March 6, 2006 Special Committee of the Whole and City Council - Compliance Audits

Present: Di Ianni, Mitchell, McCarthy, Collins, Samson, Merulla, Braden, Bratina, Kelly, Whitehead, Bruckler, McHattie, Jackson, Pearson.

Absent: Morelli, Ferguson .

Media present: Kevin Werner ( Brabant ), Andrew Dreschel and Nicole McIntrye (Spectator), Maggie Hughes (CFMU), Doug Cameron (K-Lite), Al Sweeney (CH-TV), Ken Mann (CHML)

Meeting scheduled for 2 pm , began at 2:06 pm . Both galleries filled.

[Transcription]

Mayor Di Ianni : ".Ladies and gentlemen, welcome. I'm going to call this special council meeting to order and I'm going to ask the clerk if there are any changes to the agenda."

Kevin Christenson : "Yes, Mr Mayor. For clarification, you are in Committee of the Whole. We have added correspondence from Mr Graydon Shepherd, counsel for Mr John Best. This has added as item 5.3.1 with recommendation that it be received. Both Mr Caplan and Mr Best have requested the opportunity to address committee on the issue of their compliance audits. Their requests are noted as items 5.2 and 5.3 on today's agenda. We've also received today, a request from Mr John Santarelli and Mr Jeffrey Levy, attorney for Larry Di Ianni, to address council. The two additional requests have been added as items 5.4 and 5.5 to today's agenda. A motion to wave the rules of procedure to allow the delegations the opportunity to speak today will be required.
Di Ianni: "Thank you. Um [pause] Mr Mayor, or at least Mr clerk, um. I need a verbal motion to approve the agenda as amended, please. Councillor Pearson and councillor Mitchell. And is there a motion on the additional delegation requests. Do I do that, Mr clerk?" Christenson : "Later on." Di Ianni : "Okay. So are there any declarations of interest? Well there certainly is and I'm going to do that. I'm going to ask the deputy mayor, councillor Mitchell, to come to the front please."

Dave Braden : asks off-mic if he may rise on a point of privilege. Di Ianni : "I'm going to let the deputy mayor decide." Dave Mitchell : "Thank you Mr Mayor, and welcome everybody to the gallery today. Councillor Braden, do you have a point of order or something? Point of privilege."

Braden : "Can I raise a point of privilege through you Mr Chairman. I need to make just a couple of statements and I will be brief. As some might now, on a pre-arranged holiday with my children. And I wasn't here for the week. But maybe it was lucky I wasn't here last week. I want to apologize for any misunderstanding, particularly to members of this council, for the role that I played with regard to properties that I'm associated with. I won't belabour this point, but I want to make it clear what it is that I've done, and in fact that I think I have in fact acted appropriately. Just to review. Some time ago I sought legal advice from my lawyer on whether or not I should be a participant in discussion with two properties that I'm associated with at the south end of Waterdown. At the advice of my lawyer, I acknowledged in written from what my association was with those two properties, and I lodged that with the clerk. I lodged that, not in the fact that I had a conflict of interest, but I didn't want anybody to think that I was hiding that connection. Nor have I done that with this council, nor with the council before. My lawyer's advice was, even if it isn't a conflict, and he said it wasn't, you should declare it anyway because it's just straight up front. So I took that advice, and I did that. And I declared it right in this very chamber. When we were in Waterdown, two weeks ago, in the presence of those members of council - councillor Bruckler, and Collins and the Mayor, and Mr Jackson, councillor Jackson, councillor McCarthy, councillor Merulla - I did not declare a conflict. And perhaps I should have declared simply the association with the property, because my opinion is it's not a conflict and I mentioned to one particular paper maybe it was an oversight not a legal oversight, but maybe a moral one. But I do want to say this. That in the debate in Waterdown what I made very clear was, I wasn't talking about the roads which might affect the property or boundaries. What I was interested in, and I've been consistent with everybody in this room - members of committee that is - that I thought we should try one last time to see if we could get some jobs involved in Waterdown. I didn't want Waterdown to be like Binbrook - which is unfortunately no real quality employment areas. I wasn't talking about the other issues at all. I mention this because many of you weren't at that debate, and you wouldn't have known that my comments were restricted to the fact of jobs, jobs and more jobs. Because if we didn't do it last week at council, it wouldn't have got done. I want to mention the other thing, which is I knew there's always the potential of being attacked, especially personally by a particular institution and I don't want to shy away from being attacked. You will know that at this council I don't shy away from things that are uncomfortable and I don't enjoy doing this. I don't enjoy being attacked as a person in this committee, at all. But I think, as all of you do, that we have an obligation to do what you think is right. I did what I thought was right, because I think the idea of jobs in this community is paramount. Not paramount to circumventing the rules of conflict of interest, because I think that's okay. I think what I did was okay, in terms of the declaration and the fact that it's lodged with the clerk. I just wanted to make those comments because I wasn't here last week. I certainly wasn't dodging the issue. In fact I was trying to speak. But with that said, I would just say to you, Mr chairman, thank you for the opportunity to clarify this."

