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Citizens Call For an Audit of Ford’s Campaign Finances

20110504elxnfinance.jpg
Sections of Ontario’s Municipal Elections Act, which regulates campaign financing.


Two Toronto residents have filed a complaint with the City’s Compliance Audit Committee, a citizen body that reviews allegations of municipal election violations. The complaint claims that Mayor Ford contravened municipal campaign finance rules during the 2010 election.
Where might Ford have gone wrong? Well, let’s see.


The complaint was prepared by Adam Chaleff-Freudenthaler (activist, soon-to-be-ex-especially-after-this Toronto Public Library Board member) and Max Reed (a recent law school graduate). It follows some investigative reporting by municipal affairs journalist John Lorinc, who analyzed financial documents released after the election by the Ford campaign and deduced that there were possibly some untoward things happening between the lines.
Two other people have already filed requests for audits on the basis of Lorinc’s work. But this latest one is accompanied by a legal argument that details how and why Rob Ford’s campaign might have violated the law.
We’re going to break that argument down for you, but know this: If we were to use the word “allegedly” as many times as warranted here, this post would become difficult to read. We’re not going to do that. You already know to be skeptical of legal claims that haven’t been tested in court. Maybe practise repeating the word to yourself, under your breath: “Allegedly, allegedly, allegedly.”
Here’s what you need to know:
Rob Ford’s campaign might have borrowed illegally from his family’s company.
Chaleff-Freudenthaler and Reed, like Lorinc before them, have seized on a particular passage from the Municipal Elections Act that appears to forbid candidates from borrowing money from anything other than “a bank or other recognized lending institution in Ontario.”
Rob Ford’s campaign, the complaint alleges, might have violated that rule by allowing Doug Ford Holdings Inc., a company whose directors include Doug and Rob Ford, to make $77,722 in payments for various campaign expenses.
Doug Ford Holdings Inc. later invoiced the campaign for the full amount. So, no problem, right?
Not quite. There’s a chance that the whole deal is still suspect, because we don’t know how much time passed between when Doug Ford Holdings invoiced the campaign and when the campaign paid. The argument being advanced by Chaleff-Freudenthaler and Reed is essentially that the interval of time, however long, between payment and invoice means the money was a loan. Because if you were to get a bank to front you $77,772 for any amount of time, they wouldn’t consider it to be anything else, right?
The bank would also charge you interest, and for this reason the complaint also alleges that Ford’s campaign accepted an illegal campaign contribution. That’s because Doug Ford Holdings presumably provided the money interest-free.
Chaleff-Freudenthaler and Reed interpret invoices filed by the campaign to mean that Ford’s people later arranged a line of credit with TD Bank after meeting with a lawyer, which they allege is evidence that the campaign realized it was functioning in a legal grey area.
Rob Ford’s campaign might have spent more than the legally permitted maximum for the campaign.
Filing election expenses is a little like filing income taxes, in that there are certain things a candidate can write off. Rob Ford’s campaign comes in under City-mandated spending limits if all his writeoffs were appropriate, but Chaleff-Freudenthaler and Reed say in their complaint they weren’t.
The campaign classified $102,713 worth of direct mail, telephone canvassing, and fundraising commissions as writeoffs under a part of the Municipal Elections Act that forgives candidates “the cost of holding fund-raising functions.” The complaint’s argument is that none of those three services constitute fundraising functions.
Rob Ford might have spent money before he was officially a candidate.
Chaleff-Freudenthaler and Reed found a $25,379 invoice to the campaign for use of a meeting hall (presumably for the campaign launch party) dated one day before Rob Ford registered as a candidate. Spending the money before registering, they say, would have been against the law.
So what happens next?
The Compliance Audit Committee is supposed to review claims like these within 30 days of receiving them, so at some point in the next month they’ll decide whether or not to authorize an audit. They’re considering two other similar complaints at a meeting on Friday, and this one could be added to that agenda.
If the committee does give authorization, an auditor will investigate all the allegations we just described (plus a few smaller ones we didn’t). Then, if the auditor agrees that there were infractions, Rob Ford can appeal the decision in court. Failing that, he might face a fine. The Municipal Elections Act also allows officials to be removed from office for some offenses. Needless to say, Ford would fight that vigorously, and it is an extremely improbable outcome in any case.
If the auditor doesn’t find anything, the people who brought the complaint can be made to pay for the auditor’s time.

The audit request that will be filed today at 10 a.m.:
Compliance Audit Request

[Disclosure: Chaleff-Freudenthaler is partners with Torontoist editor Hamutal Dotan; this post was therefore edited by deputy editor Meg Campbell.]

Comments

  • tyrannosaurus_rek

    Thumbs up for the effort!

  • Eric S. Smith

    “Rob Ford’s rich, he can do anything he wants with his money. Leave the poor rich people aloooone, you jealous communists.”

    Or so I imagined, as I began to read this, his supporters would say. Having gotten to the end of it, I now think that they’ll probably pursue the much more viable route of pointing out that even people who can figure out what he’s supposed to have done wrong aren’t going to find it massively crooked. It’s going to turn on such dull questions as what percentage of a given letter was “campaigning” and what percentage was “fundraising,” and I, who can’t stand Ford, am having trouble caring.

