Rob Ford exceeded campaign spending by $40,000: audit
Published Friday, February 1, 2013 1:23PM EST
Last Updated Friday, February 1, 2013 10:55PM EST
Mayor Rob Ford exceeded his campaign spending limit by $40,168 during the 2010 election, according to an audit of his finances.
An independent report by Froese Forensic Partners found that Ford exceeded the $1.3-million limit by about three per cent, accepted donations from corporations and took loans from his family’s company – all in “apparent contraventions” of the Municipal Elections Act.
The report, released Friday, highlights a number of instances where election spending rules were apparently broken.
It is now up to the city’s compliance audit committee to decide whether to launch legal proceedings against the mayor. If non-criminal charges are laid under the Municipal Elections Act, Ford faces penalties ranging from fines of up to $25,000 per offence- to losing his job.
Just last week, Ford won an appeal to stay in office after a lower-court judge found him guilty of breaking conflict-of-interest rules.
If the mayor is charged with violating the Act, a special prosecutor would have to be appointed, and reaching a verdict could take months.
The audit of Ford’s election campaign finances found that unrecorded expenses resulting from in-kind contributions and re-allocation of the costs of certain events contributed to his overspending.
The audit also found that the Ford family company, DECO Labels & Tags, provided “generous credit terms to the Ford campaign that extended well beyond the period when the campaign had secured a sufficient line of credit arrangement with a Chartered Bank.”
Those credit terms are among the “apparent” contraventions of the Act, which states that loans can only be obtained from a bank or another recognized lending institution.
Ford’s campaign also accepted 11 cheques totalling $6,000 from corporations, which should have been returned and replaced with personal cheques, according to the auditor. All those cheques were issued under an individual's name and recorded as such in financial statements, the report found.
The audit found that Ford accepted some money orders as cash donations exceeding $25 each, which is also against the rules. However, in all other instances, inappropriate cash donations were returned by the Ford campaign or forfeited to the city, according to the audit.
“It is unclear why some cash contributions were converted to money orders and others returned to contributors or forfeited to the City,” the report says.
The request for a forensic audit was filed in the spring of 2011 by two Toronto residents, one of whom is involved with Ford’s conflict of interest case. The residents, Max Reed and Adam Chaleff-Freudenthaler, accused Ford of illegally borrowing some $77,000 from his family’s company for the campaign.
In a statement, the complainants said they will ask the compliance audit committee to “proceed with prosecution in a timely manner,” given the “extraordinary number and severity of apparent contraventions of election law.”
Before the audit was released Friday, Ford’s brother, Coun. Doug Ford, said the accusation of campaign misspending is just another attempt to thwart the mayor.
“They want to politically kill him. That’s how much they despise Rob Ford,” he said.
Ford had previously said he had “nothing to hide.” The auditors noted that the mayor and his campaign team co-operated with their probe and provided a large volume of “well-maintained” and “organized” financial records.
Among the audit’s other findings:
- Out of 21 events described as fundraisers in Ford’s books, four did not meet fundraising criteria and were “more promotional in nature.” The auditors reclassified $32,421 in expenses related to those events and said they should have been subject to the spending limit.
- A total of $5,805 was incurred prior to Ford filing his nomination papers, contrary to the rules. Those expenses included an invoice from DECO for printing “Ford for Mayor” signs.
- The audit found instances where Ford received “preferential treatment for products and services,” including the rental of an RV. However, the audit noted that DECO did not charge Ford discount prices for the campaign signs.
- Ford’s campaign accepted more than $10,000 in cash donations during the weeks immediately leading up to the election, but all the money coming from identifiable donors was later returned and the contributors were asked to write personal cheques instead. More than $13,000 in cash contributions was forfeited to the city in cases where the donors could not be identified or were out-of-province residents.