Mitchell : "Thank you councillor Braden for your clarification. Mr Mayor?"

Di Ianni : "Just so that I understand, because I'm not sure it was clear, could the councillor - through you Mr deputy mayor to the councillor - to the councillor, is he declaring a conflict now or not?" Braden : .declaring a conflict now. I'm taking the advice of my lawyer which said, lodge with the clerk the interest in the property. I think that I'm abiding with the principles and in fact the letter of the law in terms of how conflict of interest - I call it conflict of interest, it's now called something else - is played out. I'm trying to clarify the thing that I didn't say is that I wanted to apologise. If any member of my peer group thinks that I have hurt the image of this council, by taking the risk and talking about jobs, then I personally apologize to you, because if anything the image of this council needs to be improved. And I am not here in any way to besmirch the image of any councillor, or of council in general. I wanted to make that clear." Di Ianni : "And just as a follow-up, and I appreciate that clarification. So the the interest was declared in the property by virtue of ownership or control but not a conflict given what was before council. Did I get that correct?" Braden confirms, off-mic. Di Ianni : "Thank you."

Mitchell : "And thank you for the clarification. Mayor Di Ianni, it's been brought to my attention by the clerk's department that you may officially declare your conflict of interest now please." Di Ianni : "Yes, and the conflict is obviously that the subject of discussion affects me personally and consequently I will not be engaging in any debate or vote." Mitchell : "Thank you. And that has been noted by the clerk's department. Members of council, before we entertain Mrs Chapman, can I have a verbal motion to invoke the rules of procedure to allow Messrs Caplan, Best, Santarelli and Levy to address us today, please. Moved by Jackson , seconded by Collins. All in favour? Carried. Thank you very much. Thank you Mrs Chapman and can you please proceed down with your presentation." [ 8:35 ]

Joanna Chapman : [greeted by applause]" Councillors are now in the difficult position of deciding whether to proceed against candidates who ran in the 2003 municipal election. I don't intend to say anything about Mr Best or Mr Caplan. The compliance audits appear to cover the ground. However, I do have comments about the general process and about the Larry Di Ianni audits. Like many others in the community, I believe there need to be some changes in the Municipal Elections Act. The main ones are: to end corporate donations, so that all contributors can be clearly identified, Establish an Election Review Board, so that no elector has to go through what I have endured. In addition, the practice of allowing candidates to extend their campaign period for a year after the actual election, should be terminated. The present system allows contributors to not only finance a campaign up to the election, but also to pour money in after their candidate has been elected. This seems a bit like being permitted to bet on a horse after the race has been won, and there seems not much point in being strict about gifts to council members if this is allowed. However, despite these shortcomings, I believe the Municipal Elections Act is clear and easy to understand regarding donations. In addition, candidates themselves receive a guide which puts the Act into very plain language. It's unfortunate that the audit has now cost the taxpayers of Hamilton over $60,000 and that the recent hiring of a lawyer has cost more on top of that. However, as an elector I followed the only route available to me under the Municipal Elections Act. If there had been a Review Board, believe you me I would have taken my concerns there. I would like to say that I believe that the money was well spent, but I can't possibly do that for the following reasons.

"The ruling of Justice Culver of the Ontario Court of Justice specifically states: The candidate's filing form 5 was sworn on March 31, 2004 . The period covered by the filing ended on December 31 st , 2003. All of the over-contributions were easily identifiable in the filing. The candidate swore a declaration confirming that the schedules which reveal these over-contributions, were true and correct. The candidate has a statutory obligation pursuant to s. 69 to ensure the accuracy of the record . First, the Ontario Court of Justice has indicated very real concerns about this candidate and about these filings. Second, despite the Court ruling based on the f irst financial statement , the auditor performed a Compliance Audit on the third financial statement , covering a different period to the end of 2004 - a full year after the first financial statement which was before the court. The sworn financial statement of March 2004 , that the court made its ruling on, has not been audited.

"Had the auditor looked at the first financial statement he would have seen amounts over $750.00 incorrectly recorded, he would have seen changed names and addresses, and other infractions - all of which account for the return of over $25,000 contributions. He would have seen exactly the things that took me before the courts in the first place. These changes cannot be reasonably ascribed as 'clerical errors'. I do not see how monies can be split between two entities, or records changed inadvertently. I cannot believe that the Municipal Elections Act can be interpreted to say, that an elector can ask for a compliance audit based on one financial statement and have the audit performed on a completely different one, with no consideration at all of the document that the court found showed an audit was necessary. This appears to render the whole process completely meaningless. It's akin to being caught speeding and then reducing your speed to the limit for the next 100 miles or so and claiming that you did nothing wrong. It seems clearly unreasonable.

