Friday 7 October 2011

Mayor Hazel McCallian: Did she do wrong?

Mississauga is a city in Southern Ontario located in the Regional Municipality of Peel, and in the western part of the Greater Toronto Area. With an estimated population of three-quarters of a million residents, it is Canada's sixth-most populous municipality.

The city’s mayor is Hazel McCallian. She was born on February 14, 1921 and at the time of this writing; she is 90 years of age. She has been Mississauga's mayor for 32 years, holding office since 1978. She is one of Canada's best known and longest-serving mayors and she is one of the longest serving elected leaders in history. She was easily re-elected in October 2010 for her 12th consecutive term, holding a 76% majority of the votes, and has often been re-elected without even needing to conduct an actual campaign.

For the most part, she has avoided scandals with respect to her position as the city’s mayor.

But then there was the case of Hazel McCallion’s November gala that has been going on all the way back to 1987. It was later revealed that for every dollar of the ticket price, only twenty cents actually went to charity. And of those twenty cents, only six or seven cents actually went to the arts even though the gala was for the arts.

Councillor Nando Iannicca said at a Mississauga Council meeting on March 9, 2011, “I’m sure a lot of taxpayers feel cheated because if my math is correct, only from the accounts, some of the entities who wholeheartedly and graciously gave money would have got bigger business receipts and charity receipts than the charities got in actual money.”

He later said at that meeting while addressing the mayor, “I wonder what rapprochement’s been done with the charities when they now know, and I didn’t know, —I don’t think a lot of people knew, that you had this grand fete with the City’s elites. And at the end of the day for every dollar that came in, eighty cents was consumed.”

Nearly two years ago, Mississauga city council ordered a judicial inquiry into Mayor Hazel McCallion's role in a deal to build a hotel and convention centre near city hall. Ms. McCallion's son, Peter McCallion, was behind the project and stood to make millions off it. Ms. McCallion helped promote the deal, hosting meetings of her son's business partners at her house and hectoring the owners of the land at its centre to sell to her son's company. The question on everyone’s mind was; was the mayor engaged in a clear conflict of interest when she advocated for her son’s hotel development in Mississauga?

The land deal at the heart of the $7-million inquiry involved Peter McCallion and his shell company, World Class Developments, which wanted to build an upscale hotel and condominium complex in central Mississauga, just across the street from City Hall.

The mayor became a significant backroom advocate for the project during negotiations between land vendor OMERS (Ontario Municipal Employees Retirement System) and World Class, pushing the vendor for concessions even as the deal faced imminent collapse amid the 2008 credit crunch. OMERS co-owned the proposed hotel lands along with the Alberta Investment Management Corporation, though the city has since purchased the site for a Sheridan College campus.

In a municipal election held in the midst of the inquiry's hearings last year, Ms. McCallion campaigned to have the councillors who supported the probe voted out. She succeeded in part, with her most vociferous opponent, Carolyn Parrish being defeated. Parrish was running in my ward so I had no problem voting for her opponent since Parrish in my opinion is a failure as a politician. Nevertheless, campaigning against those who were seeking answers to what they believed was a wrongdoing by the mayor is rather sleazy in my view.

The inquiry probing the possible violation of conflict of interest rules by McCallion has found that she had a “real and apparent conflict of interest.”

The City of Mississauga judicial inquiry report by Justice Douglas Cunningham ruled that McCallion was inappropriately involved in a failed $14.4-million land deal between the city and World Class Developments, a development company partly owned by her son, Peter McCallion.

The report stated that people “fortunate enough to enjoy friendships with the mayor have reaped benefits from those ties, and that the popular mayor’s actions raise “significant concerns.” He added that she wields a lot of power and had abused that power.

Cunningham, who wrote the report, said he made his findings with a “measure of regret” because of McCallion’s “unique history of public service” to Mississauga. In fact, he said he was hopeful his recommendations would “enjoy her personal support.” It would appear that she didn’t support his findings with respect to her conflict of interest. The Mayor’s legal team contends that Ms. McCallion did not violate the conflict act through her efforts to salvage the hotel project, since she took the necessary steps in declaring a conflict in council.

However, is that not like telling your school teacher that you are going to cheat on your exam and then after cheating on your exam, you claim you did no wrong because you told your teacher before the exam was given to you that you would cheat on your exam?

Addressing reporters later in the day, Ms. McCallion refused to acknowledge she had done anything wrong, calling the commissioner’s findings “his opinion.” She maintained she was acting in the city’s best interests throughout. She said, “I complied with the Conflict of Interest Act.

Those were the regulations that were in force at the time.” During her testimony in September 2010, Ms. McCallion maintained she was acting in the city’s best interests, but acknowledged that there was an appearance of conflict in the matter. The commissioner’s findings repudiated Ms. McCallion’s statement during the inquiry that her actions in respect to the land deal were for “the good of the city.”

While the long-desired upscale hotel may have been the mayor’s primary driver, the commissioner acknowledged, she “knowingly used her public office and her relationship with OMERS to influence the co-owners to agree to concessions that benefited WCD. The commissioner said, “She knew that her son Peter McCallion stood to gain financially if the deal succeeded. For this reason, the exercise of influence put her in a position of conflict, both apparent and real.” In fact, if the deal had gone through, it would have made her son a very rich man to the tune of at least $10 million dollars.

The mayor said that she saw no reason to be repentant. She barely acknowledged her role in the debacle. She admitted no wrong-doing, no inappropriate behaviour, and if Justice J. Douglas Cunningham found her actions and attitude “troubling,” well, that’s his opinion according to her.

