July 14, 2004 Report – Part 3

7. DISCUSSION ITEMS

Mayor DiIanni : "We're at 5 minutes to 12 and I don't know what plans, staff have for lunch. Is lunch ordered? Ordered. And, what time is that? 12 o'clock. There's a whole bunch of people here for different reasons. I know that there's people here for the arts; there's people hear for the audit. I wonder if we should deal with those two issues before lunch, just so that it would free people up to do whatever they need to do. And, if that's the case, what's the will of Council on 7.9, which is the Audit Request. And, if that is the case, if you agree that we should go forward with that, I'm going to ask Councillor Ferguson to take the Chair. And, those who declared a potential interest before we do it, the same, right?" (hear someone off microphone asking a question, Mayor responds) "Yes, yes we do. We, I need a motion to move this up and then maybe we'll deal with the arts issue, as well. I need somebody to move that though. Councillor Bruckler; Councillor Whitehead. All in favour? That's carried. Councillor Ferguson and then the arts issue . . ."

7.9 Municipal Election Compliance Audit Process (CL04008) (City Wide)
(http://www.hamilton.ca/Clerk/agendas-minutes-reports/
committee-of-the-whole/2004/Jul14/CL04008.pdf)

Ferguson (as Acting Chair) : "Okay, we're on Item 7.9 now. The report was prepared by Salter Hayden. Any comments from Salter Hayden? Would the Clerks note that the four Councillors left. [referring to Mayor DiIanni, Tom Jackson, Bill Kelly and Terry Whitehead who were all named in the requests for compliance audits].

Salter Hayden (Deputy Clerk / Manager Elections) : "The report on the Compliance Audit. I can go over it very quickly to reflect what Council's role is in this. We received two requests for Compliance Audit. Two letters, which Council has seen and is referred to this report. You have 30 days from receiving these requests to determine whether you are going to grant the requests to go ahead and have the Compliance Audit or reject the requests. If you grant the request, you must hire an auditor. And, Council would pay for the cost of the auditor. If you reject the request - actually whatever decision you make could be appealed by, could be appealed to the Ontario Court of Justice within 15 days. In other words, if you decide to reject the request and not have an auditor, that could be appealed. Even the request to go ahead with an auditor could be appealed. So, either way, whatever decision you make could, theoretically, be appealed to the Ontario Court of Justice within 15 days. If you do decide to have an auditor do a performance audit, the results - you have 30 days from receiving your results to decide whether you're going to take, commence legal action, if there has been a contravention of the Municipal Elections Act as a result of the audit; if the audit shows there's been a contravention. If the audit shows that there has been no contravention, and that there's no reasonable grounds to suggest that there ever was, then you can decide whether you want to take action against the individuals requesting the audit to recover monies for the cost of the audit. So, that, in brief, gives you a brief summary of what's required at this point. And, the Recommendation simply states, as a Council to make a decision whether you're going to accept the request and have the audit or not. And also, that if you are going to do that, to decide to go ahead and do it, to appoint and auditor. That basically outlines the report . . . ."

Ferguson (as Acting Chair) : "Thank you, Salter. Just for clarification, to the Clerks, is nine still quorum? (Clerks acknowledge, yes.) So, we're okay with nine. Okay. Bringing it to Committee, any discussion on the report. Councillor Collins."

Collins : (Couldn't hear the beginning of his statement) ". . . the financial aspect of it. In the report it says $5, 000. Is that for one or all of those that have been requested?"

Ferguson (as Acting Chair) : "I believe it's per -"

Salter Hayden (Deputy Clerk / Manager Elections) : "I don't have the exact details on that, how when that estimate was given. I believe that Mr. Rinaldo . . . I'm not sure if that was based on . . ."

Joe Rinaldo (General Manager, Finance and Corporate Services) : "I'm not sure. At the time I discussed it with Mr. Christenson. And, I suggested that he contact our auditors. The only thing, he did it directly. So, I'm not quite clear as to whether that we cleared it only, I thought is was for all three. But, we could get back to you, if that's the case. But, my guess it would be in the $5,000 to $10, 000 range, is what it would cost to do this kind of audit from an external auditor. I think that would be the ball park range for the three."

Collins : "Including the not elected individuals, as well?"

