Hamilton. Election Compliance Audit Committee Minutes. 2:00 p,m, Monday, July 13, 2015 Rooms 192/193 Hamilton City Hall 71 Main Street West
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1 Hamilton Election Compliance Audit Committee Minutes 2:00 p,m, Monday, July 13, 2015 Rooms 192/193 Hamilton City Hall 71 Main Street West Present: Also Present: R. Anderson (Chair), B. Gilbert (Vice Chair), J. Klein, L. Lister Chad Collins, Candidate Teresa DiFalco, Candidate Lloyd Ferguson, Candidate Tom Jackson, Candidate Robert Pasuta, Candidate Terry Whitehead, Candidate Vivian Saunders, Applicant John Makkai, Applicant FOR THE INFORMATION OF THE ELECTION COMMITTEE: COMPLIANCE AUDIT (a) DECLARATIONS OF INTEREST There were no declarations of interest. (b) CONSIDERATION OF APPLICATIONS The Chair made the following opening statement: This Election Compliance Audit Committee meeting pursuant to Section 81 of the Municipal Elections Act, matter of a compliance audit applications. has been convened 1996, to consider the
2 Page 2 of 11 Each application will begin with a presentation by the Applicant which relates to the grounds of their application. This will be followed by a presentation from each Candidate which relates to the grounds in the application. Following the presentations, the Committee members shall have an opportunity to speak to the matter, including asking questions of the Applicant and/or Candidate or their agents. The Committee will, if they deem it necessary, ask the Candidates to return on July 15, 2015 at 5:30 p.m. with further documentation. The Committee may, if warranted, make their decisions at a later date with their decisions being posted on the City's website. Individuals in the gallery were advised to ensure that they include their contact information on the sign in sheet if they would like to be notified by of the Committee's decision. (i) respecting the campaign finances of Robert Pasuta, candidate for City Councillor, Ward 14 (Item 4(a)) application and a summary of her concerns for submitting the application. Ms. Saunders submitted a supplementary document to accompany her application, which has been retained as part of the official record: o Exhibit I - Corporation Profiles. The Chair then invited Mr. Robert Pasuta, the Candidate, to speak to the alleged contraventions listed in the application. Mr. Pasuta responded to the alleged contraventions, stating that signs were retained from the 2006 Municipal Election and re-used for the 2014 campaign not for the 2010 campaign as he was acclaimed; that a contribution was received from Ancaster Self Storage in good faith, with no reason to believe the company was affiliated with another contributor; that the inaugural dinner, was a special, separate event from the election night event and that a contribution from Flamborough Downs was received in good faith, and as he has a working relationship with it on agriculture issues important to Ward 14. The Committee asked Mr. Pasuta why he did not list an audit fee in his financial statement. Mr. Pasuta indicated that his accountant had suffered a personal emergency and was unable to complete his financial statement by the deadline and he was forced to retain the services of another accountant who did not submit an invoice to him by the deadline.
3 Page 3 of 11 The Committee asked Mr. Pasuta how he had arrived at the value stated in his financial statement for the 2006 campaign signs. Mr. Pasuta indicated that he called various sign companies for a value of similar signs and then applied a depreciation fee based on the age of the signs. After hearing the presentations by the Applicant and the Candidate, the Committee requested that Mr. Pasuta provide them with a copy of the invoice for his campaign signs in 2006 and indicated that a decision on the Application from Viv Saunders (the Applicant) respecting the campaign finances of Robert Pasuta, candidate for City Councillor, Ward 14 (Candidate) would be made at a later date. (ii) respecting the campaign finances of Terry Whitehead, candidate for City Councillor, Ward 8 (Item 4(b)) application and a summary of her concerns for submitting the application. Ms. Saunders noted that Mr. Whitehead had applied for an extension to his campaign period. The Chair then invited Mr. Whitehead, the Candidate, to speak to the alleged contraventions listed in the application. Mr. Whitehead was accompanied by Ms. Joanna Whitehead, Chief Financial Officer for his election campaign. Mr. Whitehead responded to the alleged contraventions, stating that he believed his filing was completed in the prescribed format; that the names of contributors were inadvertently missed in the attachment to his financial statement; that he took reasonable steps to inform contributors of the rules for campaign donations by issuing a letter to potential donors; that when he questioned the relationship between two companies, he requested them to submit a letter to confirm that they were not associated; that his sign inventory was difficult to value, due to the varying age, condition, material and size of the campaign signs; that he used his personal furniture and patio chairs to furnish his campaign office and that his 2014 phone charges were accurate in his financial statement, as he made less calls in 2014 than he did in Mr. Whitehead provided the Committee with the following document to substantiate the validity of his financial statement, which has been retained as part of the official record: Exhibit 2 - Correspondence from Terry Whitehead, the Candidate, and Ms. Joanna Whitehead - Chief Financial Officer for the Applicant's Campaign.