    In the end, the problem is that he’s the mayor. If the electorate weren’t a bunch of reactionary boobs, no amount of (over-) spending would have helped.

  • tyrannosaurus_rek

    We've just recently seen that disregarding parliament and putting a strangle-hold on the press doesn't bother people when it's their candidate doing it so I don't suspect it will be any different in this case, despite the obvious hypocrisy.

  • blearghhh

    It's true. I was kind of hoping that it was something nice and juicy, like taking a stack of drug money from the evidence locker at police HQ or something like that.

  • tomwest

    If a (successful) candidate for elected office is found guilty of spending violations, they should either be barred from running again or chucked out of office. Otherwise, the rules have no teeth. (A large fine would help, but for a sufficiently rich candidate it would just be another expense).

  • EtobicokeDad

    The funniest part is calling this pair of leftwing hacks 'citizens' as though they were just looking out for everyone's best interests rather than playing their own partisan games.

  • tyrannosaurus_rek

    Why are conservatives such as yourself so full of anger toward people who don't agree with you?

  • EtobicokeDad

    I wouldn't feel anger if this pair were upfront and just said: “our guy lost, we hate Rob Ford, and we're willing to go to any lengths to smear him and hopefully take him down”. At least I could respect their honesty (and task commitment) at that point.

    Furthermore, these two prove themselves to be not very bright. If you work for a left-leaning councillor at least get your girlfriend's mom or a neighbour to file the request and give yourself some distance. Instead you just look petty and spiteful.

  • tyrannosaurus_rek

    So, because they aren't taking it personally you're personally offended, but if they were being poor losers you'd be objective? Nonsense, you'd call them names all the same, because they vote left.

  • http://piorkowski.ca qviri

    Pretty funny, but not nearly as funny as people falling over themselves to explain and ridicule away lack of transparency in a right-wing law-and-order campaign.

    Or wait, do you actually believe it's not in everyone's best interest to not have rich people bankroll their own election campaigns?

  • EtobicokeDad

    It's clear from your response that you didn't even read my comment, because I claim they ARE taking it personally. They simply don't have the courage to admit their motives.

    These folks are cut from the same cloth as the crazy Republicans who are convinced that Barack Obama should be removed from the Presidency because he allegedly wasn't born in the US. Obama won, Ford won. Stop trying to play silly little games.

    You lost, get over it and move on. Judging from approval ratings 70% of Torontonians are pleased so far.

  • EtobicokeDad

    You have no proof of any of this, that's the funny part. All you lefties want to do is smear because your “ideas” have run out of traction in this City (well, for the time being anyway).

  • http://piorkowski.ca qviri

    70% of Torontonians and GTA residents*

  • http://piorkowski.ca qviri

    It's a complaint. Whether it's true or not, whether there is proof or not, will be found by the Compliance Audit Committee.

  • tyrannosaurus_rek

    70% of people who answered the survey.

  • tyrannosaurus_rek

    “All you lefties want to do is smear…”

    You called the people filing the complaint “hacks” and then questioned whether they should even be counted as citizens. That sounds like smearing to me.

    If these guys just wanted to smear Ford, they wouldn't bother with proper channels, which could still rule in his favour after investigating, and just run a media campaign making similar claims (certainly they would allege far more than mid-5-figures was misspent).

  • tyrannosaurus_rek

    You're assuming they're taking it personally. To quote you: You have no proof of any of this, that's the funny part.

    “Obama won, Ford won. Stop trying to play silly little games.”

    If I were to rob a bank and successfully reach the sidewalk, would you say I won and police should stop being poor losers? Of course not. If he broke the law to win, then it should be investigated and he should pay the price.

    Assuming he's guilty of the charges, nobody is expecting him to be hauled out of the mayor's office over this, but it is a legitimate matter for voters to weigh the next time the polls open.

  • Shaney1

    @EtobicokeDad; When someone does something wrong, what does it matter who does the telling?  “IF”, Rob Ford didn't obey the rules, I for one don't care what their reasons are for exposing him, I'm just glad they had the balls to stand up to City Hall!  Wrong is wrong, no matter who you are!!  What are you so affraid of…let's wait until the Compliance Audit Committe have completed their investigation, before you start berating others because they don't agree with you!!!!  I would be interested to hear what you have to say after the investigation, should it find that Ford borrowed illegally from his family's company.  We “leftwinged hacks” have a voice & a vote & we will continue to use them just as long as there are small minded people willing to do whatever is necessary to win.

  • Shaney1

    @EtobicokeDad; When someone does something wrong, what does it matter who does the telling?  “IF”, Rob Ford didn't obey the rules, I for one don't care what their reasons are for exposing him, I'm just glad they had the balls to stand up to City Hall!  Wrong is wrong, no matter who you are!!  What are you so affraid of…let's wait until the Compliance Audit Committe have completed their investigation, before you start berating others because they don't agree with you!!!!  I would be interested to hear what you have to say after the investigation, should it find that Ford borrowed illegally from his family's company.  We “leftwinged hacks” have a voice & a vote & we will continue to use them just as long as there are small minded people willing to do whatever is necessary to win.