Brampton (Mayor) (Re), 2014 ONMIC 8

CITY OF BRAMPTON INTEGRITY COMMISSIONER, ROBERT J. SWAYZE

Citation: Brampton (Mayor) (Re), 2014 ONMIC 8 Date: September 5, 2014

FORENSIC AUDIT OF MAYOR AND MEMBERS OF COUNCIL EXPENSES

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://www.brampton.ca/EN/City-Hall/meetings-agendas/City%20Council%202010/20141112spccmn.pdf

TABLE OF CONTENTS

OVERVIEW... 3

RECOMMENDATIONS.. 3

BACKGROUND.. 3

CURRENT SITUATION.. 4

CORPORATE IMPLICATIONS.. 6

The Mayor 6

Members of Council 7

CONCLUSION.. 9

APPENDICES.. 9

Appendix “A” 10

OVERVIEW

• Council appointed Robert Swayze as Integrity Commissioner on July 16, 2014 and directed him to report to Council on the Forensic Audit of expenses of members of Council, conducted by Deloitte in relation to the Council Code of Conduct.

• After reviewing the Council Code of Conduct and other policies relating to the ethical behaviour of members of Council, this report recommends that the Integrity Commissioner report to the new Council in 2015 with recommendations for changes to the documents to include specific rules for members to follow.

• The Integrity Commissioner reports his findings based upon the information and conclusions contained in the Forensic Audit:

1. That the Mayor has violated the Council Code of Conduct by approving the purchase of Latitude flight passes for her travel and that of staff, which are freely upgradeable to business class contrary to policy..

2. That members of Council who have expensed the cost of Rose Theatre and Powerade tickets used for family or an unrecorded use, have contravened the Council Code of Conduct and all such costs should be reimbursed.

3. Councillors Callahan and Hutton have approved other City expenditures which are unrelated to City business and contrary to the Code of Conduct. They also should be reimbursed.

RECOMMENDATIONS

1. That the report from Robert Swayze, Integrity Commissioner, dated September 5, 2014, to the City Council Meeting of September 10, 2014 re: Forensic Audit of Mayor and Members of Council Expenses, be received, and
2. That the Integrity Commissioner report to Council as soon as possible after January 1, 2015, to recommend changes to the Council Code of Conduct, the Complaint Protocol and all other policies, by-laws or other documents in any way relating to the ethical behaviour of members of Council, such report to contain a draft Code and Complaint Protocol based on other codes and best practices in the Province of Ontario with options for Council to decide on specific rules and a recommendation for Council to appoint a committee of Council to work with the Integrity Commissioner to finalize all such documents.

BACKGROUND

I was appointed Integrity Commissioner for the City pursuant to By-law 200-2014 passed by Council on July 16, 2014. At the same meeting, Council directed me to report on the activities discussed in the Forensic Audit issued by Deloitte (the “Audit” and “Auditor”) as they relate to the Code of Conduct for Members of Council. (the “Code”) I am pleased and honoured to serve the City of Brampton as its Integrity Commissioner.

For the purpose of this report I have reviewed the Audit, the Code, the Complaint Protocol, all reports from the former Office of the Integrity Commissioner and other Corporate Policies relating to the ethical behaviour of members of Council. I have asked questions of and received answers from, the Mayor and some members of Council, as well as meeting personally with the Mayor. I have also reviewed the record of Council related to this report and watched relevant Council meetings online. I am indebted to Brampton staff and Deloitte for devoting so much of their time to my enquiries.

CURRENT SITUATION

The current Code was approved by Council on February 9, 2011. It contained the following statement: “This Code of Conduct is a value based reference intended to encourage the highest standards of ethical behaviour to uphold the public trust, the integrity of governance and the City’s reputation.” In my opinion, the Code should be reviewed by the upcoming new Council with a report from me including recommendations to remove this statement and consider specific rules similar to most of the Council Codes of Conduct in Ontario. My reasons for this recommendation are as follows:

1. The Code should not be denoted as a “reference” for members of Council. It is a code authorized by law which is binding on all members. A binding code with the force of law, needs to be a set of rules of behaviour clearly drafted to provide certainty for members who are constantly exposed to public scrutiny, and
2. Serving the public as a member of Council can give rise to complicated issues and relationships, creating dilemmas for which there are often no easy answers. Specific clear rules are helpful and where confusion exists, there should be encouragement to contact the Integrity Commissioner for advice which is binding on him.