4 Election Compliance Audit Committee Minutes July t3, 2015 Page 4 of 11 After hearing the presentations by the Applicant and the Candidate, the Committee indicated that a decision on the Application from Viv Saunders (the Applicant) respecting the campaign finances of Terry Whitehead, candidate for City Councillor, Ward 8 (Candidate) would be made at a later date. (iii) respecting the campaign finances of Sam Merulla, candidate for City Councillor, Ward 4 (Item 4(c)) application and a summary of her concerns for submitting the application. Mr. Merulla was not in attendance and was represented by his Counsel, Mr. Douglas Burns and Mr. Kevin Fernandes, Student at Law at the meeting. Mr. Burns responded to the alleged contraventions respecting Mr. Merulla's financial statement through the submission of a document, which has been retained as part of the official record: o Exhibit 3 - Correspondence from Claudio Cicchetti, CPA, CA, Pettinelli Mastroluisi LLP, (Dated July 3, 2015) The Committee asked Mr. Burns if Mr. Merulla had sent letters to potential contributors informing them of the rules for making campaign donations. Mr. Burns said that no such letters were issued by Mr. Merulla, however other Candidates, such as Mr. Terry Whitehead, Candidate, Ward 8, have submitted proof of no affiliation when a similar alleged contravention has been cited. The Committee asked Mr. Burns if the Candidate was aware of the guidelines for contributors to a municipal election candidate. Mr. Burns said that Mr. Merulla was well aware of the rules and that they were followed. After hearing the presentations by the Applicant and the Candidate's agent, the Committee indicated that a decision on the Application from Viv Saunders (the Applicant) respecting the campaign finances of Sam Merulla, candidate for City Councillor, Ward 4 (Candidate) would be made at a later date. (iv) respecting the campaign finances of Tom Jackson, candidate for City Councillor, Ward 6 (Item 4(d)) Ms. Saunders was asked by the Committee to provide a general overview of her application and a summary of her concerns for submitting the application, Ms. Saunders responded by asking that Mr. Jackson address the Committee first.
5 Page 5 of 11 Mr. Jackson was accompanied by his agents Mr. Edward Dillane, Accountant and Mr. Grant McLean, Campaign Manager and his Counsel, Mr. Richard Skibinski, who was in the gallery. Mr. Jackson responded to the alleged contraventions, stating that he was under his campaign spending limit; that he used due diligence to ensure contributions to his campaign were not over the contribution limit; that the fundraising event he held was for campaign purposes; that he had no knowledge of whether he would have a surplus or a deficit at the conclusion of the campaign; that he has a full accounting and the receipts for the appreciation party he held and would supply that information if required; that the companies mentioned in the application are not associated; that the trade association listed in the application is a registered bargaining unit; that the services provided by the D.J., the florist and the caterer were listed at their fair market value as outlined in Exhibit 4 and that when he knew, or perceived, that there was a conflict respecting associated companies contributing to his campaign, he returned those donations and would always err on the side of caution. Mr. Jackson provided the Committee with the following documents to substantiate the validity of his financial statement, which have been retained as part of the official record: o Exhibit 4- Various Items of Correspondence respecting the Candidate's Financial Statement; o Exhibit 5 - Correspondence from Pat De Caria, Fundraising Chair and Barb Jackson, Fundraising Co-Chair, respecting a letter to Potential Contributors; o Exhibit 6- Program for Fundraising Dinner; and o Exhibit 7- Contributor Receipt Book. applications and a summary of her concerns for submitting the application. Mr. Jackson's agent, Mr. Grant McLean, concluded by stating that the fundraising event was clearly outlined in the Candidate's financial statement and that similar such events were held in previous campaigns and they resulted in no contravention of the MEA and that Exhibit 6 includes a list of the businesses who purchased advertisements in the program for the fundraising event; and that the revenue from the fundraising event is clearly shown in the financial statement. The Committee asked the Candidate for proof of who purchased tickets to the election appreciation event and were provided with the information they requested in Exhibit 7 of documents.
