s business contracts raise question of conflict

Mayor Rob Ford fought for the proposed expansion of Billy Bishop airport at council in April, despite handling the Porter Airlines contract for his family business.

Chris Young/The Globe and Mail

As a councillor and mayor, Rob Ford fought against a ban on plastic water bottles; he helped an Etobicoke businessman get a seat on a city board; and he urged councillors to fast-track a controversial plan to expand Toronto's island airport.

In his other role, as part owner of Deco Labels and Tags, Mr. Ford counted among his clients: bottled-water manufacturers Nestlé Canada and Coca-Cola; an architecture and design company owned by Darius Mosun, who was appointed to the Toronto Parking Authority; and Porter Airlines, the regional carrier campaigning for permission to fly long-haul jets out of Billy Bishop Airport.

In each case, the contracts for the family business have been small in terms of dollars. But at city hall, the stakes have been high. These previously undisclosed relationships raise further questions about the extent to which Deco's interests have been a factor at city hall. In an ongoing investigation, The Globe and Mail has revealed instances in which the Fords have advocated for their clients with city staff.

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Last month, the mayor was asked about Deco's relationship with RR Donnelley and Sons, a commercial printing giant that pays Deco to print airline tags. In 2011, the Fords helped several Donnelley executives lobby the city's top purchasing official regarding the city's $9-million in-house printing division.

"If that's a conflict, then I'm going to have a conflict with almost every business or every person in this city, because we've been around for 52 years. We've dealt from those little ma-and-pa shops to huge grocery stores to almost every company. So I guess I'm in a conflict," Mr. Ford said. "I'd have to declare a conflict with everybody."

Deco Labels' Canadian office has more than a thousand accounts on file, according to an internal company client list that was reviewed by The Globe. Deco clients include major Canadian brands, banks, small businesses, charities, hospitals and government departments. Also included on this list are a handful of companies that have tried to influence policy decisions at city hall in recent years.

At city hall, revelations about Donnelley and another client, Apollo Health and Beauty Care, have sparked probes by Toronto's Integrity Commissioner and revived calls for the Ontario government to modernize and clarify the conflict-of-interest laws that govern municipal officials. It's been three years since Justice Douglas Cunningham recommended that the Municipal Conflict of Interest Act be expanded as part of his inquiry into Mississauga Mayor Hazel McCallion and her support of a development company that was partly owned by her son.

In an interview, William McDowell, who served as chief commission counsel to the inquiry, said the provincial government needs to act on the justice's recommendations.

"We need better and clearer rules about when you as a councillor can put your thumb on the scale at council … on behalf of companies in which you have an interest of any kind," Mr. McDowell said.

There is no law that requires the Fords to place their business in a blind trust, a mechanism that other politicians, such as former prime minister Paul Martin, have used to avoid the appearance of impropriety. The laws around what the Ford brothers must disclose about Deco's clients are murky. Municipal elected officials aren't required to volunteer their private business relationships. However, according to the Municipal Conflict of Interest Act, city councillors are expected to recuse themselves from votes and debates at council in which they have a direct or indirect pecuniary interest.

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In a letter, a lawyer for Deco, Gavin Tighe, said Mayor Ford and Councillor Doug Ford are not in a conflict of interest, "as defined in the legislation."

Because Deco is a private corporation, its finances are not made public, which makes it difficult to determine whether the Fords' conduct as elected officials intersects with their business interests. Interviews with former employees and a review of an internal client list shows there are examples of overlap between the needs and wants of Deco's clients, and the positions taken by the Fords on matters before council.

In December, 2008, as part of a sweeping motion to reduce waste in Toronto, city council voted to ban the sale of plastic water bottles in all municipal buildings (including arenas and city-owned theatres), put a five-cent tax on plastic bags and force takeout restaurants to develop environmentally friendly food containers. Then a councillor, Mr. Ford voted against the motion. As mayor, Mr. Ford has complained that the bylaw banning bottles should be overturned.

Three companies that have done business with Deco – Coca-Cola, Cara Operations Ltd. and Nestlé Canada – were affected by this waste-reduction strategy.

Coca-Cola, which produces the Dasani brand of water, was sold at city hall prior to the ban, a city spokesperson confirmed. It's unclear how much business Deco has done with Coca-Cola. Shannon Denny, the company's director of brand communications in Canada, said via e-mail "we do not publicly discuss any supplier relationships."

Cara Operations Ltd., which owns restaurants such as Swiss Chalet, Harvey's and Kelsey's, lobbied city council members – including then-councillor Rob Ford – on the packaging issue. The Deco client list indicates Cara has an account with the Fords' firm, though The Globe has not been able to determine the value or timing of any orders. Cara declined to comment.

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Nestlé Canada, which says it has done about $20,000 worth of business with Deco since 2007, got involved in the bottle-ban debate after Mr. Ford became mayor. On Nov. 26, 2012, a lobbyist acting for Nestlé Waters Canada – a division of Nestlé Canada – met with a member of Mayor Ford's staff to discuss the bylaw, Toronto's lobbyist registry indicates. A Nestle Waters official met with the Ford administration three times that year to discuss "recycling and diversion of beverage containers from waste, including bottled water."

A Nestlé spokesperson noted that the company's American counterparts have also purchased supplies from Deco "in very limited capacities" and that all considered the business "is a very small portion of our total packaging spend." The bottled-water division has not ordered any labels from Deco, the spokesperson said.