"We have also been asked to believe that Larry Di Ianni's campaign was run by volunteers and was disorganized and amateurish. However the truth appears to be very different. Campaign contributions were handled by Larry Di Ianni, himself, or Larry Russell. This is what his own campaign literature says. This was a supremely efficient and effective campaign which pulled Larry Di Ianni from a distant second to a winner in the mayoralty campaign. This campaign seems to have been run by paid professionals with previous campaign experience. This does not appear to be a campaign driven by volunteers. This was not a campaign like other campaigns. This one was very different. It still also remains unclear who worked as campaign manager , or who organized the fund raising functions and other duties in the post election campaign period, when two extensions were granted. It is also unclear if these workers were paid and by whom.

"At the last Council meeting, councillors wondered who was ultimately responsible for over-contributions. My answer would be the contributor who gives it, plus the candidate who accepts the money and does not return it in a timely fashion. A candidate is not absolved of responsibility under the Act. The candidate, alone, is responsible for giving proper direction on campaign donations.This is what the Act expressly says. Finally, given that the auditor clearly acknowledges he has only audited the third filing, and not the sworn statement of March 2004 , where the major violations appear to have occurred, it remains my firm belief that the only way to properly examine the facts of this case is to put the matter before the courts. To do otherwise appears to do a great disservice to the people of Hamilton . Thank you for hearing me. [extended applause]. [ 15:58 ]

Mitchell : Members of committee are there are any questions for . [interrupted by someone speaking from the gallery who objects to people clapping in the council chambers. His comments are met with some applause] Absolutely sir. I will request all the members of the gallery to please respect the council chambers and try to refrain from too much clapping or noise to one way or the other, please. Members of committee, are there any questions for Mrs Chapman. Seeing none, can I have a motion to receive the presentation, please? Moved by Pearson, seconded by Whitehead. All in favour? Carried. Thank you. We have one additional piece of correspondence dated February 18. I need a motion to receive the additional correspondence, please. That is moved by McCarthy, seconded by McHattie. All in favour? Carried. Mr Caplan, please proceed to the presentation. Welcome here and . [ 17:12 ]

Marvin Caplan : "Mr chairman, I would suggest if people feel the need to applaud, I wouldn't object. [laughter and applause]. Mr chairman, members of council: Ms Chapman had concerns that some candidates received excess donations from developers. She had and has the right to ask her questions, and have them answered as any citizen does. Ms Chapman original allegations against me have proven to be baseless. I've been totally exonerated of the accusation that I received excess contributions from related customers, from related companies. Highlight is 2020. If council had appropriately responded to Ms Chapman's concerns, or as she said, if there was an alternative way of dealing with these things, we wouldn't be here. While I do not dispute a citizen's right to question and receive answers, I would suggest that despite her right to express her concerns, this process of hearings, audits, lawyers and judges is excessively confrontational. A more civil process could and should have happened. My belief is that this process was and is counterproductive and should end now. The candidates, Mr chairman, is there anybody else that's listed to speak at this time?" Mitchell : "No, Mr Caplan, you have the floor, you have the mic."

Caplan : "Thank you. The candidate for council included the, the candidates for council included in her original allegations either spoke with Ms Chapman or had their lawyers speak to her. She alone chose not to concern herself with those who she alone felt that sufficiently repented. She arbitrarily continued her actions against only three candidates. She also ignored candidates, she alone decided were not worth questioning. Ms Chapman acted in an arbitrary manner when she started this process. Council asked me to submit to an audit of my entire campaign, and not just the original allegations. Again, I point out, of which I have been absolved. Once you widened the audit beyond the original questions, you opened the door that only three candidates were forced to walk through. At that point I believe council too acted in an arbitrary fashion. The audit undertaken by Mr Froese two and a half years after the election discovered that I had misplaced my invoices and bank statements, after they had been submitted to the original audit. The audited statement has all of the detail required, is no file with the city, has been assiduously examined by Ms Chapman and Mr Froese. Every misplaced invoice can be duplicated and Mr Froese and his associates have already duplicated the bank records. He also discovered I used the names on cheques, rather than doing a corporate search on every donation. And members of council, I actually misspelled a name. Finally, he did not discuss with me the $650 deposited but seemingly not clearly accounted for. For the information of Ms Chapman and you, the funds in question represented a deposit replacing an NSF cheque.

"Most of you know me well. If you believe I acted in bad faith, send this matter before a judge. If you believe I'm hiding something, send this matter before a judge. If you believe that using the name on a cheque rather than researching the proper corporate name is a crime, send this matter before a judge. Mr Justice Zuraw advised me that if I continued to be part of the hearings on this issue in the first round of this saga, I could be held liable for costs. I withdrew. If you send this matter to court, I will have no choice but to vigorously defend myself. The defence will include a test of what is reasonable for a candidate to do during an election. That test of reasonableness will ask if in fact I acted differently from any other candidate. Did any other candidate check corporate records? Has every candidate kept all records for the required time? In fact, did the majority of the candidates meet the standards I set in accepting donations? Several candidates found errors, returned excess funds, and were forgiven by Ms Chapman at her sole discretion. No such findings were made in my case, because there were none.

