The Mayor’s legal scrutiny is set to begin anew , perhaps as early as next month, with the release of an extensive forensic audit of his 2010 campaign finances. Toronto Mayor Rob Ford arrives for a news conference at City Hall Jan 25, 2013 after hearing that he had won his appeal in a case of conflict of interest.(Moe Doiron/The Globe and Mail)Moe Doiron/The Globe and Mail
One down, one to go.
After the Ontario Divisional Court overturned the stunning ruling that would have seen him removed from office on Friday, Mayor Rob Ford said he was "humbled" by the legal fight and the expressions of support from the public. He then pledged to get back to what he came to city hall to do in the first place – to fight for the taxpayers.
But his own fight may not be over yet. The legal scrutiny is set to begin anew, perhaps as early as next month, with the release of an extensive forensic audit of his 2010 campaign finances. At a press conference, Mr. Ford insisted he wasn't going to be distracted. "You've got to stay focused. We are running the city better than any administration ever has."
Yet the case may prove to be difficult to ignore. In May, 2011, Toronto residents Max Reed and Adam Chaleff-Freudenthaler, an activist who was involved with the conflict case, launched a complaint against Mr. Ford, alleging he broke Ontario's Municipal Elections Act by spending more than the legal limit, incurring expenses before he had registered as a candidate and relying on a family holding company to underwrite his campaign in apparent violation of the province's campaign financing rules. The penalties range from fines up to $25,000 to, once again, a possible removal from public office.
But Mr. Ford's critics may be disappointed by the outcome, which could take months to resolve. Lawyer Tim Wilkin, who has been involved in municipal compliance audit cases in Hamilton, Vaughan and Ottawa, said there have been few high-profile Ontario cases that resulted in stiff penalties. "I think it's a really steep hill to climb to actually get a conviction except in the most extreme cases," he said.
The report, prepared by forensic accountants Froese & Partners, is almost complete. But compliance audit committee member Virginia McLeana said a meeting has yet to be scheduled, and that it will not be presented during the Feb. 4 hearing on alleged campaign overspending by Councillor Giorgio Mammoliti.
The Story So Far
In April, 2011, The Globe and Mail reported that Mr. Ford had relied on Doug Ford Holdings, a family shell corporation, to finance about $77,000 in early expenses to his long-shot campaign, launched in March, 2010, after John Tory and other right-of-centre candidates bowed out of the race. Campaign veterans considered the approach to be unorthodox because the rules say that candidates should either use their own money or bank lines to cover expenses.
The formal request for an audit came a month later amidst a flurry of similar allegations against other members of council's right wing. Council's three-person compliance audit committee – two lawyers and a former head of Elections Ontario – agreed to order the audit in May, 2011. Mr. Ford all along insisted that his campaign organization had followed the rules, but his legal team made two ultimately unsuccessful attempts to block the process in the courts.
A forensic auditor has spent over half a year scrutinizing every aspect of Mr. Ford's campaign finances, including fundraising expenses that were allegedly excluded from the spending cap, and claims that the donation of some goods and services came from private companies.
The Issues
Election financing rules are all about ensuring a level playing field. In municipal campaigns, candidates are allowed to spend up to a certain level ($1.3-million for Toronto mayoral races), depending on the size of the electorate. Fundraising expenses may be excluded from those limits. Yet in some cases, candidates may hold political rallies under the guise of fundraisers.
For the City of Toronto, rules established during David Miller's term prevent candidates from soliciting donations, in cash or in kind, from corporations or unions. Some of the allegations against Mr. Ford have to do with whether his campaign received indirect corporate contributions through access to discounted services, such as access to low-cost campaign office space provided by the Ford family's printing company.
The Process
When the compliance audit committee convenes to consider this case, it will hear a detailed presentation by the forensic auditor, Bruce Armstrong, who reviewed the mayor's books. By that point, Mr. Ford's lawyers will have had a chance to review the report, and will likely submit a rebuttal. The auditor's mandate is to document every violation, no matter how insignificant. The committee's task is to determine whether the reported breaches should be the subject of a formal prosecution.
If they vote yes, the city will retain outside counsel to press charges under the Provincial Offences Act. Mr. Wilkin, who has served in this capacity, says the lawyer's role is to figure out if there's a way of making a charge stick. Just because the compliance audit committee has given the green light doesn't necessarily mean a conviction will follow. Indeed, as he points out, while the legal standard for authorizing a forensic audit is very low, a lawyer prosecuting such a case in court must be able to prove the allegations beyond a reasonable doubt.
The Precedents
There aren't many. In the City of Vaughan, a flurry of allegations of campaign finance irregularities in the early 2000s morphed into several long-running legal battles involving compliance audits against former mayors Linda Jackson and Michael DiBiase, as well as another city councillor.
A judge dismissed all three cases for procedural reasons raised by the politicians' lawyers. The courts never actually ruled on the substance of the election misspending accusations, says Mr. Wilkin, who acted for the City of Vaughan as outside counsel.
The only other high-profile case involved former Hamilton mayor Larry Di Ianni, who had been accused of accepting improper donations during the 2003 election. After extensive political jockeying at Hamilton Council, the case finally ended up in the courts, with Mr. Di Ianni pleading guilty. He agreed to make a charitable donation and write an essay in Municipal World Magazine about why it's important for candidates to strictly supervise their own campaign accounting practices. He lost the subsequent election.