Councillors shock at Karygiannis’ removal from office due to campaign spending violations reflects how well candidates have avoided accountability

Thestar.com
November 22, 2019
Royson James

Like birds flocking to a feeding tree, city hall reporters have known for decades that a visit to the clerk’s office after a municipal election will yield a bounty of deliciously incredible stories about the campaign spending habits of municipal politicians.

From Toronto to Tiny and Tay, infuriating infractions prevailed, some ingenious, others iniquitous and in-your-face, as if inherited and ingrained.

Slowly, the embarrassing barrage of reports on the excesses led to election campaign reforms in Ontario. Leading the way was Toronto, for good reason. The bird-dog journalists were most plentiful here. And there was a lot to digest.

But places such as Vaughan (the cheeky city above Toronto), Hamilton, and (insert your city or town here) ran in lock step. To wit, the provincial governments made a series of changes that toughened campaign spending laws.

The fact that Toronto city councillors expressed shock Nov. 6 when one of their own, Jim Karygiannis, was removed from his Ward 22 seat for campaign spending violations, is not a testament to how straight-arrow the politicians have been.

It reflects how skillfully the candidates and their accountants have avoided censure and accountability.

Even when they contravene the rules, their fellows are prone to forgive their indiscretions. See Giorgio Mammoliti of Toronto and Tom Jackson of Hamilton. And let’s not even mention Vaughan, where so many councillors faced pressure from citizens (about their spending) that reporters almost took up residence there during the mayoralty of Michael DiBiase and Linda Jackson.

So, yes, it’s astonishing that Karygiannis, the king of Agincourt, a Liberal MP for 26 years and city councillor since 2014, was removed from office for violating campaign spending rules

This kind of thing just doesn’t happen … although evidence abounds that this kind of indiscretion does.

Reporters pointed out and columnists opined, but it took the judicial inquiry into Toronto’s computer leasing scandal to spell it out.

Madam Justice Denise Bellamy said in 2005:

“At the time, Jeff Lyons had been enjoying a long reign as the pre-eminent municipal lobbyist in Toronto. Not coincidentally, he also enjoyed a reputation as an important fundraiser for municipal election campaigns, demonstrating over the years that he could bring in the money. Year after year, he would deliver letters to candidates of strategic interest, usually in person. Enclosed with the letters were bundles of cheques that he had solicited from donors.

“By attaching the funds he had raised to his own letters, and hand-delivering them, Jeff Lyons made the real message clear: ‘I got you this money. And I can take it away, too.’ ”

Before long, the disproportionate influence of the development industry on the electability of city councillors was a common theme. But loopholes sprung from each government reform.

When Queen’s Park limited donations to $750 per business entity, those businesses gave multiple maximum donations in the names of their various directors. When that loophole was closed, they tapped subsidiaries to funnel the money to favourite candidates.

When election spending was capped, according to the number of electors in a ward, the politicians still received more donations than they could spend. Then they staged huge and lavish parties, presented as fundraisers or celebration events or victory parties. Never mind that no funds were raised. The surplus had to be turned over to the city clerk, but it stayed as a war chest for the councillor’s next campaign.

Toronto, which gives tax credits for campaign donations, started keeping the surplus to help subsidize the city’s tax credit scheme. Naturally, politicians punctured the fund with lavish post-election parties and gifts to campaign workers and consultants that reduced the “surplus.”

So the province put a strict spending limit on “parties and other expressions of appreciation.”

Violate that limit and you are removed from office, the new Municipal Elections Act said in 2016.

We are not forensic auditors. But even dumb reporters raise an eyebrow over the following:

David Nickle, veteran reporter for the Scarborough Mirror and Toronto.com reported how Jimmy K raised $217,000 for the 2018 election campaign in Ward 22 Scarborough-Agincourt, his old stomping ground. He beat rival Norm Kelly. Why such a large sum for a ward with a spending limit of $61,207?

Karygiannis filed statements said he spent S81,000 on honoraria to 21 individuals for work done after the elections.

That’s $20,000 more than he was allowed to spend on the election, itself.

Incredibly, expenses for wrapping up an election were higher than the cost of the heated contest.

Citizen watchdog Adam Chaleff found it “highly abnormal” and complained to the city, which ordered an audit. Chaleff also questioned how $27,000 was spent on fundraising but no equivalent revenue from said fundraising event was filed.

Faced with the audit, Karygiannis amended his expense files with the city, claiming the $27,000 was for a post-election appreciation event, not the fundraiser as originally stated.

Oops!

Whether he knew it or not, such post-election events for his ward can’t incur more than $6,100 in expenses.

And the penalty for exceeding that limit is automatic removal from office.

The city clerk removed him from office.

Karygiannis now says, that last change was a mistake.

The $27,000 is actually for the fundraiser as originally stated.

Now, history shows that if he had to argue that before his colleagues, they would likely wink at the mistake.

Never mind that $20,000 of that $27,000 went to consulting fees, including $11,000 to well-known heavyweight pollster and campaigner manager Nik Kouvalis.

The removal is a blunt instrument, acknowledges the provincial minister who shepherded it into law. Tough new rules were needed because people running for municipal councils who had big campaign surpluses “were buying Rolex watches and other gifts for some of their campaign workers, and lavish parties for their faithful followers.

“With that kind of abuse so apparent, the government of the day felt it incumbent on them to bring sensible rules,” Ted McMeekin told The Star’s David Rider.

Finally someone took this seriously.

Yesterday a judge heard pleas from Karygiannis’ lawyer to reinstate him, pending a review from the city’s audit regime.

That is not what the provincial legislature intended when it passed this law, provoked by decades of incredible campaign financing.