RR Donnelley and Sons, the U.S. commercial printing giant that was vying for the City of Toronto’s printing operations with the help of Mayor Rob Ford and his brother Doug, is a client of the Ford family’s label business, a Globe investigation has found.
In June, Councillor Ford said that his family business, Deco Labels and Tags Inc., had received “zero” referrals from RR Donnelley, a Chicago-based printing company that lobbied city officials – with the help of the Fords – in an unsuccessful bid to conduct a strategic review of Toronto’s $9-million in-house printing division.
But interviews with former staff at Deco’s Toronto plant, and an internal list of Deco clients examined by The Globe, shows that the Ford family business has been subcontracted by Donnelley, a Fortune 500 company that posted $10.5-billion (U.S.) in revenue in its last fiscal year, to print among other things, baggage tags.
The Fords’ advocacy on behalf of RR Donnelley, as well as another major Deco client that makes soaps and shampoos, Apollo Health and Beauty Care, is being investigated by Toronto’s Integrity Commissioner. Ethics watchdog Democracy Watch and several citizens have filed complaints with Janet Leiper, alleging that the Fords have inappropriately combined their private business affairs with their duties as elected officials and allegedly violated the code of conduct for members of council.
Last week, John Tory, one of the mayor’s chief rivals in the 2014 race for mayor, urged Ms. Leiper to conclude her investigation before the Oct. 27 election.
Gavin Tighe, City Councillor Doug Ford's lawyer, said in an e-mail late Sunday night that his client had responded to the Integrity Commissioner's investigation. "With respect to Councillor Ford, please be advised that at no time has Councillor Ford acted in breach of the Code of Conduct for members of city council or of the Municipal Conflict of Interest Act."
For several years, Deco has been subcontracted by Moore Canada, a printing company that was acquired by Donnelley in 2007, to print items such as Air Canada baggage tags, four former Deco employees said in interviews.
The Deco spreadsheet examined by The Globe shows that the phone number associated with the Moore account is the phone number for the head office of RR Donnelley Canada. The salesperson assigned to the Moore Canada account –code MOO001 – is Councillor Ford.
Salespeople at Deco, including the Fords, receive commission payments when one of their clients places an order, two former Deco employees with knowledge of the commission system said in interviews. The size of the commission varies from account to account and can go as high as eight per cent, one source said.
Reached by phone, Councillor Ford said he had not read a list of questions sent to him by the Globe about the relationship with Donnelly but said he had forwarded them to his lawyer. Among the questions he did not address was how much he has received in commissions, if any, through his work for Moore/Donnelley.
“You guys have a real, real problem about attacking our company, our credibility,” Councillor Ford said.
Mayor Ford has said he did nothing wrong by helping clients of his family business. There is nothing in law that requires the mayor or Councillor Ford to publicly disclose Deco’s clients. They are required under the Municipal Conflict of Interest Act to declare a conflict if, at city council, they are voting on, or speaking to, a matter in which they have a direct or indirect pecuniary interest. None of their advocacy on behalf of RR Donnelley or Apollo took place at council.
In response to reporters’ questions about Donnelley and Apollo, the mayor said in a scrum last week, “I help out everybody. I help out everyone and I’ve never [taken] one dime of taxpayers’ money. Just be careful what you write. I’ve never taken a dime of taxpayers’ money and I never will.”
In June, The Globe published a report about how the Fords were arranging meetings between city procurement officials and RR Donnelley in 2011. Around the same time, a Donnelley official who registered to lobby Councillor Ford and the mayor – the company’s director of sourcing services, Barry Waddick – toured the Fords’ Toronto plant and was arranging to have Donnelley refer business to Deco. The information about the Deco-Donnelley arrangement was based largely on an interview with Leonard Rudner, who served as a vice-president of sales at Deco for about 18 months until he resigned in late 2011. When Mr. Rudner left Deco, Donnelley had yet to refer any business, Mr. Rudner said.
In subsequent interviews with other former Deco employees, they clarified that Donnelley was in fact a client of the Ford family business, though the business was referred to internally as the Moore account.
“They do definitely do business with RR Donnelley. It may not have grown to the extent that they were looking for, but they do,” said one former Deco staffer, who agreed to speak on the condition of anonymity.
Four former Deco employees said in interviews that they recalled the company printing Air Canada priority baggage tags on behalf of Moore. “There were hundreds and hundreds of these tags,” one source said.
Another source said he had conversations with Councillor Ford about the potential business that could flow to Deco if it successfully partnered with Donnelley. This source said he recalled Councillor Ford highlighting the fact that Donnelley was based in Chicago, where Deco also has an office. The source said he specifically recalled Councillor Ford saying about Donnelley: “We don’t want to screw it up.”
None of the sources could say with certainty how much Donnelley/Moore’s business was worth to Deco, nor could they say exactly when the relationship began – only that Deco had been doing the printing for several years.
With reports from John Lorinc and Kate Hammer