Reporters tried valiantly — and failed, predictably — to get Hazel “Queen of Mississauga” McCallion to apologize to her subjects for sullying the good name of the city she’s built. When the word “apologize” did leak from the mayor’s mouth, placed there from a reporter’s question, it dripped with sarcasm when she said, “I’d be happy to apologize to the citizens of Mississauga if they felt I contravened the Municipal Conflict of Interest Act, but the (judge) has confirmed that I did not.”

She was splitting hairs, of course, as her council allies have been doing since the report was published. You’d think the judge absolved her of guilt. In fact, Justice Cunningham said, “Given Peter McCallion’s pecuniary interest in the transaction, it was improper for the mayor to repeatedly use her office on behalf of his company. This finding is supported both by the common law and common sense.”

Asked if she would issue an apology to citizens whose faith in her leadership may have been shaken, Ms. McCallion replied, “I’d be happy to apologize to the citizens of Mississauga if they are of the opinion that I contravened the Conflict of Interest Act,” something she repeatedly emphasized she did not do. Pressed on the issue, Ms. McCallion would neither acknowledge nor apologize for her broader misconduct, as described in the report.

Justice Cunningham wrote in his findings, “It is no answer for the mayor to say that her actions were done for the benefit of the City of Mississauga, when her son stood to make millions of dollars if the deal was concluded."

Once the mayor learned of her son’s pecuniary interest; which she knew from the outset, she should have refrained from all further involvement in the transaction.”

Hazel McCallion attended at least two private meetings last year involving her son's company and a $14.4 million land deal, while zoning for a hotel he hoped to build near city hall was under active consideration by council.

Justice Cunningham concluded that Ms. McCallion had failed to fully disclose her own family connection to the venture to council and the public, as required under Ontario law. The judge acknowledged that McCallion has a lifetime of exemplary public service but he concluded that she crossed the conflict of interest line when she promoted the project that benefited her son.

The report found that reforms are necessary at the provincial level and recommends changes to Mississauga’s Code of Conduct, the Conflict of Interest Act and the Municipal Act, as well as an enhanced role for an integrity commissioner. He said,

“It is clear that Mississauga, and indeed all Ontario municipalities, requires a better ethical infrastructure,” concluded the report. Economic transparency will serve to “protect the public interest by removing possibilities for members of council to discharge their public offices in their pursuits of private interests.”

A lawyer for World Class Developments — the firm founded half a decade ago by Peter McCallion to push for a hotel and condominium complex in central Mississauga — had accused the city of putting forward a “sinister narrative” with respect to the company’s conduct.

If her son’s project had been approved, there would have been an upscale hotel and condominium complex rise in the city centre. However, the deal fell apart, however, amid the global credit crunch of 2008, leading to a $4-million settlement to Mr. McCallion’s company.

Fresh doubt was cast on Peter McCallion’s account of his role in World Class Developments, the defunct firm at the heart of Mississauga’s judicial inquiry. A lawyer who acted for the development company says he knew Mr. McCallion was a shareholder, and recalls discussing that role with the Mayor’s son on at least one occasion.

However, the surprising revelation from Emilio Bisceglia — which came as the city’s inquiry into allegedly suspect business dealings resumed after a two-month hiatus — stands in stark contrast to earlier testimony from Mr. McCallion, who maintains he never knew he held an ownership stake in World Class until this year.

The report rejected the younger McCallion’s baffling inquiry testimony that he did not understand that he really he owned World Class, but rather believed himself to be a simple real-estate agent.

I find that extremely hard to believe that he didn’t know he held an ownership stake in the company. He was either lying or alternatively, he is stupid. In either case, no one should have dealings with anyone who is a liar or is stupid but it would appear that his mother did and that is why the Inquiry was held.

Justice Cunningham wrote, citing the fact that Mr. McCallion lent money to help keep the company afloat, advanced the company’s interests with the land owners and held substantial shares in World Class at the outset. “Peter McCallion was clearly a principal in WCD. Furthermore, he knew he was a principal.”

I am forced to ask this rhetorical question. “If the mayor was dealing with someone else rather than her son, would she have looked further into the involvement of such a person connected with World Class? If not, then she too would be stupid. But since she was involved with her own son, it didn’t cross her mind that he would later say he wasn’t a shareholder in World Class when that in fact was a lie.

That is the danger of being too close to people you choose to do business when you are acting for the benefit of others.

Without the Mayor’s heavy involvement in her son’s project, the commissioner suggested, the deal would likely never have gotten as far as it did. When the project ultimately collapsed in 2008 and the vendors looked to sell the lands to the city, a legal dispute between OMERS and World Class arose, leading to a $4-million settlement to her son’s company. The Mayor became involved in settlement talks not only because of her interest in closing the Sheridan deal, but, ironically, to avoid ‘political issues’ that could have arisen from litigation involving her son’s company, the Cunningham report notes.

I think that the people have had enough of Hazel McCallian as Mississauga’s mayor. She should leave office and let someone who can be trusted to govern the affairs of that city. I doubt however that she will leave on her own volition although she has said that she won’t run for office at the next election.

Fortunately, some good things came from all of this. In a series of recommendations, Mr. Cunningham has called for changes to the Municipal Act to boost safeguards for city integrity commissioners, including a minimum term of appointment in office. The Municipal Conflict of Interest Act should also be amended to broaden the definition of private interests and to require that elected officials not only declare conflicts, but specify the nature and extent of said conflicts. In addition, Mississauga’s new code of conduct should be strengthened, including clear guidelines on how municipal politicians deal with lobbyists, Mr. Cunningham recommended. “It is clear that Mississauga, and indeed all Ontario municipalities, require a better ethical infrastructure.”

Further, I agree with the Commissioner's conclusion that there should be a limit as to how long someone can continue to remain in office. It seems that the longer a person remains in office, the greater is the risk that something will go bad. We all know what happens to apples after they are plucked from the trees and left to rot in the fields.

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