The editors of Spacing asked our long-time contributor Adam Chaleff-Freudenthaler to write a personal column on the motives and reasons why he and Toronto resident Max Reed petitioned the City of Toronto to audit the campaign finances of Mayor Rob Ford.
Earlier this month, Max Reed and I successfully petitioned for an audit of Mayor Rob Ford’s election campaign finances. Repeatedly we were asked about our motives, and for good reason. It’s no secret that Rob Ford and I disagree on both the style and substance of his mayoralty to date so the motives may appear to be entirely political. Knowing the reality of word limits, in response to the media questioning our motives, I often responded with a line like, “We want a level playing field for all candidates.” So I’d like to now expand on what I mean by that and why there is a lot more on the line than whether Ford will be prosecuted for what we allege were violations of provincial and municipal election laws.
As a starting point, among the general intentions of the Municipal Elections Act (MEA) is to facilitate fair elections that empower citizens to choose their leaders without undue influence by those with the deepest pockets. While it is far from perfect, the MEA largely accomplishes this by placing limits on how much an individual can donate, allowing Toronto to ban donations from corporations and unions, and, though candidates can donate as much as they like to their own campaign, placing a spending limit so no one can pull a Bloomberg. The province even sealed off backdoor contributions through loans by forcing them to be arranged only with recognized financial or lending institutions, and has taken care to ensure in-kind donations are subject to all the same rules as cash contributions.
With that in mind, the most important issue we identified in our compliance audit request relates to the financial relationship between Doug Ford Holdings (DFH) and the Rob Ford Campaign (RFC).
What we alleged, and Ford’s lawyer agreed with in his oral submissions to the Compliance Audit Committee, is that DFH paid more than $77,000 of bills for the RFC in the first few months of the campaign without being reimbursed until March, 2011. How to characterize this arrangement is where we diverge with Ford’s lawyer, who essentially claimed DFH was a supplier to the RFC that contracted with various vendors to provide things like an event venue, printing services, etc. Reed and I contend that this $77,000 was a loan. In either case, it is our contention that the RFC did not pay fair market value for the loan (no interest was charged) or, if you believe the supplier story, for DFH’s role as a supplier (no administrative costs were charged, no profit margin was built in and HST wasn’t included), which caused us to allege that the RFC received in-kind corporate contributions from DFH.
This may seem like we’re hung up on technicalities and small numbers but it’s anything but that. If the RFC’s relationship with DFH is deemed legitimate, it will mean a new and anti-democratic election finance model is born. Candidates could search out a rich benefactor – be it a business, union or wealthy individual – to front them the 1 to 2 million dollars it takes to run for mayor in Toronto by acting as a lender or “supplier,” ensuring that the candidate has all the financing they need to be successful right from the get go.
The importance of early money can’t be overestimated. It limits the need for campaigns to expend energy and scarce resources courting Torontonians for donations and makes it appear as though they have momentum by hosting extravagant events, securing prime campaign offices and conducting extraordinary advertising campaigns.
Though obviously partisan, George Smitherman campaign manager and former Toronto District School Board chair, Bruce Davis agrees and used this metaphor in a May 6 tweet: “Early money is like yeast,” it makes dough rise. Davis, who was a major player at City Hall during the Lastman administration and founded Urban Intelligence, one of the first full-service municipal lobbying practices in Canada, notes in that same tweet, “The Ford campaign’s method of start-up financing will change elections in Ontario forever.”
Or, for another testimonial on the importance of early money, read Jonathan Goldsbie’s recent Spacing interview with Shelley Carroll, who lamented her inability to secure early money as the reason she didn’t run for mayor in 2010.
If the Ford funding model is upheld, the only condition on receiving a benefactor’s money would be that the candidate has to pay back any funds received before the campaign officially ends (June of the year after Election Day). And as we’ve seen already, if you win the mayor’s seat it’s easy to raise a ton of money.
But here’s the twist: our elections are already tilted in favour of wealthy candidates. There is no limit on how much a candidate can donate to their own campaign so long as they stay within the spending limits. If Ford had spent his own money (he could even have sold part of his stake in his company if he needed liquid assets) instead of creating an arrangement between DFH and the RFC, he would have been clearly within the rules and our election finance laws wouldn’t be in peril.
Though I would like to see limits on how much a candidate can contribute to their own campaign, at least in the current system we know where the money is coming from so there are no private interests hiding in the shadows when we cast our ballots. That is why I believe it is worth fighting to preserve at least the status quo, and then pursue improvements to election finance laws.
Photo by Shaun Merrit