"Democracy is a precious thing. On the evening of my defeat to Mr McHattie, I said - thank god we live in a country where incumbents can be defeated. You must decide, members of council, whether continuing this process does in fact serve democracy. Do you believe sending me to court will make it easier to find good candidates from the business community to serve this city? Do you believe that adding to the emotionally draining, humiliating, time wasting and expensive prosecution that I have already been subject to will advance this municipality? If you do, send this matter back to the courts. If however, you feel the tens of thousands of dollars of public funds that has been expended in this matter is sufficient that you can turn your attention to the other minor - well, that's an editorial - the other issues that face you. You know, I think that spending even more taxpayers' money, more time and energy to these allegations, is not more important than addressing the issues you are responsible for addressing. If you disagree with me, if you think this is more important than the hundreds of issues that do face you, then this attack, this attack on my integrity and the integrity of those who offer to serve the public should be continued. If you haven't already asked your legal counsel about the possibility of this community facing substantial additional costs, please do so before making your decision on this matter. If you believe that continuing this process does nothing to serve the cause of democracy, and in fact is more likely to prevent good people from running, say enough. Close this chapter of my life and allow me to move on with earning a living, and continuing to contribute to the community I so love. My records have now been subject to a second audit. Mr Froese has told you he does not believe I knowingly did anything wrong. Ms Chapman's questions have been asked and answered. Members of council, enough already. Thank you for allowing me to address you. I'm prepared to answer any questions you might have." [25:00]

Mitchell : "Thank you Mr Caplan. Any questions for Mr Caplan? Seeing none, may have a motion to receive his presentation, please? Moved by councillor Braden, seconded by councillor Bruckler. All in favour? Carried. Thank you. Now Mr Best, can you please proceed to the presentation podium."

John Best : [25:40]. "Well members of council, thank you for this opportunity. In 2003, for the only time in my life, I put my name on a ballot. I worked hard in the campaign. I thoroughly enjoyed the experience but in the end the voters of ward three did not share my enthusiasm for my candidacy. So the day after the election, I got a truck. I went around the ward. I took down my signs. And the next day I went back to work thinking that this little adventure was over. Little did I know that two and a half years later I'd be standing here defending myself.

"For the record, I would like to recap my non-compliance issues. In the course of filing, I made one fairly serious omission that resulted in the bulk of my difficulty. I had simply overlooked, or missed the line, that donations from charitable organization were not allowed in municipal elections. It was in the book, I missed it, and I've taken responsibility for that publicly. Why I made the mistake, I don't know, but I guess it's fair to say I'm better known as a donor. That was the first time I'd ever received donations and I've been to countless fundraising events, as many of you have, and seen executive directors of charities, hospital foundations, you name it, at these events, and handing out cheques. But of course that's only at provincial and federal levels, not municipal. But I think that was probably part of the source of my error. In any event, I take responsibility. So we accepted $719.33 from a charitable organization. And after Ms Chapman filed her documents, I immediately contacted the donor who was quite adamant that the donation was proper. And then we went back and forth for quite a while with that discussion, even going to the point of consulting chapters in the Income Tax Act which seemed initially to support the donations. But finally I got some independent counsel, and once I was satisfied in my own mind that the donation was not allowable, I returned the money. And that was all done long before the audits were ordered. The subsequent audit by Mr Froese revealed two other relatively minor items - another charitable donation of $73.11, and an overpayment by another donor of $146.22. Both of these due to errors in the recording of the sale of tickets to a fundraising event that had occurred four months before the election. Those donations were immediately returned.

"So the audit found exactly $219.33 in non-allowable contributions that we hadn't already dealt with. Total money sent back - $936.88 in a campaign that I now say amazingly raised close to $28,000. That's about 3.3% and believe me I'm not happy with that even though it was not that huge an amount on a percentage basis. I don't like making mistakes, and I sure as hell don't like making them publically. In all between the original complaints Ms Chapman made, and then some additional ones she put before the audit, unknown to me, as he was doing the audit, there were six allegations made and only one was upheld by the auditor. And that one as I mentioned I'd already addressed prior to the audit.

"You have a note from Mr Shepherd that in his opinion, the errors in the auditors report simply do not justify the laying of charges. Errors yes, deliberate no. The trust of the voter was not betrayed. The outcome of the election was not affected. There has been full disclosure through the audit and the funds have all been returned. Short of some kind of perverse satisfaction, what would possibly be gained by more litigation, more expense? I would urge members to go back to your first campaign and ask yourself if you could have made similar errors. Even Ms Chapman, when she dropped her action against one of the candidates whom she had originally accused, said she was dropping the action because the candidate's errors didn't meet a standard she described as the "scale of violation". Sensing a possible opening, I emailed Ms Chapman to ask where my $936.88 fit in on this scale of violation test, but she did not respond. You've had some advice from corporate counsel suggesting there might be negative consequences to proceeding with charges based on audit reports which make no finding of deliberate wrongdoing. I would urge you not to fall into the practice of the complainant where you charge first and ask questions later. I know you've sought second and third opinions on this matter, but at the end of the day lawyers are counsel; they don't give orders.

