‘Close friend’ of Mayor Susan Fennell got $1.1M in Brampton city contracts

TorontoStar.ca
May 27, 2014
By San Grewal

A man who has been living in a house belonging to Brampton Mayor Susan Fennell owns a company that has received $1.1 million in city contracts and millions of dollars to stage the mayor’s annual private fundraisers, according to documents obtained by the Star.
 
The City of Brampton documents show Malcolm Scott Ching’s company, Meri-Mac, a Brampton-based event planning and promotion firm, was hired by the city and the Brampton Downtown Development Corp., an arm’s-length agency of the city, for 453 contracts since 2001.

In statements to the Star, Ching said he was hired because of price and performance. He also said his company provides outstanding value and service and that the vast majority of city contract costs were to cover disbursements, the purchase of products and sales tax.

Meri-Mac received $1,124,882 for the city work, including $28,278 in work done for the mayor’s office. The majority of the jobs are for amounts between $100 and $10,000; the highest is for $41,000. According to Brampton’s current purchasing bylaws, jobs totalling more than $50,000 require a competitive tendering process with at least three sealed quotes.

One neighbour describes Ching as a “close personal friend” of Fennell. In one case, a $4,725 payment for city work given to Ching’s business was approved through the mayor’s office. Airfare to fly Ching to Florida was charged to Fennell’s city-issued credit card in 2007. And Ching has a close connection with the mayor’s private fundraising events. Since 2008, Meri-Mac has been paid between $350,000 and $550,000 annually to plan Fennell’s gala and golf tournament.

A Star investigation has found that for 2012 and 2013 combined, 25 per cent of the funds raised by the mayor’s gala and golf tournament go to the community groups they support. Sixty-three per cent is used to pay for the events and 12 per cent is unspent or used for administrative costs.
 
After six attempts over several weeks, Ching did not respond to questions about how much he was paid to stage the gala or golf tournament.

Ching did issue three written statements to the Star, explaining that his company’s relationship with Brampton “extends well before 2001 when Mayor Fennell was first elected.”
 
“We have worked with most departments in the city at one time or another over the years. Our reputation as a reliable supplier and problem solver has brought us many referrals throughout the city,” Ching said in one extensive email sent three weeks ago.

“We were hired because of price and performance. Since we provide outstanding value and service, we are called back.”

Ching also pointed out that since 2001 the annual value of his company’s city contracts is just a small part of his business and that the vast majority of the cost “covers the disbursements and/or product cost plus HST, whereby the actual fee to Meri-Mac Inc. is a much smaller component.”

Fennell and Ching did not respond to questions about any ties they may have with each other and whether or not Ching lives in a house owned by the mayor.

Both were asked if the mayor has ever helped Ching get work with the city. They did not respond.

According to neighbours, Ching lives in a small brown brick bungalow on a quiet crescent in Brampton. Property records show the house belongs to Fennell.

“He’s been living there for close to five years. I worked on Mayor Fennell's campaign last time. Scott was living down the street at that time. He would drive up the street and stop and talk,” said neighbour Steven Preston. “He's a close personal friend with the mayor.”

Five other neighbours said Ching lives there. A search of Brampton phone records shows there is a line registered to an S. Ching at the same address.

In one email obtained by the Star, Ching arranged to hold a meeting at the house.

The Nov. 1, 2009, email was sent to Fennell and two of her staff by Ching to organize a get together to discuss Mayor Susan Fennell’s Community Spirit Team, a private organization. In the email Ching asks everyone meet at “The boardroom at (the house) … We will order some pizza and get everyone on their way as early as possible.” On its website the spirit team is described as a “volunteer group who's (sic) sole purpose is to promote community participation in fun events within Brampton.”

In another 2009 email from Fennell to a Brampton business person, she identifies Ching as the “chair of my gala and golf classic … and exec director of my community spirit team.”
 
The gala and golf tournament are private events and are not affiliated with the city. In 2011, the gala was under pressure to be more transparent after it was revealed that since 2005 it had raised hundreds of thousands of dollars for community groups without issuing receipts or making its books public, despite repeated requests.

The Star examined one payment for $4,725, made to Meri-Mac, to see if the city was following its regular procedures. According to John Corbett, Brampton’s chief administrative officer, the city’s bylaws at the time required that any spending over $2,500 be processed by a city employee within the finance department. This payment was handled directly by the mayor’s office.
 
A monthly statement for the city-issued credit card belonging to one of Fennell’s staff shows that in May 2010 Meri-Mac was paid $4,725 to plan and staff the annual Board of Trade Mayor’s Luncheon. A single charge for the amount with a description of the cost appears on the credit card statement.
 
“Costs exceeding the threshold should have been routed to finance for a purchasing order; however, this charge was approved by the mayor’s chief of staff,” Corbett said.
 
Fennell’s chief of staff, Ian Newman, did not respond to questions about the charge. Fennell also did not respond.
 
In a statement issued five days later on April 30, Corbett again said a purchase order would have been required and added that the bylaws at the time would require an employee “to seek informal competitive quotes as the purchase was between $2,500-$5,000.”
 
Then in another statement issued May 8, Corbett said the amount was split into two invoices. That raises the possibility each fell below the $2,500 threshold. Corbett did not respond to a request from the Star to see the invoices or copies of the invoices.

Independent of the city, Fennell since 2005 has hosted the gala and golf tournament to raise funds for local arts and community groups.

Both private events raise money through ticket purchases and private sponsors. Between 2008 and 2013, the gala distributed, after expenses, between $170,000 and $267,000 annually to community groups.

The golf tournament has existed for more than a decade and since 2005, donors have directly given $100,000 annually to the Brampton Civic Hospital as part of a $1 million commitment made by Fennell.

Between 2008 and 2013, according to financial statements, Meri-Mac was paid between $350,000 and $550,000 a year to stage the annual gala and the golf tournament.

Fennell resigned as the gala board chair in 2010 when the board was under pressure to produce financial statements. In 2011, when gala organizers were releasing the gala’s audited statements for 2008 and 2009, Meri-Mac was indentified as the event’s planner. The gala was incorporated under a new name and Fennell said that “I have no role whatsoever in its decision-making.”
 
In an email dated Nov. 9, 2011, Fennell sent the following instructions to board chair Heather Picken ahead of a board meeting.

“The items important for the functions are: 1. Decision to retain event planner Meri-Mac for the 2012-2015 gala and golf … 2. Budget approval to Meri-Mac for 2012 gala and golf (350,000 gala) and I’m not sure what the golf needs are,” the email said.
 
When asked about the November 2011 email, Fennell responded that, “The answers to each question can be found either by consulting the statutory powers for a mayor in the municipal act, or by consulting the integrity commissioner’s report of October 20, 2011.” It’s unclear what Fennell means.
 
The city has initiated an audit of the mayor’s and councillors’ spending. The audit is set to be completed by July.