Another company that has contracted Deco is Soheil Mosun Ltd., an Etobicoke architectural and design firm. Darius Mosun, the company's chief, was backed by the mayor during the 2011 civic appointments process, where councillors choose civilians to sit on the city's various boards and agencies. An investigation by Toronto Ombudsman Fiona Crean determined that the mayor circulated a list of preferred candidates to the city manager's office and like-minded councillors. (The mayor has denied that his office created a list, although it has been viewed by The Globe.) In the end, nearly three-quarters of the Ford administration candidates won seats, including Mr. Mosun, who was made a director on the Toronto Parking Authority board. Mr. Mosun declined to comment.

Of all the many policy decisions the Ford administration has had to tackle, one of the most contentious has been the proposal by the chief executive of Porter Airlines, Robert Deluce, to expand the island airport and extend the runway by 400 metres into Lake Ontario, allowing for the use of long-haul jets.

Between Sept. 21, 2006, and Nov. 15, 2010, Porter Airlines contracted Deco to print plane decals and other items – business worth about $8,500, according to accounting records provided by the airline. Mayor Ford is identified as the salesperson for the Porter account – POR005 – on the Deco client list that was examined by The Globe.

Porter is one of about 160 Deco accounts assigned to Mr. Ford, none of which include Deco's most valuable clients, former Deco employees say. These sources told The Globe that salespeople – including the Fords – receive commissions whenever one of their accounts places an order.

The last order was placed two weeks after Mr. Ford became mayor. The invoice –$1,232 for tray labels – was paid on February 21, 2011.

Porter's chief executive said he had no idea his company had done business with Deco Labels.

"[It was] never discussed at any time with any Deco individual, including the Fords. Nor was I aware until the other day that we actually had done work with them," Mr. Deluce said. He described Deco's work for Porter as "a pretty minor chunk of business" and said it was a tiny fraction of the airline's printing costs.

Since Rob Ford became mayor in December, 2010, the Fords have repeatedly and publicly supported Porter Airlines.

In 2011, five months after the last Porter invoice was paid to Deco, both Ford brothers voted to build an underground pedestrian bridge to the island airport, which passed council.

In April, 2013, when Mr. Deluce announced his expansion plans, he found early allies in Mayor Ford and Councillor Ford.

"If we didn't have Bob Deluce, there'd be a cornfield over at the airport right now," Councillor Ford told reporters. "This is going to create jobs. It's going to create more tourists coming into the city."

Two weeks later, the mayor filed a surprise motion at executive committee asking city staff to look at reopening the tripartite agreement that governed the island airport, paving the way for the new jets. The Fords continued to throw support behind the commuter airline. The mayor pressed councillors to quickly approve the plan, voted against several delay motions, unsuccessfully tried to block a proposal that would require additional traffic impact studies, and voted against motions that called for further investigation into noise levels and fuel-tank accommodation.

At April, 2014's final showdown at council – a meeting in which councillors voted unanimously to begin exploratory negotiations with a long list of conditions – both the Ford brothers rejected a request to consider health impacts of a larger airport.

A spokesman for Porter Airlines said in a written statement that the airline in no way received favourable treatment.

The Fords' lawyer, Mr. Tighe, told The Globe in a letter that the mayor made no attempts to leverage his position to help Porter in exchange for business at Deco. "At no time have either Mayor Ford or Councillor Ford used their public office for personal benefit," he added in a second letter.

This is not the first time Mayor Ford has been made to answer questions about whether he has been in a conflict of interest. In 2012, he was taken to court for voting on an item at city council where he stood to lose $3,150. He won his case on a technicality. During the trial, Mr. Ford testified that he had declared a conflict in the past. Public records show four instances between 2005 and 2006 where then-councillor Rob Ford recused himself from votes because he "owns a printing company," committee minutes show. The matters dealt with equipment purchases by the city's in-house printing division as well as the building in which it was housed.

Exactly what constitutes a conflict of interest, in law, is not black and white.

But as Justice Cunningham underscored in his final report on the Mississauga inquiry, municipal politicians can be in a conflict of interest without violating the narrow definition in Municipal Conflict of Interest Act. One of the cases he pointed to was a 1990 Supreme Court decision that said a conflict of interest arises when an elected official has an interest in a matter and "a reasonably well-informed person would conclude that the interest might influence" the exercise of their public duties.

Justice Cunningham called on the provincial government to expand the Municipal Conflict of Interest Act so that it covers all conduct by elected officials, and not just their actions inside council chambers. His recommendations will create greater transparency, he wrote. "Economic transparency will promote public trust," he concluded.

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About the Authors
Investigative Reporter

Robyn Doolittle joined The Globe and Mail’s investigative team in April 2014 after spending nearly a decade reporting for the Toronto Star as a general assignment, crime and finally city hall reporter. Her probe of Mayor Rob Ford’s troubled personal life garnered worldwide attention and ultimately won the 2014 Michener Award for public service journalism. More

National reporter

Greg has been a reporter with The Globe since 2005. He has probed a wide variety of topics, including police malfeasance, corruption and international corporate bribery. He was written extensively about the Airbus affair, offshore tax evasion and, most recently, Toronto Mayor Rob Ford and his criminal ties. More

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