"For $936.88 worth of campaign funding errors, I have been through a two year ordeal, the effect of which far outweighs the magnitude of those errors. My prolonged exposure to this situation is in part of the initial decision by this corporation in 2004 to oppose an audit, and then later in 2005, to deny me an immediate audit as I had requested. I hope counsel advising you is in possession of those facts.

"But my biggest concern is with the process where a private citizen gets to make damaging accusations about people under the protection and privilege of privately filed court documents, and then gets to decide who is arbitrarily dropped from the action and who is kept on the list. And believe me, if you were on the list and got dropped, I'm happy for you. Then the complainant gets to make up and apply subjective critieria like the doctrine of scale of violation, and then in my cases is wrong on five of the six allegations. I have a real problem with a process that allows so much subjectivity and is so prone to error. Ms Chapman insists that the process from the beginning has been fair and was applied equally to all candidates - that this is just a simple quest for truth. In her sworn statements, she says she checked donations to all candidates who ran in the 2003 municipal election in Hamilton - and I guess that's all 56 presumably - and as you can see from the evidence that was produced, nothing escaped her attention. Forgetting to put the word limited behind a company's name; multiple cheques from the same address; multiple donations from entities of similar name; wrong addresses or no addresses. And I would say that even those of us who found ourselves on the receiving end of this scrutiny had to feel some sense of admiration for Ms Chapman's thoroughness and attention to detail.

"Which brings us to the Christopherson filing, and I've produced a piece of correspondence with regard to the Christopherson filing and I've asked the clerk to distribute it to you. It was, after all, the second largest filing of the 2003 election. And believe me, my purpose is not to embarrass Mr Christopherson. He is beyond the reach of the Act at this point, and besides I have no reason to believe that he or his donors did anything deliberate to contravene the Act. None the less there are more than a dozen instances where if the same level of scrutiny was applied by the complainant as was applied to those of use here today, that surely enough questions would have been raised to have had that file added to the action. The amount of money potentially involved in these instances is significant. Is it really to be believed that someone who could be so precise in identifying possible contraventions in the filings of other candidates, would not have serious questions about many of those transactions? When asked about this by the media, the complainant says she had questions about a couple of union contributions which were answered to her satisfaction, but beyond that she saw nothing glaring. Well, lets take a look. You've got the sheets in front of you. I see five instances of union donations, not a couple, amounting to $5500 that raise questions about either eligibility to donate and possible over-contributions. Are these union councils and promotional and educational funds legitimate bargaining agencies that are allowed to make municipal donations? I frankly don't know. I see law firms making donations, something that the complainant pointed out as not allowed. I see an accounting partnership making a donation, contrary to the Act. I see an individual donor apparently over the limit by $500. I see improper addresses, or no addresses - something that bothered the complainant in other people's files. I see three apparently unincorporated companies making donations - all contrary to the Act. In all there are 12 instances at least where there are questions of either possible over-contributions or ineligibility to contribute involving around $9300. Now had this filing gone to an audit, it's entirely possible that some of these questions might end up not being contraventions of the Act, just as five out of six allegations entered against me were not violations. But there are also some that on the face of it appear to be clear contraventions and they involve a lot more than $936.88, I might add.

"I raise this only to suggest to you that laying charges in a situation where first of all no finding of deliberate wrongdoing has been made by the auditor, and secondly where it increasingly appears the list of respondents in front of you today is arrived at on the basis of questionable criteria, that it might be prudent to pause. And frankly that's the danger when you have private citizens trying to be judge and jury. I couldn't agree with Ms Chapman more that we need an independent tribunal to deal with these issues in the future. If your council were to be considering Mr Christopherson's filing, I wonder what the advice would be with regard to further action. Will you be comfortable charging people if you believe there were other candidates, not named, with compliance issues of a similar or greater nature? And I'm not arguing for an audit of all 56. I wouldn't wish this on anybody believe me.

"I know some of you are concerned that no matter what you do today, that this matter will probably not be put to rest. Unlike the last time, however, there appears to be no process to overturn your decision. So you can only do what you believe is right and fair. And what is right in my view, it will come as no surprise, is to receive the report, period. Going the extra step will achieve nothing of knowledge beyond what the auditor has already turned up. The facts are out there for everybody to see. Courts are here to dispense justice, not revenge. People have paid in personal costs and in damage to reputation. If there are still those who want some kind of pronouncement from on high, on this issue, they'll get their wish in November.

