Sweeney v. Palacio, 2008 ONMIC 1

Citation: Sweeney v. Palacio, 2008 ONMIC 1
Date: 2008-01-09

COMPLAINT OF VIOLATION OF CODE OF CONDUCT BY COUNCILLOR PALACIO

Notice: Municipal Integrity Commissioners provide investigation reports to their respective municipal council and, in most cases, make recommendations for imposition of penalty or other remedial action to the municipal Council. Therefore, reference should be made to the minutes of each particular municipal council to obtain information about the particular council's consideration of each report. When possible, a link to the relevant municipal council minutes is provided.

Please find below the link to the corresponding council decision. http://app.toronto.ca/tmmis/viewAgendaItemHistory.do?item=2008.CC16.2

SUMMARY. 3

RECOMMENDATIONS.. 3

FINANCIAL IMPACT. 3

DECISION HISTORY. 4

ISSUE BACKGROUND.. 4

COMMENTS.. 4

Did the Councillor Violate the Code of Conduct?. 4

What Should Be Done About It?. 5

Preliminary Matters. 5

CONTACT. 6

SIGNATURE.. 6

ATTACHMENTS.. 6

APPENDIX.. 7

SUMMARY

John Sweeney complained that Councillor Palacio violated the Code of Conduct for Members of Council and Local Boards (Restricted Definition) (“Code of Conduct”) by accepting a benefit contrary to Article II (now Article IV) (“Gifts and Benefits”). More particularly, the complainant alleged that the Police Community Partnership – Division 12 (“PCP”) rented Councillor Palacio office space for a constituency office at below market value and this constituted an impermissible benefit. Relying on Clause (2)(a)(i) of Appendix 1 (“Descriptive Categories of Conduct Across Acts”) of the Code of Conduct, he also alleged that Councillor Palacio breached public trust in connection with the purchase and rental of the property in which his constituency office was located. Councillor Palacio denied the allegations and also sought to have the complaint dismissed on the basis that it was politically motivated.

Following an investigation, I concluded that Councillor Palacio had violated Article II of the Code of Conduct by receiving the benefit of a constituency office space at below market value rent. However, I also determined that the violation resulted from an “error of judgment made in good faith” in terms of section 5 (now section 8) of Part B (“Formal Complaint Procedure”) of the Council Code of Conduct Complaint Protocol (“Complaint Protocol”). As a consequence, I am reporting the violation to City Council with no recommendation for sanction.

In a preliminary ruling, I refused to entertain the complaint of abuse of public trust on the basis that this was a Criminal Code matter beyond my jurisdiction by virtue of section 2(3)(a) (now section 3(3)(a)) of the Complaint Protocol. While accepting that the complaint was at least in part politically motivated, I also concluded, in terms of section 3 (now section 4(1)) of the Complaint Protocol, that it was not frivolous, vexatious or made in bad faith.

RECOMMENDATIONS

The Integrity Commissioner recommends that:

City Council adopt the finding that Councillor Cesar Palacio has violated the Code of Conduct; and
City Council not impose any sanction on Councillor Palacio on the basis that the violation resulted from an error of judgment made in good faith.

FINANCIAL IMPACT

These recommendations have no financial implications.

DECISION HISTORY

This report results from a complaint under the Code of Conduct for Members of Council and Local Boards (Restricted Definition) (“Code of Conduct”) that Councillor Cesar Palacio violated the Code of Conduct. On the basis of an investigation, I made a decision (Appendix A) that Councillor Palacio had violated the Code of Conduct. As required by the Code of Conduct Complaint Protocol (“Complaint Protocol”) and section 162(3) of the City of Toronto Act, 2006, I am obliged to report to City Council publicly on any finding of violation of the Code of Conduct.

ISSUE BACKGROUND

Following the 2003 municipal elections, Councillor Cesar Palacio converted his campaign office into his constituency office. The owner of the property charged Councillor Palacio $400 a month for the premises (utilities included). The owner was a numbered company that held the property on trust for the Police Community Partnership – Division 12 (“PCP”). Councillor Palacio was a director of the numbered company and a guarantor of the mortgage that was registered against the property.