Joe Rinaldo (General Manager, Finance and Corporate Services) : "That's what I'm not sure of. I'd have to get that clarified for you."

Collins : "Is it our responsibility under the Act to pay for people who were not victorious in a past election, when there's a question of finances?"

Salter Hayden (Deputy Clerk / Manager Elections) : "Through you, Mr. Chairman, the Municipal Elections Act states that Council will pay for the cost of the Auditor."

Ferguson (as Acting Chair) : "Thank you, Councillor Collins. Any further discussion? Councillor Braden?"

Braden : "Thank you, Mr. Acting Mayor, I just, to keep my comments short. I suggest to clear the air . . ." (tape stopped sorry, but Braden suggested going ahead with the audit to "clear the air")

Salter Hayden (Deputy Clerk / Manager Elections) : "Mr. Chairman, I don't have any specific answers on that. I think that some Councils have appointed a committee to deal with this and others may have gone ahead and done it. I really can't answer that, because I haven't really looked into what other municipalities have done."

Bruckler : "Just one initial question. I noticed in Appendix A that certain penalties under the Act to both the donor, if you will, as well as the candidate. Can you put, it talks about ranges. Who would make that assessment as to the degree of penalty they would." (I think the last word was "get", but mic off before could hear it.)

Salter Hayden (Deputy Clerk / Manager Elections) : "Through you, Mr. Chairman, it says it could be up to $5, 000 in penalty. I imagine it would be the judge that would make that assessment. I don't. That would be my understanding, anyway."

Bruckler : "So, if we were to call an audit process, if - and there were some discrepancies, that would then go to a judge, who would then make that determination?"

Salter Hayden (Deputy Clerk / Manager Elections) : "If the Council decided to commence legal proceeding, then it would be a legal matter through the courts."

Ferguson (as Acting Chair) : "Okay. Councillor McHattie."

McHattie : "Mr. Chair, I have a question to begin with as well, to Salter. The City has, in Appendix 'A' to the Report, you've provided the penalties involved in this, and it talks about the presiding judge and that sort of thing. And, I'm just trying to differentiate between if the City does this and Council makes its decision this morning to go ahead with the Compliance Audit or if it turns out that we decide not to do that and the . . . " (did not clearly hear the word he used) "of this initiative ask the Province to follow up, and to carry forward on this. Does the Province have the same rules in terms of taking this to court? I'm just trying to get a sense of the particular Ontario Court of Justice, I guess is where it goes, if it goes to the Province. What are their actions? What do they, what do they do with this, as compared to what we would do with it if we know. Is it the same, virtually the same action that both Council has and the Ontario Court of Justice has?"

Salter Hayden (Deputy Clerk / Manager Elections) : "Mr. Chairman, it simply states that the decision can be appealed to the Ontario Court of Justice. I would imagine at that point, that the Court could make a determination of what should be done. It talks about the Court making a decision, not the Provincial Government, itself. So, if this was appealed to the Ontario Court of Justice, then the Court would be determining whether it's going to uphold the Council decision or not."

McHattie : "If I could just - my interest here is in seeing this investigated, quite frankly. But, I'm not at all sure - I guess I'm having some difficulty with the process that we're faced with, where we're being asked to stand in judgement of our fellow councillors and I mean, I don't know if it's a formally a conflict of interest for us to decide that on behalf of our fellow councillors, but that's certainly the way it feels and I think that, you know what, the bottom line is, is this should be investigated; I'm just having a really hard time with the process that we've been provided with. And, in a moment I'm going to bring forth another motion which'll hopefully make this a lot easier if it happens again at the next election - both the by-election that we'll have in the fall and the following election in 2006, which sets up a process that takes it an arms length away from the politicians here, because we're in a very difficult position. So, I'm hampered by that feeling that I have and that I want to see this dealt with. So, I'm trying to understand what the Ontario Court of Justice does. I guess it can decide that City Council erred in its decision not to investigate and that an investigation should be done; a compliance audit should be done. The Ontario Court of Justice can take that position. But, do we know at that point what happens? Does the Ontario Court of Justice go ahead and order the compliance audit? And, do they take it to some sort of other court, as we would if we saw the compliance audit and we found problems? I'm just trying to understand what happens at the Provincial level - the court level. This is maybe new ground for us, here in Hamilton. So, I don't know if we have all the answers. But, I guess I'm asking . . ."