"I never cease to marvel that our mayor, after deducting his costs, has been working for minimum wage for the last two and a half years and still he's gone about his business, and kept his head up, and conducted himself with dignity and good grace in the face of relentless personal attacks [applause]. He's maintained a punishing work schedule. Wherever anybody is on this issue, he deserves credit for that. We have a deeply divided city. I believe there are those who have simply been unable to accept the results of the last municipal election and have worked against the wishes of the majority, using every means at their disposal - character assassination, innuendo, anonymous tips to the media, hiding behind blogs, and of course litigation. It's getting ugly around here. Political discourse is giving way to a culture - I said ugly, they spoke up. Political discourse is giving way to a culture of gotcha politics, dirty tricks.

"The same people who want to see this matter through to the last pound of flesh are the same ones who want the city to drop charges against those who cost us tens of millions of dollars by concocting delays for Red Hill [noise from galleries]. There is an accusatory, punishing, humourless tone to civic dialogue these days. For the sake of this city, I think we have to begin to counter this negative climate. An election year would be a good time to start. This city is getting a black eye in the minds of those who would otherwise invest here. They're going to Woodstock and Brantford because this place is just too dysfunctional. In your decision today" Interrupted by Mitchell : "Mr Best, are you getting close to completion?" Best : "Yes". Mitchell : "Okay. Thank you." Best : "In your decision today you have a chance to turn around some of this negativity because if you go the other way you're only going to energize these destructive forces. Finally, I would like you to consider some well meaning citizen out there who's thinking of offering himself for the first time for public office. What would that person think if they were to look at my experience as a first time candidate? I hope we haven't scared away some good people, but I think we have. When this matter came up, I offered to be audited immediately. When the audits were ordered, I again asked for an immediate audit and was refused by the corporation. During the audit, I was fully cooperative and candid with the auditor. I hope that candour is not now to be used against me. In the end I can only trust that good judgement and fairness will prevail today. I ask you to think carefully about the consequences of your deliberations. Thank you for your attention, and if you have any questions I'd be happy to answer them". [applause] [40:11]

Mitchell : "Thank you Mr Best. Any questions for Mr Best. Seeing none can I. Councillor Samson?". Samson : "Yes I guess it really to Mr Barkwell but it's with regard to a comment that Mr Best made." Mitchell : "To Mr Barkwell, go ahead, please." Samson : "Mr Barkwell, I'm of the impression that our decision either way today can go to a judicial review. Is that correct, or not?" Peter Barkwell : "Through you Mr deputy mayor, a decision of this council, almost any decision of this council, can be judicially reviewed, on the instance of a ratepayer, including the decision which you make today." Mitchell : "Thank you. So I have a mover and seconder. All in favour? Mr Best, thank you. I have some added correspondence from Graydon Shepherd and from Mr Best that was handed in here to us and the financial statements, so I need a motion to receive this added correspondence. Moved by Kelly, seconded by Jackson . All in favour? Carried. Thank you. 5.4 I have Mr John Santarelli. John would you come down and put your presentation on at the podium please."

[41:42] John Santarelli: "Thank you Mr deputy mayor, members of council. I like to introduce myself. My name is John Santarelli. I was a former councillor for the City of Stoney Creek for 15 years and I sat on council with Mayor Larry Di Ianni. I make no bones about it. Mayor Larry Di Ianni and I go back quite a ways, to university, almost over 30 years. I've known him. His family knows my family. We're very good friends. And not only do I know the mayor. I also know councillor Bruckler, whom I chaired Rec and Parks with for many years on council. I know my colleague, my former colleague, Maria Pearson. I also councillor Art Samson who was a history teacher at Cathedral High School when I was a student there. I also know Bob Bratina from hearing from him, from hearing and waking up to him every morning. I also know Bob Kelly, Tom Jackson. I know a number of people. And Sam Merulla who used to play football at St John de Brebeuf while I coached at St Thomas More. So I'm not here only as a friend of and dear colleague of the mayor.

"I'm here to speak as a taxpayer of this municipality. Members of council you've heard all the arguments. I'm not going to repeat them, from the previous speakers. But I sure am glad from the previous speaker who acknowledged the hard work that our mayor has done. And in the past two years, you can actually see all the hard work he has done. I hardly even see him, as I had before he took office. And I'll tell you this municipality hasn't even had or received the amount or the infusion of money towards any kind of project as we have seen in the last couple of years when Mayor Larry Di Ianni took office [applause]. And this by the way is not an election speech at all [laughter] because after what I've seen happening in the last couple of years which some people have gone through, I wouldn't want it for the world. I'll tell you that. And by the way. Here's something that I'll throw out. Even if you look at my campaign expenditures, I'm sure that there are some inequities in it. They may have been overlooked, and so, and I'm sure if we look at each and every one of yours, we can actually see inequities. All I can say is enough is enough.