The Complaint Protocol should also be reviewed by the new Council. In my opinion, the intake procedures are too complex, the initial view letter is not needed and multiple staff members with authority in the Office of the Integrity Commissioner, are redundant. As the Integrity Commissioner currently for 9 other municipalities, my intake procedures for all complaints are to read them and decide whether they are valid on their face, before I conduct an investigation. If they are unsubstantiated or contrary to law, I dismiss them immediately without a report and without notice to the Councillor complained about. I have received numerous complaints as Integrity Commissioner in other municipalities, from confused citizens which are completely baseless and should not be dignified by publication in any way.

I recommend also that I review and report to the new Council on all Corporate Policies in any way relating to the ethical behaviour of members of Council. The Mayor and Council Expense Policy was approved at the same time as the Code with the common theme of “values based” rather than an emphasis on including clear rules. I am advised that the finance department was directed to cease its involvement in reviewing Council expenses at that time because all decisions would be made by the members of Council in their discretion. I am pleased to discover that this policy was recently revised on the recommendation of the current City Manager and the finance department is back involved. I may still wish to recommend changes to the current policy to include more detail for the purpose of avoiding confusion by members of Council which I identify later in this report.

I have not done an exhaustive review of all such policies but have come across the Workplace Harassment Policy and several others, which are applicable to all members of Council and administered by the Human Resources department. In my opinion, members of Council can be subject to the same provisions as now contained in those policies but administration of the policy and investigations by the HR Department, when members of Council are involved, should be replaced by the Integrity Commissioner.

One of the recommendations of the Auditor provides as follows:

“g) Referral of the information in Schedule 15 (and Section 12.2.6) by City Council to the Integrity Commissioner to consider whether the commitment of City resources in the circumstances described in Section 7 would have required the Member of Council connected to the event to pursue such action through recommendation of Committee and decision of Council.”

Schedule 15 is a list of City resources committed by various Councillors to community events including Recreation Department and Rose Theatre equipment and labour without payment by the sponsor of the event. These costs for each event range from hundreds to thousands of dollars. Section 12.2.6 was the Mayor’s indirect involvement in the Alliance Against Violence Youth Concert and the City supplying similar resources to the event each year which in 2012 was estimated at a cost of $22,610.00.

In my opinion, most of these donations in kind should have been specifically approved by Council. No single member of Council should assume the executive authority to direct the commitment of resources of such value. If a policy is adopted to grant such authority to a member of Council, it should have a monetary limit and recognize the importance of dealing with all community groups equally.

CORPORATE IMPLICATIONS

The Mayor

The Mayor has assembled a large and costly apparatus totally dedicated to her travel schedule and that of her staff. She indicated to me that every expenditure in this category has been shown in line items in her budget every year and approved by Council. She admits that it has been in place for ten years.

For her travel schedule in the GTA, her office is comprised of a full time Appointments Coordinator who can be backed up by an Executive Assistant and a Secretary, both also full time employees in her office. The Mayor’s office has a full time staff of 5. She is provided with a car at the cost of the City and a 24/7 stand-by limousine service which the Auditor has identified as costing $47,000 to $49,000 per year. She argues that the limousine service is necessary and provides security for her at the many events she attends, by the driver entering the venue and leaving with her. She advised me that the service has been in place for the full ten years and has always been included in her approved budget.

For her many flights around the world on City business, she has purchased 8 latitude flight passes from Air Canada as well as booking other flights in business class contrary to City policy as identified by the Auditor. The purchase of the Latitude passes since 2008 and their cost are detailed in a spreadsheet provided by the Auditor and attached to this report as Appendix “A”. She argues that it is frequently necessary for her to change her flights because of her frenetic schedule and these passes cost less for changes and cancellations than if she had purchased a ticket. Seven of the Latitude passes included 30 one way credits within North America and the one purchased in 2013 cost $28,260.00 or $942.00 per one way flight.

The Auditor has found and my research on Air Canada flight passes confirms, that purchasing an economy ticket is always at a lower cost and if flexibility is needed, lower priced passes are available. I believe that this level of pass was purchased by the Mayor or her staff with her approval, solely because they are freely upgradeable to business class.

I requested from the Mayor the class flown for all users but I was not provided with that information. She confirmed to me in our meeting, that she sat in business class seats while flying on the passes, but didn’t indicate how many times she upgraded. I can only assume that if an upgrade to business class was available, it was taken for all flights.

She advised me that “I specifically sought approval and was clearly told that the latitude fare complied with policy.” No documentation confirming such approval was provided. She also advised me that all Latitude passes were a staff purchase and “the full financial arrangement was organized and established by the then City Manager and finance staff”. She admitted to me that she uses “Sun Passes” for personal flights to Florida because of the flexibility they provide. These passes are considerably less costly than Latitude passes and they offer only economy class.