6 Page 6 of 11 After hearing the presentations by the Applicant and the Candidate, the Committee indicated that a decision on the Application from Viv Saunders (the Applicant) respecting the campaign finances of Tom Jackson, candidate for City Councillor, Ward 6 (Candidate) would be made at a later date. (v) respecting the campaign finances of Lloyd Ferguson, candidate for City Councillor, Ward 12 (Item 4(e)) application and a summary of her concerns for submitting the application. The Chair then invited Mr. Ferguson, the Candidate and his agent, Ms. Mary Ann Leach, CFO, to speak to the alleged contraventions listed in the application. Mr. Ferguson was accompanied by his agent, Ms. Ann Leach. Mr. Ferguson and Ms. Leach responded to the alleged contraventions, stating that he did not exceed his election spending limit; that he had the capacity to show his appreciation to campaign volunteers, with the expenses incurred after the campaign period; that the burden to find out if companies have exceeded their overall $5000 donation limit is not on the Candidate, but on the companies making donations; that receipts from his voting day party are available and that his surplus has been returned to the City. Mr. Ferguson provided the Committee with the following documents to substantiate the validity of his financial statement, which has been retained as part of the official record: o Exhibit 8 - from Ashley Van der Zyden, Brownlow Partners Chartered Accountants respecting the Compliance Audit; o Exhibit 9 - from Jack DiSalvia, Jaden Printing Services respecting signs The Committee asked Mr. Ferguson if he felt that the contribution from his auditor would be a conflict of interest. Mr. Ferguson replied that his auditor made the donation as an individual, not through his accounting firm, so he did not see it as a conflict. Mr. Ferguson also stated that the auditor, Mr. Barry Brownlow, did not conduct the audit himself, that an accountant in his firm conducted the audit. After hearing the presentations by the Applicant and the Candidate, the Committee requested that the Candidate provide the Committee with a letter confirming that the expenses from his voting day party were post-election expenses and information respecting the two areas of the attachment to the Candidate's financial statement, which were left blank. The Committee indicated that a decision on the Application from Viv Saunders (the Applicant) respecting the campaign finances of Lloyd Ferguson, candidate for City Councillor, Ward 12 (Candidate) would be made at a later date.
7 Page 7 of 11 (vi) respecting the campaign finances of Chad Collins, candidate for City Councillor, Ward 5 (Item 4(e)) application and a summary of her concerns for submitting the application. The Chair then invited Mr. Collins, the Candidate, to speak to the alleged contraventions listed in the application. Mr. Collins responded to the alleged contraventions, stating that the associated companies listed by Ms. Saunders are not associated and when he is sending letters soliciting donations, he makes the contribution rules clear to potential donors; that the filing fee was recorded properly in his financial statement; that he has receipts for the printing of his brochures; that the phone and internet charges are accurately reflected in his return; that he has receipts for his election party and that any inventory from previous campaigns is in the return with the value reflected as though the items were purchased today. After hearing the presentations by the Applicant and the Candidate, the Committee indicated that a decision on the Application from Viv Saunders (the Applicant) respecting the campaign finances of Chad Collins, candidate for City Councillor, Ward 5 (Candidate) would be made at a later date. (vii) John Makkai submitting an Application for Election Compliance Audit respecting the campaign finances of Teresa DiFalco, candidate for City Councillor, Ward 10 (Item 4(f)) The Committee noted that Mr. John Makkai was in attendance at the proceedings, however, he was not able to remain to speak to his application due to a medical emergency and that his opportunity to provide the Committee with submissions would be scheduled for a future meeting. Ms. DiFalco provided the Committee with her availability for a future meeting and was also informed of her options for making her submissions, at today's meeting or at the future meeting. Ms. DiFalco advised the Committee that she would prefer to make her submissions at today's meeting. The Chair invited Ms. Teresa DiFalco, the Candidate, to speak to the alleged contraventions listed in the application. Ms. DiFalco was accompanied by her agent, Mr. Cal DiFalco, her Campaign Manager.