Salter Hayden (Deputy Clerk / Manager Elections) : "In response to that, I am not a solicitor, perhaps our solicitor could answer how the court process would work. The Act simply said that it can't be appealed to the Ontario Court of Justice."

Ferguson (as Acting Chair) : "Peter."

Peter Barkwell (City Solicitor) : "I'm at a small disadvantage here, because I don't have the wording of the Act in front of me but where an Act says that a Judge may make any decision the Council can make, the implication is that the Judge has the power to order the audit or not order the audit. Essentially, the Judge puts himself in the same decision-making capacity that this Council is in this afternoon. Once the Judge ordered the audit, I would expect the rest of the procedure of the Act would kick in and this Council would have to pay for the audit. Presumably the report would either come back to the Council or back to the Judge. I'm not quite clear on that, as I say, I don't have the Act in front of me. But, the appeal process which says the Judge can make any decision the Council can make makes it essentially what we call a trial de novo: the Judges can make all the same considerations you're making here, today and simply substitute his or her opinion for yours."

McHattie : "And, Peter, just to follow up if I can, I know you're disadvantaged not having the Act here. But, if that decision's made by that Judge the same way as Council would make it here, who then makes, it comes back to us, you're suggesting, possibly? And, are we still in a position to to say, therefore, this should then go to court to investigate the inconsistencies that were found in the compliance audit?"

Peter Barkwell (City Solicitor) : " Well, again, I don't have the Act in front of me, but my understanding what . . . " (didn't hear clearly what he said) "the Auditor's going to bring forward a report with respect to compliance or non-compliance. That's not necessarily give rise immediately to charges. There's always a process of charges being laid or not laid. That would be a different process, I would expect from the Auditor's Report. The Auditor's not going to lay charges, I wouldn't expect this Council would be laying charges. On the other hand, if an Auditor came back and found that there had been irregularities, clearly that might expose some individual or corporations to having charges laid against them."

McHattie : "Is your sense that that's still our decision, though, at that point, after it goes through the Ontario Court of Justice: they decide; they call for the audit; there's a problem with the audit; a problem's identified though the audit; it comes back to our, it's back in our court again; we decide whether we want to act? "

Peter Barkwell (City Solicitor) : "Well, it may be that the Council would have a function in determining whether to prosecute after a report came back. But, to give you an answer to that, I really would have to have some time to look at the Act."

McHattie : "Well, I guess my interest, Mr. Chair, is in seeing these concerns investigated. I mean, I think people's opinions of politicians, as you know, isn't always the best - that covers all of our activities - whether we've been identified in this situation or not, as City Councillors. So, I think it's important that we clear the air. The part I'm having difficulty with, is the process and being asked to stand in judgement of our fellow Councillors and whether that's a conflict or not. I anticipate that Ms. Chapman may, in fact, appeal the decision, should we decide not to go ahead at the Council level. And, it'll go to the Ontario Court of Justice and the investigation will take place. My understanding is this is the route that the City of Niagara Falls have just taken, fairly recently in a very similar situation. They decided not to go ahead at the Council level. It's likely off to the Ontario Court. So, if that's the route that it takes, the Compliance Audit still takes place and we still have answers at the end of the day."

Ferguson (as Acting Chair) : "Councillor Morelli."

