Giorgio Mammoliti listens to arguments at the meeting of compliance audit committee, February 4, 2013.
The city's compliance audit committee has decided to take legal action against Councillor Giorgio Mammoliti for allegedly breaking election spending laws during his 2010 campaign.
The three-person committee made the decision at a meeting Monday after considering an audit, released last month, that found Mammoliti exceeded the $27,464 campaign spending limit by $12,065, or 44 per cent.
In doing so they rejected a request from Mammoliti's lawyer Jack Siegel, who had asked for an eight-month adjournment in order to seek an outside review of the audit. Siegel told the committee Monday that "there is no suggestion of subterfuge" and any errors in his client's campaign filings were honest mistakes.
"It's Mr. Mammoliti's position, and has been throughout, that he's done everything possible to comply with the requirements of a very complicated piece of legislation," Siegel told reporters after the meeting.
But in presenting his report to the committee, auditor Bruce Armstrong painted a picture of an extraordinarily sloppy campaign whose financial filings were riddled with errors. Armstrong said that a normally straightforward record-keeping process was complicated by Mammoliti's decision in the summer of 2010 to abort a run for mayor and seek a councillor's seat instead. A lack of in-house accounting expertise also did the councillor no favours.
According to Armstrong, bills for Mammoliti's councillor bid were sometimes paid out of the bank account designated for his mayoral run, not all of his expenses were reported, and a concerted attempt to organize the campaign records wasn't made until Mammoliti called in an expert shortly before the filing deadline, causing a "mad rush" to reconcile the books.
"Until the deadline period for filing financial statements, I maintain the campaign had no idea what the true revenues or expenses of the campaigns were," Armstrong told the committee.
Attorney Paul-Erik Veel, who is representing David DePoe, the applicant in the audit request, told the committee that it was irrelevant whether Mammoliti's overspending was inadvertent.
"In my submission, quite frankly it doesn't matter whether that happened through some type of intentional conduct, it doesn't matter whether that happened through negligence of accounting standards," said Veel.
"If it results in expenses exceeding the [limit] by 44 percent, that gives the perception of an unfair campaign and calls for the commencement of legal proceedings."
Mammoliti, a mecurial council member who last month claimed he was the victim of a conspiracy that involved his phones being tapped, did not speak to media after the decision, referring all questions to his attorneys instead.
A prosecutor will now be called in to review the case against the councillor, and decide whether or not to pursue non-criminal charges. If a judge finds him guilty of breaking the Municipal Elections Act, Mammoliti would face a fine of up to $25,000, although removal from office and jail time are also possible, if unlikely, penalties.
After the meeting DePoe said he was "pleased" with the committee's decision, and rejected Mammoliti's defence that any errors were made in good faith.
"He's run for office five times. He ought to know how to make sure that his campaign spending is compliant with the Municipal Elections Act," DePoe said.
How DePoe was prompted to launch the audit request remains somewhat of a mystery, however. He claims that he received an anonymous phone call from someone identifying himself as a lawyer and "an opponent of Mammoliti" tipping him off that there was something wrong with the councillor's books.
Adding to the intrigue is that Veel, who is working pro bono for DePoe in the Mammoliti case, has ties to Adam Chaleff-Freudenthaler and Max Reed, the pair who successfully pursued an audit of Mayor Rob Ford's 2010 campaign spending.
Veel went to McGill with Reed and is representing Chaleff-Freudenthaler in an audit request against failed council candidate and Ford ally Peter Li Preti. Until last November, Mammoliti was Ford's vocal council lieutenant but has since cut ties with the mayor.
DePoe said he had never met Chaleff-Freudenthaler until after he launched the audit against Mammoliti, but conceded that Chaleff-Freudenthaler has since advised him on how to proceed.
"But I did the main digging," DePoe insisted.
The audit of Ford's campaign was released last week and concluded he exceeded spending limits by $40,000, or three per cent. The compliance audit committee will decide on February 25 whether to take legal action against him.