Embattled councillor Giorgio Mammoliti has responded to media reports that he received $275,000 in loans from developers he helped out at City Hall.
On Thursday, CBC reported that the York West councillor took out two loans from real estate investors whose plans for lucrative billboards he helped push through Etobicoke York Community Council.
On separate occassions in 2004 and 2006 Mammoliti successfully advocated giving developer Mac Champsee permission to erect billboards on property near Highway 401. In 2007, Champsee issued a $200,000 loan to companies owned by the councillor and his wife.
Ralph Nardi, a realtor who took over one of Champsee's properties, applied for billboard permissions in 2009. Mammoliti also supported those applications. Sometime before mid-2011, Nardi's company gave Mammoliti a $75,000 loan.
Billboards can be big-money makers for property owners, and can net hundreds of thousands in advertising dollars every year.
In a written statement released Friday, Mammoliti said there was nothing improper with the loans and asserted they were not connected to his support of the billboard approvals.
"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 statement said.
Mammoliti also asked journalists to stop following the story, arguing that it wasn't relevant to his duties as an elected official.
"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."
According to the statement, repayment of the larger of the two loans was negotiated as part of his divorce, "which is still ongoing." Mammoliti said "to the best of my knowledge" that loan, which reportedly had an interest rate of 12 per cent, had been paid back in full.
But some of Mammoliti's colleagues are raising questions about the propriety of the deals. Adam Vaughan hopes that they will be investigated by the integrity commissioner as a possible violation of council's code of conduct, which stipulates that councillors can't receive benefits in exchange for exerting their influence on council.
"It's wrong. You just don't mix the public work you do as a councillor with private business," Councillor Vaughan told reporters Friday. "When there's an approval in place and then there's money exchanging hands afterwards... it just doesn't look right."
Vaughan called for Mammoliti to "make a full disclosure of his financial dealings with people who have had applications in front of the city."
Councillor Gloria Lindsay Luby, who voted against the billboard proposals at community council, agreed that the loans looked improper.
"The perception is very bad," she said. "I don't know what the circumstances are, but it's something I would never do. I just don't think it's right."
But some municipal law experts say that in the absence of direct evidence that Mammoliti secured the loans in exchange for backing the developers' billboard plans years earlier, it's not clear he did anything wrong.
"He said it's personal, and I have to say, I think he's right," says John Mascarin, a lawyer with Aird Berlis LLP. "The optics look bad. But I'm not really certain that he's done anything improper. It may have been maybe a little foolish to have done something like this, thinking no one would ever figure it out. But I don't think he's done anything that's technically illegal."
According to Mascarin, if the loans were given without interest or their payment forgiven, that could constitute an improper gift and a violation of the council code. But he says he's seen no indication the terms of the loans weren't above board.
Mammoliti was at City Hall Friday morning to attend a meeting of the Toronto Zoo board. He did not answer questions put to him by reporters.