Dave Robson, a former vice-president of MFP Financial Services Ltd. of Mississauga, bristles briefly when he is asked about what the phrase "Tie stuff" in his handwritten note means.
"That's Tie Domi, with all due respect to the journalists here," he tells a public inquiry into MFP's dealing with a city council that found itself paying a lot more than it had bargained for.
His sarcasm is not lost on the reporters present, who have been feasting in recent weeks on any references to the Toronto Maple Leafs star and his brother Dash -- an MFP salesman.
Mr. Robson explains that he was dealing with Tie Domi because he and the hockey star worked together on charitable events.
But this is not Toronto, where MFP's controversial computer-leasing deal has been making headlines. This is Waterloo, and Mr. Robson is on the witness stand at the other public inquiry into MFP's municipal dealings.
Fittingly, it is taking place in the huge athletic facility at RIM Park, a 200-hectare site that boasts a municipal golf course and 15 kilometres of hiking trails. The facility, which includes four ice surfaces, two double gymnasiums and an indoor soccer field, was financed through a controversial deal the city signed with MFP in 2000.
In another irony, it was Mr. Robson, the former Junior A and university hockey player, who was a close acquaintance of Tie Domi and who first suggested that MFP hire Dash.
Mr. Robson made $3.8-million on the Waterloo deal -- even better than Mr. Domi, who earned $1.2-million in commissions in Toronto. The deal, approved by Waterloo council on Sept. 25, 2000, was a complicated double-lease agreement that gave the city money in advance from MFP to build the park and sports complex, which was then repaid over the life of the contract.
It was a deal signed in a bar after the council meeting.
The money to build the project came from what is called the head lease, in which MFP leased the facility from the city for 31 years, but instead of making annual rent payments, paid down the lease by giving Waterloo $48,353,159 on Oct. 4, 2000.
In return, the city subleased the complex back and committed itself to a stream of payments that it thought would total $113-million over the years.
How wrong it was.
Nearly a year later, on June 4, 2001, after a reporter from the Kitchener-Waterloo Record starting asking detailed questions, the city learned from MFP that it was obligated to make payments totalling $227.7-million.
Seven weeks later, the city sued, arguing that Mr. Robson and MFP had defrauded it by misrepresenting the deal, and the case was settled out of court. The city got $14-million as a settlement, which reduced the cost of payments to $145-million.
Now, after more than 60 days of hearing by Mr. Justice Ronald Sills of the Ontario Superior Court, the Waterloo inquiry is nearing its end. The last witnesses will testify in late spring, and the final report is expected by early summer.
The evidence shows that the critical issue was the wording of the sublease, which was delivered by Mr. Robson to the city only a couple of hours before the council approved the deal.
It did not set out a schedule of annual payments the city was to make. Rather, it showed the payments for the first six years, which mirrored MFP's payments under the head lease.
The rent for the remaining years was to be set according to a formula, which, if slightly misinterpreted by omitting one step, produces a stream of payments of $113-million that mirrors payments under the head lease -- what Waterloo thought it was paying -- but if the step is done correctly, the obligation is $227.7-million -- what Waterloo found out it was paying.
Kirk Stevens, a lawyer representing Clarica Life Insurance Co., one of the parties at the hearing, said once in the hearing there were only two explanations for the fact that, if done wrong, the formula makes the rent schedules in the two leases match up.
"The first possibility is that it's almost a divine, preordained coincidence, and the other is that there's some human design involved," Mr. Steven suggested.
Waterloo's then-treasurer, John Ford, testified that he trusted Mr. Robson's representations that the cash streams were the same for both leases, but admitted that he never worked out the sublease payments for himself.
Last week, Mr. Robson testified that he had shown the schedule to Mr. Ford in the afternoon before the council meeting that locked in the financing for the project. Correction The agreement providing financing of a large sports and recreation park in Waterloo, Ont., was signed by the mayor at the counter in the clerk's office. Incorrect information appeared in an article published Feb. 10. (Saturday, February 15, 2003, Page A2)
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