"My tax dollars are important, just like everyone else's. Sixty thousand dollars plus. I teach in an inner city school where kids have to come for breakfast. Now think of what $60,000 could have done for inner city schools in this municipality? [noise from gallery] Why, because it's been wasted. Wasted on what - democracy? [more noise from the gallery] I don't think so." Mitchell : "Order from the gallery, please." Santarelli : "It's okay, Mr deputy mayor. I'm used to this stuff. All I'm saying is council, be prudent and wise in the decision today and make sure that we put an end to the spending that we've done so far. And maybe that money could be put to use somewhere else where it would be good for this whole municipality. Thank you very much." [applause] [45:34]

Mitchell : "Thank you Mr Santarelli. Any questions for Mr Santarelli? Seeing none can I have a motion to receive this presentation please. Moved by Pearson, seconded by Merulla. All in favour? Carried. Thank you. Can I have Mr Jeffrey Levy come down and put a presentation at the podium, please. Mr Levy. Oh, am I saying that right, Mr Levy? Levy, okay. Thank you. Madame clerk, can we have another glass of water there please."

[46:25] Jeffrey Levy : "Yes Mr deputy mayor, members of council, thank you for giving me the opportunity to speak to you this afternoon. I'll be very brief. As many of you may know, some of you may not, I am counsel to the mayor, Larry Di Ianni, and it's with a pleasure that I represent him. I represented him at the application before Justice Culver in the Ontario Court of Justice.

"I speak, therefore today, on one issue and one issue only. You have heard throughout the last year and a half or so from a number of people. You have heard from Mrs Chapman. She has spoken to you, addressed you on at least two occasions. You have received correspondence from her. You've received correspondence from her lawyer. You heard today from Mr Caplan and Mr Best, both of whom were candidates in the last election. Both of whom came up on the short end of the vote and were permitted to address you, first on the issue of the request for a compliance audit, and secondly on the issue facing you today as it dealt with them personally. You heard from Mr Santarelli, and I certainly appreciate his comments. But there's one person you have never heard from in this room on this issue. And that is Mayor Larry Di Ianni. And there's a reason for that. The reason is that he is bound by the Municipal Conflict of Interest Act not to address you on this issue. He won. He's a member of council, serving as your mayor. As a result, the Municipal Conflict of Interest Act provides that he has to declare a conflict of interest as he did this afternoon, and as he has done each and every time this issue has been before you.

"And not only does he have to declare a conflict of interest, but that also means that he's not entitled to address any of the issues raised, even though he is the person to whom there will be the greatest impact. And I say this not to attempt to influence you in any way on your decision you have to make. I say it merely for you to consider that. I'm sure the mayor would have loved to have stood up here, in his normal place before you, and addressed these issues, and told you what he thinks personally. But he can't do that. I can't do that on his behalf, and I'm not doing that. I'm simply wanting to point out to you, and to members of the public who may otherwise not know this, that the reason the Mayor has never addressed you on this issue, as you know, members of council, is because he is not entitled to.

"In my view, quite frankly, that's a violation of his rights under section 15 of the Charter of Rights and Freedoms, because he's not equal to Mr Best and Mr Caplan who also were candidates in the election and were entitled to address you. But that's perhaps an issue for another day, and another forum. But I would ask you simply in your deliberations to consider, you have not heard from Mr Di Ianni, because he has not been entitled to address you. Thank you very much." [49:36]

Mitchell : "Thank you Mr Levy. Any questions of Mr Levy? Motion to receive his presentation? Moved by Collins, seconded by Pearson. All in favour? Carried. Thank you. Members of council, prior to dealing with items 6.1 to 6.4, I'm going to need a motion to move into camera to actually receive advice, subject to solicitor-client privilege. Moved by Collins, seconded by Kelly. All in favour? Carried. Thank you. At this time I have to ask all the members of the gallery to please vacate the council chambers. And when the in camera section is over you'll be invited back in again. Thank you." [50:13]

[Committee of the Whole went in camera for approximately two hours. When they emerged, the following took place.]

Mitchell [in the chair]: "was referred from council and 6.1. We have a motion here, addendum, Mr Clerk moved by McCarthy, and seconded by Bratina, to the report to the City of Hamilton respecting the municipal election compliance audit on campaign finances of candidate Larry Di Ianni. And I have a mover and seconder for that. Mr Clerk would you like to read the document please.

Christenson : Through you Mr deputy mayor. That the City of Hamilton institute the laying of charges against Larry Di Ianni under the Municipal Elections Act 1996, Chapter 32 as amended, and (b) that the charges to be laid shall be those for which reasonable and probable grounds exist for believing that an offence has been committed as detailed in the legal opinion of Timothy J Wilkin dated March 3, 2006; and (c) that the City Solicitor shall report back to Committee of the Whole at the earliest opportunity, setting out for council's approval an appropriate retainer of outside counsel to have carriage of the prosecution of the charges."