8 Page 8 of t I Ms. DiFalco and her agent Mr. DiFalco responded to the alleged contraventions, stating that all pages of her financial statement were submitted to the City however, not all of the pages were posted on the website; that she worked at the Ontario Gaming Secretariat, however, this organization has no relationship with the Alcohol and Gaming Commission of Ontario or lottery licensing; that she complied with the MEA; that she followed the candidate's guide for municipal elections; that she hired a second auditor who is satisfied with the financial statement she previously submitted and that a licence was not required for the 50/50 draw held by the Candidate as it was carried out in good faith and in accordance with the rules. Ms. DiFalco provided the Committee with the following document to substantiate the validity of her financial statement, which has been retained as part of the official record: o Exhibit 10 - Teresa DiFalco's Election Campaign Finances The Committee asked Ms. DiFalco how items donated to an auction she held were valued. The Candidate stated that they were assigned fair market value and that they followed the candidate's guide to municipal elections. The Candidate's agent stated that the value of each item depended on what the item was. After hearing the presentation by the Candidate, the Committee requested that Ms. DiFalco provide a description of each gift/item at the auction; the fair market value of each item; how the fair market value was determined for each item; how much was received for each item; the total amount received for all auction items and where in her Form 4, this total amount was reflected. The Committee indicated that a future meeting would be held to hear Mr. Makkai at a later date and time and that a decision on the Application from John Makkai (the Applicant) respecting the campaign finances of Teresa DiFalco, candidate for City Councillor, Ward 10 (Candidate) will be made at a later date.
9 Page 9 ot' 11 (d) ADJOURNMENT (Klein/Gilbert) That, there being no further business, the meeting of the Election Compliance Audit Committee be adjourned at 5:19 p.m. Respectfully submitted, Ross Anderson, Chair Election Compliance Audit Committee Lauri Leduc Legislative Coordinator Office of the City Clerk
10 Page 10 of 11 Supplemental Documentation Received Following the July 13, 2015 meeting: Exhibit 11 - Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Tom Jackson, candidate for City Councillor, Ward 6 (Item 4(d)) (Received July 15, 2015) Exhibit 12 - Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Lloyd Ferguson, candidate for City Councillor, Ward 12 (Item 4(e)) (Received July 15, 2015) Exhibit 13 - Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Robert Pasuta, candidate for City Councillor, Ward 14 (Item 4(a)) (Received July 15, 2015) Exhibit 14 - Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Sam Merulla, candidate for City Councillor, Ward 4 (Item 4(c)) (Received July 15, 2015) Exhibit 15 - Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Terry Whitehead, candidate for City Councillor, Ward 8 (Item 4(b)) (Received July 15, 2015) Exhibit 16 - Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Chad Collins, candidate for City Councillor, Ward 5 (Item 4(f)) (Received July 15, 2015) Exhibit 17 - Supplemental information requested by the Committee members from Mr. Pasuta, copy of the invoice for his campaign signs in 2006 Exhibit 18 - Exhibit t9 - Supplemental information requested by the Committee members from Mr. Ferguson, expense receipts from his voting day party confirming that they were post-election expenses and information respecting the two areas of the attachment to the Candidate's financial statement, which were left blank Supplemental information for the Committee members from Mr. Burns on behalf of Mr. Merulla, copies of deposits and receipts from his campaign
11 Pagellofll Exhibit 20 - Exhibit 21 - Exhibit 22 - Exhibit 23 - Exhibit 24 - Exhibit 25 - Exhibit 26 - Supplemental information requested by the Committee from Ms. DiFalco, a description of each gift/item at the auction; the fair market value of each item; how the fair market value was determined for each item; how much was received for each item; the total amount received for all auction items and where in her Form 4, this total amount was reflected. Supplemental information requested by the Committee from Mr. Jackson receipts totaling $24, for Voting Day Party and other expressions of appreciation/appreciation notices for volunteers (Received July 20, 2015) Supplemental information requested by the Committee from Mr. Jackson, Schedule 2, Part IV, Receipts/Invoices for Fundraising Dinner, October 14, (Received July 20, 2015) Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Lloyd Ferguson, candidate for City Councillor, Ward 12 (Item 4(e)) (Dated July 21, 2015) Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Sam Merulla, candidate for City Councillor, Ward 4 (Item 4(c)) (Dated July 21, 2015) Correspondence from Claudio Cicchetti, CPA, CA, Pettinelli Mastroluisi LLP, respecting an Application for Election Compliance Audit respecting the campaign finances of Sam Merulla, candidate for City Councillor, Ward 4 (Item 4(c)) (Dated July 20, 2015) Supplemental Submission to the Committee members from Ms. Viv respecting the campaign finances of Sam Merulla, candidate for City Councillor, Ward 4 (Item 4(c)) in response to Exhibit 24 (Dated July 22, 2015)
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