Loans totaling $275,000 were extended to the city councillor by real estate investors, after he supported their applications to install lucrative billboards.
The CBC has conducted an investigation into councillor Giorgio Mammoliti’s (Ward 7, York West) financial situation, and is reporting that he received a total of $275,000 in mortgage loans from two real estate investors, two years after backing their controversial applications to install lucrative billboards by the 401. Mammoliti’s support for some of those billboard applications raised eyebrows when they were originally debated: councillor Doug Holyday (Ward 3, Etobicoke Centre) suggested the integrity commissioner look into it, but no evidence of wrongdoing was uncovered. (The loans would not yet have made at that time.)
The loans, in and of themselves, wouldn’t have been illegal, nor are there currently any requirements for councillors to disclose them. The optics are certainly bad—the worst-case conclusion being that the developers gave those loans in exchange for Mammoliti’s support of the billboards—but no evidence for that kind of quid pro quo has been presented. Those optics aside, nothing in law prevents a member of council from taking out a loan with a private lender who at some other point may have dealt with the municipal government.
The first set of billboard applications were considered in 2004 and 2006; Mammoliti received a $200,000 loan from the developer involved two years later, in 2008. Another batch of applications came to council in 2009; the developer in that second round had taken over the property involved in the first batch of requests, and also was applying to have billboards at two other locations. That developer issued Mammoliti a $75,000 loan in 2011. All billboard applications in both cases were approved.
Doug Holyday still has concerns about those billboards and the subsequent loans, and told the CBC that council’s code of conduct should be reviewed in light of this case, perhaps to require disclosure of loans like this in future.
We asked municipal law expert John Mascarin about the situation. He, like the legal experts the CBC consulted, says that right now there is no evidence of illegal activity.
Concerns about the risks of loans like this are based on the potential conflicts involved, between a councillor’s duty to do the best for the City and pressure to show preferential treatment to someone who is helping them out. “The Toronto Code of Conduct prohibits a member of council from receiving gifts or benefits connected directly or indirectly with the performance of the member’s duties as a councillor,” Mascarin explained by email.
It’s not accepting the loans itself that would be a problem, in other words. What would be a problem is if the terms of the loan were favourable because of Mammoliti’s decisions as a councillor—if he got a loan someone else in a similar financial situation would not have been able to obtain, in virtue of actions he took at City Hall. Mascarin went on: “The loans do not appear to be interest free,” which would be one kind of gift or benefit, “however, if any part of the loans are forgiven, that forgiveness could possibly constitute a gift or benefit under [city council's] Code of Conduct. There is also a provision that indicates that a member shall not use the influence of his or her office to secure any advantage or personal gain.”
Right now we have no evidence of that—the billboard applications and the loan may be entirely unconnected, a case where optics create a false impression of wrong-doing. Mammoliti has so far declined to respond to today’s report.
Giorgio Mammoliti has now responded to the CBC’s investigation with a written statement. The full text:
I have supported hundreds of first and third party signs throughout my career both in my community and throughout the City of Toronto and will continue to do so. The sign applications the CBC and Toronto Star refer to were for upgrading already existing signs, which were in need of repair and would contribute to the revitalization of my community of which I remain greatly focused on. The CBC and Toronto Star have reported that there were clearly no conflict in my dealings on this matter as a Councillor. The loans issued were of a personal business matter involving a company owned and operated by my now ex-wife and the repayment of such loans have been dealt with as part of our divorce, which is still ongoing. To the best of my knowledge the Tradesa International loan has been paid out in full with interest. While I accept challenges about my decision making as a Councillor, to blatantly issue a story that has no relevance to my job and involves my family and personal relationships I find to be in very poor taste. I respectfully request to leave my personal dealings and my family out of the media.
Councillor Giorgio Mammoliti
We reached John Mascarin after publishing our initial story on this situation; the paragraphs including his remarks were added a few minutes after first posting the article.