Morelli : "Thank you, Mr. Chairman. Councillor McHattie has basically really covered the waterfront that I feel I face. This whole process, I mean I don't particularly, my objective is to make sure that these things are dealt with. But, I'm very uncomfortable with the process. And, certainly, I'm not comfortable sitting in judgement of my colleagues. In fact, I think I have a conflict, or I could potentially have a conflict. I don't particularly think, either, that whatever we do will be in error. I think that what it does for me, I think from the comments just made that, the Ontario Court of Justice is in the same position as we are - or would be in the same position - and, I say, or she's not, quite frankly - they're impartial I think much more than we would be in terms of relationship. And so, that takes me at least to where I need to go, I think, in terms of having this matter addressed. The impartiality is really what I seek. I know that in recently, looking at the Gardner situation in Toronto, which I'm familiar with through Police work and .. ." (couldn't make out what he said) "which is the Ontario Civilian Commission on Policing and so to avoid this process and this difficulty of feeling of conflict and adjudicating your colleagues, as well as a very strong commitment to respond to the enquiry, and it's dealt with in that process. And, so it takes it to an impartial level. So I share Councillor McHattie's concerns and feelings and also his commitments to deal with this issue." . . . (couldn't hear the beginning of his sentence) "as well and likely in a position of not supporting the audit from this perspective, but supporting a " . . . (didn't hear what was said) "One of the objectives I'd like to really see achieved is that it be assessed and dealt with by an objective body. And so, I see that there's a way that happening. Obviously, I'm not familiar with the, the Niagara situation. I should share subjectively a comment with you, too that you know, from the time I've been around here, there's always some very difficult decisions; very difficult decisions. And, we've all talked about those. But, when you're dealing with your colleagues and as well as the commitment to this community and the people in it and their concerns, this has got to be one of the toughest I've ever faced because of the fact that it relates to the people I'm working with each and every day. So, I think that the requirement to have it go to an objective body is imperative for me and to have it get there as fairly as possible."

Ferguson (as Acting Chair) : "Councillor Mitchell. Hang on, Dave, Peter."

Peter Barkwell (City Solicitor) : "I just want to be sure there's no misunderstanding. In order for this to be put to a Judge, someone would have to appeal whatever it is Council decides to do, today. It will not automatically go to a Judge. Whether Council decides to authorize the audit or not, someone has to take an active step within 15 days to put it before a Judge."

Ferguson (as Acting Chair) : "So, Peter can you just on the peripheral, outline the process if Council agrees to an audit and then if they do not agree to an audit."

Peter Barkwell (City Solicitor) : "If Council agrees to perform the audit, then an auditor must be hired and then report back to Council in accordance with the terms of the Act. It would be potentially possible for any individual to appeal the Council decision to appoint an auditor and then a Judge could make a determination one way or the other. If Council decides not to appoint an auditor or perform and audit, again any individual affected could appeal to the courts to have an auditor appointed. So, what's not clear, even in a brief reading of the Act is if the Court appoints the auditor, is the auditor reporting back to Court or reporting back to this Council and I'm not sure what the answer to that is. Certainly, if this Council appoints the auditor, then the Auditor's Report comes back to this Council."

Ferguson (as Acting Chair) : "Councillor Mitchell."

Mitchell : "Thank you, Mr. Chairman. And, I want to agree with the previous two Councillors, as well. I'd like to put the concerns to rest. It's difficult in today's political field to build trust with your community; very difficult. You don't need things taking that trust away. I guess my question comes back to impartiality, as well. And, a few years ago at Ontario Municipal Board, we had so many requests going there - they'd pay $125.00 and they'd get to go to Ontario Municipal Board and then it'd cost the tax-payers a bundle of money. They implemented a pre-hearing process. Through you to the legal staff and I was quoted in the paper about wanting to hear from legal: Can this be sent some place to look at this issue to see whether it should be sent on farther, or not, because it can do a lot of damage to people's character if it's not done properly? In other words can there be a pre-hearing . . . ?" (didn't hear the word he used) "Can this Council say send it over there; have it looked at - I'm not talking about a full-blown audit - but have it looked at to see if the necessity is there for a full-blown audit? And, it keeps our costs down. It lets somebody else look at it and say, 'yes there is' or 'yes there isn't' because I don't like making that decision, Mr. Chairman, at all. I'd sooner see a piece of paper that this is this with some figures on it. I'd like it put to rest. But, you don't want to go that full-blown process unless somebody has a pre-hearing. Or, is it justified to spend some money there? That's my concern."

Ferguson (as Acting Chair) : "Peter or Salter, who wants that one?"

Peter Barkwell (City Solicitor) : "As far as I can see, there's no facility for doing that. This Council is charged to make a decision within a certain number of days."

Ferguson (as Acting Chair) : "Council McCarthy."

