Requests submitted last week to audit the election finances of eight councillors could result in charges and even dismissals from office. In addition, calculations that five corporations or unions exceeded the maximum allowable donations have implications for five additional members of council including the mayor.
The complainant, Stoney Creek resident Viv Saunders, has examined the official financial statements of every councillor as well as reviewing at least the donations recorded even by defeated candidates. Each individual submission cites multiple apparent errors, irregularities, and/or significant transgressions of the Municipal Elections Act rules.
Some present evidence of major violations such as exceeding legal spending limits or avoiding the requirement to pay campaign surpluses to the city. An example is Saunders request for an audit of the campaign finances of Tom Jackson who has represented the east mountain for more than a quarter century.
The veteran councillor collected more than twice as much money as he was permitted to spend, recording more than $24,000 of the excess as “voting day party / appreciation notices” that are exempted from the spending limits. Some of that took the form of gift cards to volunteers.
Saunders asks if these should be “deemed as cash payments and as such be shown as salaries, benefits [or] honoraria” which would require issuance of T4 tax slips. She points to a 2011 court decision which deemed a similar, though much smaller expenditure, as excessive enough to require an audit.
“[H]ypothetically, post-election honorariums may have been promised and calculated in a way that they amount to salaries and benefits/honorarium/professional fees that are properly included in pre-election expenses which would be subject to the spending limit,” ruled Justice Bellfontaine in a Mississauga case. “Post election expenses may be considered critically in light of the requirement that any surplus monies from donations are required to be … forfeited to the municipality. This raises an incentive for candidates, and creates the potential, that candidates would use the funds for purposes not related to the election to avoid having the money forfeited to the municipality.”
Jackson acknowledged utilizing 97 percent of his spending limit leaving little wiggle room if an audit concludes that some of that $24,000 should have been included as pre-election expenses. Ontario law automatically removes from office those who exceed their spending limit or fail to provide their surplus to the city.
Saunders notes that Jackson held a fundraiser less than two weeks before voting day that garnered more than $15,000 in net revenues for his campaign. She points out that even without these donations, the councillor would still have raised far more than he was allowed to spend and asks if it really was a fundraising event.
“On its face, it appears that there was not a deficit in campaign that warranted fundraising,” she argues. “It appears that the revenue created a substantial surplus in the campaign account. It appears that this event might be deemed a party. It appears that a review of the campaign bank records is a reasonable request. Copies of invitations, programs, advertisement sales etc would also be a reasonable request to help make a determination of whether this cost might be subject to the spending limit.”
The fundraiser tickets were $45 each, and Saunders’ review of listed donations of that amount or a multiple of it couldn’t account for the 438 that were sold. She also reports that the cost of printing the tickets appears to have been listed twice in Jackson’s financial statement and that the costs of several elements of the party appear to be below market value, requiring that the difference by listed as a donation to the campaign.
The Saunders’ requests also apply to councillors Pearson, Merulla, Whitehead, Collins, Pasuta, Conley and Ferguson. Each has been posted to the CATCH website along with a supplementary document detailing apparent over-contributions by one union and four corporate groups.
In a statement accompanying her audit requests, Saunders says she limited her choices to situations where she believes there was “a blatant disregard for the spirit of the Municipal Elections Act”, or where “the contravention is one of the two more serious offences that are subject to penalties”, or where it appears the city was shortchanged by an inappropriate calculation of campaign surpluses.”