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Citizens Call For an Audit of Ford’s Campaign Finances

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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.]

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