"The second we release this contract, the shitstorm will become a hurricane." – email from an insider
“The good old boys prevail as always. Don’t you love it.” – a non-sarcastic email from one city councillor to another
The Bill Arrives
When I die and (hopefully) go to heaven, I want to chair an Ontario Judicial Inquiry. If you luck out and get one like Collingwood's, you get to spend $7.1 million on two years of work and write an 800 page report which ends with 306 (mostly) motherhood and apple pie recommendations.
The law provides that once a provincial inquiry is called, neither the province nor the mayor of Collingwood nor, presumably, the Holy Ghost can do a thing to speed up the proceedings or to stop the legal tab. All the ratepayers can do is hold on for the ride.
To be fair, this is not quite like spending $800,000 in legal costs to defend the bulldozing of piping plover habitat (Town of South Bruce Peninsula, say hello - and we note with interest that your case has not yet even made it out of the Divisional Court, at which time the tab will likely hit one million). But for sheer audacity (Collingwood had estimated a legal bill one quarter of that delivered to it), this account for legal services rendered sure comes close.
The inquiry report was issued last month. It is a lovely report, with terrific colour graphics and lively fonts. Then again, seven million dollars ought to buy that sort of thing.
An Ice Rink Cover and the Sale of Some Shares in a Municipal Utility
Several years ago, Collingwood was in an uproar over what boils down to insider dealing. The plot revolves around a former member of parliament, one Paul Bonwick. At the time, Bonwick was the mayor’s brother and a close friend of a key city bureaucrat. He also had tight business ties with two other city councillors. When played correctly, those kinds of connections do not exactly lead to abject poverty.
Selling off Shares in the Utility
Collingwood owns an electrical utility called Collus. Some towns have sold part or all of these things off to make some money, others have retained them.
One Mr. Ed Houghton headed up Collus. On his own initiative, he retained a consultant to price out the value of Collus and to sus out prospective purchasers or “strategic partners”, including a corporation called PowerStream. PowerStream was all along the favoured child. It was favoured, that is, with inside knowledge and inside connections, supplied mainly by Bonwick and Houghton.
Incredibly, city council was blissfully unaware that it was even entertaining the thought of selling. Houghton was on a lark of his own.
By the time the sale proposal did arrive at council, the cake was well baked and PowerStream was teed up as the favourite suitor. The ingredients included a $10,000 monthly consultancy fee which PowerStream paid to a Bonwick company. (After two months of work, this was ramped up to $15,000). In total, Bonwick was paid over $300,000 in fees, even though PowerStream’s head admitted that it was hard to see the value he added to much of anything.
Also, on the side, Bonwick arranged for PowerStream to partner on a solar project with Collus, for which his company was paid 35%. The first cheque for Bonwick on that job was for $30,000. Three days later, Bonwick turned around and cut Houghton’s wife a cheque for $18,000. Bonwick explained this as an “advance rental payment” on a Florida home which the Houghtons owned. The judge did not exactly write LOL at this in his report but did conclude that this explanation was nonsense. He did not elaborate as to what he thought the payment may in fact have been for.
As the deal for a “strategic partnership” between Collus and PowerStream emerged, the city CAO, Kim Wingrove, was conveniently terminated. There were personality issues. She was “too emotional”, said the mayor. She never really got the whole friend and insider things. She seemed a little fussy about stuff like proper procurement practices.
Asked to resign, she refused to go away quietly and was fired, knowing full well what that might do to her career in the insular world of Ontario municipalities. Wingrove landed on her feet, a testament to what integrity sometimes leads to. Now CAO for the County of Grey, she emerges as one of the few heros in this sordid tale.
Her replacement for the following year? The ever present, ever helpful Mr. Houghton. You. Cannot. Make. This. Stuff. Up.
Covering the Ice Rink
Bonwick made himself useful to the good burghers of Collingwood at least one more time. The city was thinking of covering over their outdoor rink and an outdoor pool. Bonwick thought a fabric superstructure might be just the thing. And if it could be sole sourced, well, that would be even a better thing for all concerned, especially him.
A company called Sprung manufactured the structure and it was sold through an intermediary called BLT. Now, “sole source” means untendered. Such deals only make sense if either the project is so small that tenders are unlikely to surface if solicited or the product is so wonderful and so absolutely unique that there are literally no other competitors out there. It’s hard to make that case for a $12m build for a coverall product so ubiquitous that it can be found in a field south of Tara.
Worse, the city did not even bother to negotiate the price, not by a dime. Houghton thought the price was firm, like the price tag on a can of beans at the local IGA.
For his outstanding services over the course of less than a month (“fabric superstructure company, I am pleased to introduce to you Collingwood”), Bonwick’s own consulting company was rewarded with a “success fee” of six hundred and seventy thousand dollars (it helps to spell these things out sometimes). This fee was not disclosed up front to city council.
A concerned citizen (and Collingwood was starting to have lots of these) asked the town whether Sprung had paid the mayor’s brother a commission. Knowing full well that technically BLT had paid the commission, Houghton actually emailed Sprung to ask if Sprung had paid Bonwick anything. The judge called this creating a paper trail. I call it worthy of a Seinfeld sketch.
So Concerned Citizen is told the technical truth, namely, that Sprung had not paid a dime (BLT had). You see, Mr. Concerned Citizen, if your FOI question is not precisely bang on, it will not get what most would call a truthful answer.
Now if your CAO turns out to be worse than useless when it comes to protecting the city’s interests, other staff members are not exactly going to stick their heads above the parapets. That’s just life.
The city clerk testified that while she was concerned that the contract was not tendered, Houghton was “charismatic” and thus she was convinced to help compose the staff report which recommended the sole source bid.
At the hearing, Bonwick was shocked - shocked - at the suggestion that this $675,000 gravy was tacked onto the purchase price for the town.
As a soon to be former American politician might say, it’s all kind of sad.
Recommendations
The current mayor says that they have learned invaluable lessons from this inquiry. That is questionable, given that most of the salient facts (absent the juicy colour) were known the day before the inquiry was called.
If this were a free-flowing conversation in a bar without the judicial trappings or costs of an inquiry, under “lessons learned” we would overhear the following, all preceded with the salutation, “you idiot”:
1. You don’t allow siblings access to municipal procurement. Even if a brother is not technically included in conflict of interest legislation, why don’t you act, Madame Mayor, as though he is.
2. You don’t sole source a twelve million dollar buy. Just don’t.
3. You don’t show blatant favouritism to any bidder on any job.
4. You don’t ride shotgun over your staff.
5. You don’t respond as might a weasel to a FOI request.
Justice Marrocco makes some decent recommendations, though most are motherhood variants on a hortatory “be ethical”. He would like to see a Code of Conduct which:
· requires councillors to comply with the law (seriously)
· prohibits councillors from maliciously going after the reputation of any staff member
· precludes councillors from making money on their insider knowledge
To nail all of this onto the hearts and minds of those elected, the judge wants training and education on the Code. This is always a rather endearing approach to moral deficit; it is assumed that ignorance, not evil causes bad things to happen.
So he wants councillors to sign annual forms saying they will abide by the Code. He wants annual meetings between each councillor and the integrity commissioner. He does not mandate that speakers be installed in councillors’ homes chanting out the Code thrice daily, but you sense he would have liked to.
All good and well. But the simple in your face reality is that if you have councillors and senior staff determined to act unethically and in the face of blatant conflicts, all the rules in the world cannot save your town – or its budget.
John A. Tamming
Owen Sound
