Mel and his minions close ranks as spending scandal unravels
we take you now to the council chamber at Toronto City Hall and the final meeting of 2001. It’s late Thursday afternoon (December 6) and councillors who’ve spent more than 12 hours behind closed doors discussing a computer leasing deal have now allowed the public back in.The city is taking MFP Financial Services of Mississauga to court over a $43-million contract that somehow ballooned to more than $80-million.
Some local politicians think taxpayers should know how things got so far out of control. Councillor Michael Walker has the floor and he’s questioning Joan Anderton, the commissioner of corporate services, who’s responsible for the city’s information and technology division.
Walker: Who’s the lobbyist for this company?
Anderton: I don’t know the answer to that, councillor.
Walker: Did they have a lawyer representing them in any dealings?
Anderton: With respect to what, councillor?
Walker: The approval of this contract.
Anderton: Are you talking about the original contract in 1999?
Anderton: I was not a party to those discussions, councillor. I was not here.
Walker: Who was? Do you not have the information? I mean, you have been here.
Anderton: Councillor, you are asking for information that would have been available to parties to that agreement in July of 99, and there is no one here that was party to that agreement in 99.
Walker: You’re the commissioner. I mean, you can’t take the fifth on this.
In jumps Case Ootes, the deputy mayor.
Ootes: She’s answered the question.
Walker: Could you give me the names of the officers of MFP Financial Services? Who are the officers, then? Can you give me these names?
Anderton: I can’t give you their names off the top of my head, councillor. That information is available on their Web site page on the Internet if you wish to look for it.
Walker: Well, who signed the contract for them when they came to the city? Who signed it?
Anderton: I don’t have that information with me, councillor. The master agreement is not here in my hands.
Walker: And you can’t remember? With all the swirling of controversy over this, you can’t remember? Can you remember the name of one officer in MFP Financial Services?
Ootes: I would expect the solicitor to advise staff whether or not it’s appropriate to answer that in public. I think there’s some question here.
Walker: What question? I’m just trying to find out who we’ve been dealing with. I’ve got a company name and I’d like to know some of the officers. I’d like to know who signed the contract. I’d like to know if they had a lobbyist.
Ootes: We’ve heard your question. I’m asking the solicitor to give our commissioner advice in terms of answering the question, OK?
Enter James Anderson, director of municipal law in the city solicitor’s office.
Anderson: In terms of that information, the answer, I think, is that we don’t have that information here right now.
Walker: You don’t have that information? Can you tell me who signed the contract for them?
Anderson: I don’t have that information with me.
Walker: Well, I think maybe we should hold this down (stop the discussion) and you get the information. I can’t believe that we’ve been through this and you don’t have that basic information.
Ootes: Perhaps staff could get that information. I’m not sure of the relevance of it at this point. Any further questions of staff?.
Walker: We can’t, because they don’t have any answers.
But Walker keeps asking for them anyway. Did MFP have a box at the Air Canada Centre? Did the company entertain municipal politicians and bureaucrats there? Did MFP have a corporate plane at its disposal?
Walker gets nowhere with the solicitor, ending up with a bunch of “can’t says, don’t knows and won’t tells (unless it’s in private).”
Lawyer Anderson then turns things over to James Ridge, acting executive director of the city’s information and technology division.
As soon as the Walker grilling begins, Ootes cuts him off.
“Councillor, your time is up,” the deputy mayor rules. Walker protests. Ootes insists. “Your time’s up, OK? No further questions.”
What Walker’s trying to do is put on the public record information that’s common knowledge around City Hall.
The lobbyist for MFP is Jeff Lyons, a lawyer who’s been a key fundraiser for Mayor Mel Lastman and other councillors His Washup considers political allies. MFP made notable contributions to Lastman’s re-election campaign last year and has been a major sponsor of his annual charity golf tournament.
Walker wants the name of someone who works for MFP Financial Services. How about Vince Nigro, a company executive? He was a Lastman aide during the mayor’s first megacity term. Nigro left Lastman’s office for a job with the Toronto Economic Development Corporation (TEDCO), the city agency embroiled in a leasing controversy of its own related to an irregular waterfront land transaction with Steve Stavro, the grocer who’s top boss of the Toronto Maple Leafs.
As the commissioner of corporate services made clear, Nigro isn’t the only person who moved on from City Hall. Wanda Liczyk, the former chief financial officer who was prominent in negotiations with MFP, is now a senior executive with Toronto Hydro. Jim Andrew, once head of information and technology, is also long gone. And Lana Viinamae, director of capital projects for the city’s I&T division — whom, insiders say, Lyons has spent considerable energy promoting as the division’s next executive director — is currently under suspension. By the way, Lyons has also taken the city to court over the already toothless lobbyist registry it put in place.
As for the box at the ACC, it’s no big secret that city politicians and senior staff, have been entertained there by, among others, Dash Domi, brother of Maple Leafs tough guy Tie. Dash happens to be one of MFP’s top account executives. He’s also a friend of Tom Jakobek, the former council budget chief who left politics just last year.
It was Jakobek who moved a motion that allowed the MFP contract to be extended from three years to five years without further council approval. The interest rate charged on the leasing contract also increased from around 4.5 per cent to 12 per cent. That, apparently, is what caused the city’s costs to skyrocket.
As for that corporate aircraft? There’s been talk aplenty about MFP flying senior staff to Ottawa for a Leafs-Senators playoff game shortly before Toronto signed its lease with the company. The city’s conflict-of-interest guidelines state that “employees may not accept gifts, money or favours — including a benefit to family members, friends or business associates — for doing work that the city pays them to do.”
What has many councillors concerned is that the controversy surrounding the MFP contract is just the tip of a very big iceberg. They also fear that the city lawsuit’s true objective is to keep a tight lid on things while an out-of-court settlement is worked out with the firm.
Any arrangement made would pay the city very little financially but would provide the benefit of a “confidentiality agreement” to keep details of what really happened during the leasing contract negotiations under heavy wraps and provide immunity to certain individuals who were involved.
“I think that’s been the strategy in the mayor’s office right from the beginning,” maintains councillor David Miller.
Given what happened during council’s public session, it’s pretty hard to disagree.