McCarthy : "Thank you, Mr. Chairman. Just a couple of comments and some observations. When one's in the middle of a campaign, the saying: 'organized chaos' comes to mind. And, it's - as any one of us knows - it's difficult, if not impossible to absolutely keep an eye on everything. We all usually have campaign managers that are supposed to look after the funds and things like that. I've been removed from that, because I don't accept any campaign contributions. But, I'm in an enviable position where my campaigns have been minimal in terms of any financial commitment. In Mayor DiIanni's case, I know he put something like $120, 000 of his own money into that campaign at closing date deadline. I don't know what he'll get back from that. But, that's a substantial financial commitment on his behalf. What I'm saying is anybody that accept campaign contributions can be in that boat. We could all be, we could all be in the other room and there might be no one here to discuss -" (someone says 'having lunch' then hear giggles from gallery) "- that's right. We might all have to, you know, consider that we have conflicts of interest. And, I think that the points that were made by Councillor McHattie are well-taken. If we initiate this evaluation, we end up, you know, reigning over our colleagues [with] whom we could be in the same boat, because, I can tell you - and perhaps I'm being naïve, but - nobody willingly goes into something with that kind of a financial under-taking themselves and wants to be criticized publicly for any mishap or mistake that would be seen. And, we all know that it's evaluated afterwards. So, I personally am not going to reign over my colleagues on how they conducted themselves because I know myself that it's chaotic and, if there is an over-sight, I believe it to have been an oversight and if an evaluation should take place and it's deemed by the community as necessary to do so, I prefer the community who elected those people to take that charge up and take that cause up and not ask us to sit in judgement over our colleagues. Thank you."

Ferguson (as Acting Chair) : "Councillor Merulla."

Merulla : "Thank you, Mr. Chairman. Just quickly, I have to concur with my, the previous speakers. But, I'm going to make this very quick, I hope we can move forward with this." (Chair asks Councillor Merulla to speak louder.) "I'm just hoping we can move expeditiously forward on this issue. It's unfortunate that there are some that are taking this to a great extreme and I think it's . . ." (couldn't hear what he said) "a hardship for a number of people, I think, unjustifiably. And, I think in most cases they are oversights and, if not, all cases. But, I think one thing that I have to say, just to clear the air, it was mentioned today about two legitimate contributors to my campaign - West Town and Funky Monkey - but it would be remiss not to mention the east end restaurants that donated to me like Rankin's and Ronny G's. Thank you, Mr. Chairman."

Ferguson (as Acting Chair) : "Councillor Braden."

Braden : ". . . Mr. Chairman, people spoke well, but I want to see if there's a way we can get around this. I mean I think that by and large we want to put it to bed. And, I think that we want it investigated. But, it's, it's imperative that in fact nobody here is pointing the finger and who the investigative person is going to be. If collectively, we share this, that do we want an independent. We don't want to be seen that we're looking over the shoulder of our neighbour. Maybe we could pass a motion which says that we want, in fact, this to be taken to a Judge and that we would agree not to have a member of the public have to carry this load of the money. But, that, in fact, perhaps one of us - and we would agree who that would be - we would, in fact, take it to the Judge. So, we as a Council would be saying: we want to have somebody independent do it and one of us will agree to carry the flag and take it to the Judge and we will have the independent thing, rather than have a person in the public have to pay for this. So, then we get an independent person to do it and if there's, in fact, a cost to do this, we should be paying that cost. That should not be paid for by anybody else. So, then we would have the independent thing done. None of us are looking over our neighbour's shoulder and we will deal with the results. And, that way, we get everything we want and we have a little bit of control of making sure it happens. I'm not necessarily volunteering to be the person to go to the Judge. But, we would agree on who that is. If we just flip a coin - it doesn't matter who it is. We would agree as a committee on that process. That gives us within democracy, the very best we can get, in terms of an independent process."

Ferguson (as Acting Chair) : "On those comments, Joe - "

Joe Rinaldo (General Manager, Finance and Corporate Services) : "Just to clarify and Peter may add. If the individual decides to appeal Council's decision, if you decide not to proceed, the individual does not borne the cost of the audit. It will be determined by the Ontario Court of Justice and we, as a City, will be obligated to pay that, likely, anyway. So, it's not the individual that's borne the costs of the audit. And, Peter, if I missed . . ."

Peter Barkwell (City Solicitor) : "That's correct. And, I have to say that I have, as I sat and listened to Councillor Braden, I have serious misgivings about proceeding in that way, some of which I can't articulate at the moment. Certainly, any Member of Council who was going to volunteer would need to get their own personal legal advice from their own solicitor about possible consequences to them personally if proceeding in that manner. And so, I don't think that anyone should volunteer themselves without having an opportunity to get some independent legal advice with respect to their personal, potential personal liabilities."