John Sweeney, a member of the PCP made a formal complaint that Councillor Palacio violated the Code of Conduct by accepting a benefit contrary to Article II (now Article IV) (“Gifts and Benefits”). More particularly, the complainant alleged that the PCP rented Councillor Palacio office space for a constituency office at below market value and this constituted an impermissible benefit. Relying on Clause (2)(a)(i) of Appendix 1 (“Descriptive Categories of Conduct Across Acts”) of the Code of Conduct, he also alleged that Councillor Palacio breached public trust in connection with the purchase and rental of the property in which his constituency office was located. Councillor Palacio denied the allegations and also sought to have the complaint dismissed on the basis that it was politically motivated.

COMMENTS

Did the Councillor Violate the Code of Conduct?

Councillor Palacio violated the Code of Conduct. The rent of $400 (utilities included) for the constituency office at 1697 St. Clair Avenue West was clearly below market value rent for that property. Indeed, neither the Councillor nor the PCP had market value rent in mind when they entered into the arrangement for the rental of this storefront. Councillor Palacio based his willingness to pay $400 on the amount that Members of Council were paying for constituency offices in Civic Centres and the PCP was simply hoping to cover some of its outgoings on the property.

City Council’s 2001 Constituency Offices Leases Policy makes it clear that it is not appropriate for Members of Council to “accept office space at a rate that is below market value”. That policy recognizes that this is a pecuniary benefit in terms of the gifts and benefits provision in the Code of Conduct. The subsidized rent frees up the Member’s Office Expense Account for other uses.

What Should Be Done About It?

Councillor Palacio did not exploit the subsidized rent to his financial advantage. During two of the three years of the lease on the premises, he could have afforded to have paid market value rent for the premises out of his Office Expense Account. He genuinely believed that he was doing the right thing by ascertaining the cost of Civic Centre constituency space and basing the rent he paid for 1697 St. Clair Avenue West on that figure. He also had an understanding with the PCP that he would either vacate the premises or share them with the PCP should the PCP need them.

In those circumstances, I determined that the violation arose out of an error of judgment made in good faith in terms of section 5 (now section 8) of the Complaint Protocol. As a consequence, I am reporting the violation to City Council without any recommendation for sanction.

Preliminary Matters

I did not conduct any investigation into the assertion that the Councillor’s conduct amounted to an abuse of public trust. The Complaint Protocol (section 2(3)(a), now section 3(3)(a)) specifies that if the subject matter of the complaint is dealt with in other legislation with its own mechanisms, I have no jurisdiction. Not only is abuse of public trust not dealt with in the body of the Code of Conduct, it is also an offence under the Criminal Code.

John Sweeney, the complainant was a campaign worker and financial supporter of one of Councillor Palacio’s opponents in the 2006 Municipal Elections. He brought this complaint in the course of the election campaign having raised his concerns first at a meeting of the PCP and, subsequently, at an all candidates’ meeting in Councillor Palacio’s ward.

There is no doubt that this complaint was politically motivated. However, that in itself does not make the complaint frivolous, vexatious or made in bad faith in terms of section 3 (now section 4) of the Complaint Protocol. Political opponents are not disqualified from making complaints of violation of the Code of Conduct even during a municipal election. In this instance, the complainant’s affidavit and the material filed in support of the complaint convinced me that this was a genuine complaint on a serious issue.

My reasons for ruling as I have are developed in greater detail in the decision that I communicated to the parties, attached to this report as Appendix A.

CONTACT

David Mullan, Integrity Commissioner

Phone: 416-397-7770; Fax: 416-392-3840

Email: dmullan@toronto.ca

SIGNATURE

David Mullan, Integrity Commissioner

ATTACHMENTS

Appendix A: Integrity Commissioner Decision on Complaint against Councillor Cesar Palacio