The Mayor’s Office staff, the former City Manager and her staff, have used Latitude passes expensed in the Mayor’s office, as identified by the Auditor. As an example, in May of 2013 the Mayor invited three of her office staff and a staff member of the City Manager to attend the Federation of Canadian Municipalities (“FCM”) conference in Vancouver, making a total of 5 persons, all flying on Latitude passes. The Mayor responded on this to me, that she needed the staff as support for her campaign for the position of third Vice-President of FCM. The policy of the City applicable to all staff prohibits travel in business class but the Mayor has, in effect, improperly exempted them from a staff policy if any of them flew business class.

I find that the Mayor has violated the Code by knowingly over-spending on her business travel on multiple occasions with the intention to upgrade to business class contrary to City policy. The purchase of latitude passes which are notionally economy class, also lacks transparency. The cost to the City of this breach of the Code, since 2008, has been substantial, as recorded in Appendix “A”. She is bound by Section 3.2 of the Code which requires her to uphold the City’s policies in the use of her City office budget which she has failed in this respect.

The upgrading of hotel rooms as identified by the Auditor, is also contrary to policy. She claims that she needed the meeting space at the conference. I do not have enough information as to whether the extra cost was justified to find that the Code was violated in this respect.

Members of Council

I agree with the conclusions of the Auditor, within the strictures of a forensic audit, that many identified expenditures of public funds by Councillors were contrary to established policy of the City. The Code in Section 3.2 contains the following statement:

“Members agree to respect and uphold the city of Brampton’s policies that guide Members use of their respective City office budgets and resources”

My direction is to advise Council whether any of the spending is contrary to the Code. Section 3.2 incorporates the spending policies in the Code and strictly speaking, all

infractions identified by the Auditor are contrary to that section. However, unlike the Auditor, for my assessment whether any expenditure is or is not contrary to the Code, I am able to look at explanations, possible confusion, honest mistakes, inadvertence and occasions when the expenditure was reimbursed.

The following are my conclusions generally on some of the categories of violation by members of Council identified by the Auditor:

1. Use of the corporate credit card for personal expenditures is contrary to the credit card agreement as the Auditor points out and this prohibition should be included in a clear policy adopted by Council. It is contrary to the Code and all personal expenditures should be reimbursed.
2. Expensing a ticket by a member of Council for his or her spouse for community functions not approved for payment, is contrary to policy but in my view most arose out of confusion. Many members go to the same function and see other members with spouses which reinforces that it is in accordance with policy. I will recommend to the new Council that all events for which a spouse may be invited, be clarified and accurate records be kept.
3. I differentiate expensing tickets to attend the Rose theatre and the Powerade Centre by spouses or other family for a performance or a hockey game, from attending a community event. It may be supporting a City facility but it is not a community obligation for a member of Council to attend. It is clearly against the City policy unless tickets are used by the member or donated to community groups. Some members of Council have purchased season’s tickets and subscriptions without keeping accurate records of the use of the tickets. Any such expenditures, are contrary to the Code and should be reimbursed by the member of Council.
4. Giving out souvenirs to constituents is minor and is not regarded by me as contrary to the Code. Records should be kept by staff and better record keeping in this respect and others, will be included in my recommendations to the new Council.

There are other expenses of Councillors not included within the above categories, but identified by the Auditor as contrary to policy. I understand that the Auditor has been directed to prepare a spreadsheet of expenditures contrary to policy for reimbursement by members of Council. I will be available by telephone at any time after the publication of this report to discuss with any Councillor which expenses shown on that spreadsheet, in my opinion, should be reimbursed. Any advice given by me on the telephone is always confidentially confirmed in writing to each Councillor and it is binding on me.

The following are my specific findings that the Code was contravened by Councillors:

1. Councillor Callahan has expensed Law Society fees, Law Pro insurance costs and Peel Law Association fees to the City without justification. He has advised me that he was told by the former Integrity Commissioner and staff of the City that this was not prohibited. He also argued that he occasionally did pro bono legal work for constituents. I do not accept that answer and find that these expenditures are contrary to the Code and should be reimbursed.

2. Councillor Hutton, in addition to expensing many tickets and subscriptions for the Rose Theatre for his spouse, he also has expensed subscriptions to 4 magazines over three years which are unrelated to City business. These expenditures are contrary to the Code and should be reimbursed.

CONCLUSION

It is hoped that this report is the last referral to the Integrity Commissioner before the upcoming election. It will be my intent in the new year, to work towards the adoption of a Code and other policies by the new Council, which encourages team playing by all members and avoidance of the political turmoil experienced during this term of Council. In 2015, it is my opinion that the Corporation of the City of Brampton needs to ”turn the page”.

Robert Swayze

Integrity Commissioner

APPENDICES

Appendix “A”: List of flight passes purchased by the Mayor’s Office

since 2008.

Report authored by: Robert Swayze, Integrity Commissioner

Appendix “A”