Mitchell asked for all in favour off-mic. "One opposed. Please record councillor Kelly as being opposed. Item number two, addendum to report for the city of Hamilton respecting the municipal election compliance audit for the campaign finances campaign candidate Marvin Caplan, moved by Collins, seconded by McCarthy. All in favour? Carried. Opposed? Recorded as opposed, councillor Kelly, please. Item number three, addendum to report for the city of Hamilton respecting the municipal election compliance audit for the campaign finances of candidate John Best, and I have moved by Braden, seconded by McHattie. All in favour? Carried. Opposed? Please record councillor Kelly. And the last item. My Mayor?"

Di Ianni : "Just a question through you to the clerk on the Best and Caplan motions. Am I entitled to vote for those?" Mitchell: "Clarification, Mr clerk?" Christenson : "Through you Mr deputy mayor, that would be at the discretion of the mayor to determine if he has a conflict of interest in those, in that area, or not. I wouldn't be in a position to advise him of that." Di Ianni : "And so mine has been disposed of, and that's fine. But the other two are obviously separate from mine, and you're saying however I still have to determine in my own mind whether I have a conflict with those." Christenson : "Through you Mr deputy mayor, that's correct." Di Ianni : "Well I think the prudent thing to do is when in doubt, stay out, so I'll stay out."

Christenson : "So I would need on both of those, including the first motion, and the second and third one which we have just addressed, Mayor Di Ianni to declare his interest for those reasons." Mitchell : "And that's so noted. Mayor Di Ianni, that's fine, on all three items. The fourth and last recommendation here is for the release of the private and confidential documents and that's moved by Samson and seconded by Jackson , that the legal opinion of Timothy J Wilkin dated March 3, 2006 and the report be released as public documents. All in favour? Opposed? Seeing any opposed? Councillor Kelly, question?"

Kelly : "Yeah, just a point of clarification. Does that also include our solicitor's report which is also part of that documentation?" Mitchell: "It was my understanding that that was both reports." Kelly : "Good." Mitchell : "That clarification madame clerk, please. Thank you. And then from there. Mr clerk?"

Christenson : "The only other order of business that you have is item 5, correspondence from Joanna Chapman dated February 14, 2008 . You need a mover and seconder that that correspondence be received." Mitchell : "Moved by McCarthy, seconded by Whitehead. All in favour of that? Carried. Thank you. Motion to adjourn, and we have to come back in council, so it's a 15 minute break I believe for staff to have to prepare their report to come back to council. And Mayor Di Ianni, you'll be chairing that council meeting again, please. All in favour of adjournment? Moved by McCarthy, seconded by Whitehead. Carried. Thank you. Five minutes. Council members it'll only be five minutes now because the majority of the report has been typed up." [ 4:27 ]

[The vote on the three motions on Di Ianni, Caplan and Best was 12-1. In favour were Braden, Bratina, Bruckler, Collins, Jackson, McCarthy, McHattie, Merulla, Mitchell, Pearson, Samson, Whitehead. Opposed (recorded) was Kelly. Absent were Morelli, Ferguson . Declared conflict of interest: Di Ianni]

[City Council met subsequently and ratified the decision. After the council meeting was adjourned, Mayor Di Ianni made a statement:]

Di Ianni: ".and I wanted to make the statement after the council meeting was officially over, just not to confuse the issue around whether I should be making any statements or not. Mr deputy mayor, members of council, members of the press and any remaining members of the public, and certain members of staff. I understand exactly what happened, obviously, and I actually want to acknowledge the fact that this must have been a very difficult and to some extent excruciating meeting for the members of council. And I know that it was, and I know that you take your responsibility very seriously and in fact discharge them in that manner. And believe it or not I'm very proud of the way that you comport yourselves. I'm obviously pleased and looking forward to taking this issue out of the political arena, into a court of law - obviously that's where it's going - where the the atmosphere is less political, let's say, and people look at the facts as they are in evidence. So I welcome that. And I want to thank members of council for discharging their duties to the best of their abilities. I must say that I do feel very badly for John Best and for Marvin Caplan who were dragged into this because I feel of me, and I've been the target here from the beginning. And I painted the bulls-eye on myself through the campaign myself, so I'm not ducking any responsibility for that. But there's been a political agenda afoot perpetrated by some folks who are right here in this room. And we'll let the people in November decide who's side they really are on. But all I want to say is that I apologize to John and to Marvin for having dragged them into this And for other members of council in the earlier days as well, having had your names on the list, I'm sure were because of an interest in wanting to seem fair as this thing was unfolding. And so all I can say to members of council, I look forward to working with you for the next number of months and my resolve is even more confirmed, today at this hour, than it was this morning when I registered for the campaign. And I look forward to letting the people of Hamilton decide on who there leader should be.' [2:55] Thank you." Mitchell : "Thank you Mr Mayor." [Someone spoke from the audience]. Di Ianni : "Thank you Shekar. Thank you Shekar. God bless you. However, let me just take full responsibility and I'll be making additional statements later on. But God bless you, Shekar. I thank you for your support." [4:06]