Ferguson (as Acting Chair) : "Councillor Braden, is that it? If I can summarize, we either receive the Report and if the author of the letter wants to pursue it further, they would appeal to the Court appeal; the Court would assign an auditor and make a judgement and the City would pay the bill. Is that roughly it? Or, Council could assign to appoint an auditor, itself and come up with a ruling. Is that a fair summation?"

Salter Hayden (Deputy Clerk / Manager Elections) : "It's my understanding, Mr. Chairman, that Council makes the decision you're going to either accept, grant the request for the audit or you're going to reject the request and then everything else is set in motion after that decision is made."

Ferguson (as Acting Chair) : "Councillor McCarthy." (before going to Councillor McCarthy, comments from Clerk) "Rose."

Rose Caterini (Deputy Clerk, Legislative) : "Mr. Chairman, if it is the will of Council to reject then you do not need recommendation (b) of this report and (a) would be amended - the last sentence after 2003 Municipal Election to say that be received and Council reject the request for a Compliance Audit."

Ferguson (as Acting Chair) : "Okay. Councillor McCarthy now. Do we have a seconder for that motion? Councillor Pearson. Further discussion on the motion? Councillor Mitchell."

Mitchell : "Could it be stated anywhere that the financial component is going to be paid for by the City . . . " (couldn't hear what he said) "It's not. Okay."

Ferguson (as Acting Chair) : "That's a given. Do you want to just re-state your motion, then, Margaret? Or, Rose?"

Rose Caterini (Deputy Clerk, Legislative) : "'That in accordance with Section 81(3) of the Municipal Elections Act, Council receive the applications submitted to the City Clerk on June 24 th and June 29 th 2004, requesting a Compliance Audit of the financial statements submitted by various candidates in the 2003 Municipal Election and that Council reject request for a Compliance Audit.'"

Ferguson (as Acting Chair) : Seconded by Councillor Pearson. Further discussion? All in favour?" (Bruckler, Collins, McCarthy, McHattie, Merulla, Morelli, Mitchell, Pearson) "Opposed?" (Braden) "Carried. Councillor McHattie?"

McHattie : "Mr. Chair, I've got a motion, which, I don't know if it makes sense, if you want it - okay, so later on, I'll be bringing a motion which relates to this, which - "

Ferguson (as Acting Chair) : "No, let's do it, let's do it now. Or, no, we have to ... okay? We'll deal with it later then. Just for the Members, Councillor McHattie has a motion, which will deal with future situations like this.

7.1 Ward Representation System (CL04006) (City Wide)
( http://www.hamilton.ca/Clerk/agendas-minutes-reports/
committee-of-the-whole/2004/Jul14/CL04006.pdf)

Ferguson (as Acting Chair) : "Members of Council. Can we do a slam dunk? How about 7.1? Does somebody want to get the Mayor? On 7.1 - We have a Mover for 7.1?" (McCarthy Moves 7.1) "Seconder, Councillor Bruckler. Further discussion? Whoa, okay. 7.1 we have a mover and a seconder. A discussion on 7.1?" (as other Members of Council file back in, along with the Mayor, Councillor Ferguson shows the Mayor, where the meeting is in the proceedings. Mayor takes the Chair, Councillor Ferguson takes his Council seat)

Mayor DiIanni : "Okay, 7.1 has been moved and seconded. I'm not sure who moved it; who seconded it, but I'm sure you know. All in . . .Questions, comments? Councillor Jackson?" (no question/comment) "Seeing none, all in favour? Carried."

Mayor DiIanni : "Lunch is next door - what were we going to do? Oh, the Arts."

Someone Councillor or Staff? : "Mr. Mayor, you wanted us to do the Arts before we break."

Mayor DiIanni : "I did, I did, but that's part of Council, though, isn't it. So, I hate to say this to those who are interested in the disposition of that. But, it's part of the Council agenda which will meet right after this meeting is over. And, I'd hate to mislead in indicating which way it's going to go. I apologize. So, we're going to adjourn for, until, what time? 1:00 pm - half hour lunch. Okay. Thanks."

End of Part 3. Return to Part 1.