During May and June of 2011, Toronto Mayor Rob Ford and his brother Doug, councillor for Ward 2, took an active role in discussions between a large Chicago-based printing company, RR Donnelley, and the city’s purchasing officials, about the possibility of outsourcing municipal printing functions. The talks began with two meetings between Councillor Ford and Barry Waddick, Donnelley’s director of sourcing services, on May 3 and June 9.
Mayor wants to be present
In mid-June, Mayor Ford summoned then purchasing and materials director Lou Pagano to a meeting. In an e-mail exchange with City Treasurer Giuliana Carbone, Mr. Pagano notes that the mayor was intent on being personally present at the meeting, despite his offer to talk to the supplier "directly."
Download: June 14, 2011 letter from Lou Pagano to Giuliana Carbone
Summary of meeting
After a June 15 meeting with six Donnelley executives, Mayor Ford and Councillor Ford, Mr. Pagano sent a summarizing e-mail to Ms. Carbone, in which he pointed out that the company arrived with criticisms of the city’s in-house printing operations, despite being a long-time supplier. The discussion, he wrote, focused on the fine points of the city’s in-house printing operation – which does about $9-million worth of printing per year – such as the use of bar codes on tags and mailing envelopes inserted into tax bills.
Download: June 15, 2011 letter from Lou Pagano to Giuliana Carbone
Donnelley tours Deco, arranges to refer clients
City officials interviewed by The Globe and Mail said that neither the Fords nor the Donnelley executives ever mentioned that the company was also in talks with Deco Labels and Tags, the Fords’ family business, about a partnership arrangement that would see Donnelley refer business to Deco. Around the same time that the Fords were helping Donnelley lobby the city, two Donnelley officials toured Deco's Toronto manufacturing facility and discussed “formulating a plan” about how the printing giant could pass business to Deco, said Leonard Rudner, Deco’s vice-president of sales from 2010 to 2011. Mr. Rudner kept the business card of one of the Donnelley representatives – Mr. Waddick, the same Donnelley official who lobbied Mayor Ford, Councillor Ford and city staff.
Rules exist for unsolicited proposals
In the years following the MFP computer-leasing procurement scandal, which culminated with a 2002 inquiry by Justice Denise Bellamy, the city adopted stricter procurement rules, including restrictions on companies attempting to pitch so-called “unsolicited proposals.” Today, the rules prohibit suppliers from bidding on their own proposal to reduce the potential for conflicts of interest. On several occasions, according to documents and e-mails obtained by the Globe, Mr. Pagano reminded Donnelley executives about the regulations around unsolicited proposals.
Download: June 30, 2011 letter from Lou Pagano to Donnelley officials
Printing study offered
On June 30, five Donnelley executives, including Mr. Waddick, met with several city purchasing officials to continue the discussion about the municipal printing operations. Mr. Ford asked to be kept apprised of the discussions. In minutes obtained by The Globe, Donnelley executives pointed out that the earlier meetings with the Fords resulted in a proposal for "a better way for the city to do things with concern to printing." They added that Mr. Ford toured one of their facilities. Donnelley president Allan Hallis said the firm was also interested in outsourcing the printing for all the city’s agencies, boards and commissions, and offered to do a $20,000 study on potential savings as a pot sweetener. “If they found there were no cost savings, the report would be free,” the minutes noted.
Download: June 30, 2011 meeting minutes