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conflict of interest

Mississauga mayor Hazel McCallion address the media and public on Oct 3 2011 after the findings of a judicial inquiry were made public.Fred Lum/The Globe and Mail

He is, by all accounts, a shrewd administrator and an ambitious political adviser. But former Mississauga city manager David O'Brien, currently a member of OMERS pension plan board, was best known as Hazel McCallion's fixer – a veteran public servant whose relationship with the long-serving mayor became so close that she later asked him to serve as a trustee in her private family trust.

Mr. O'Brien also played a complicated back-stage role in the failed hotel/convention centre deal involving Ms. McCallion's son, Peter, according to the findings of Justice Douglas Cunningham's inquiry, released Monday.

The report focused on why the long-serving mayor had a "real and apparent" conflict because she'd spent three years pitching a hotel-and-convention centre deal backed by a firm in which her son was an investor. Ms. McCallion, however, grabbed the media spotlight Monday by refusing to admit she had done anything wrong.

But the 386-page report also offered a wealth of revealing details about how Ms. McCallion had turned to Mr. O'Brien at a golf tournament to ask him to help settle a lawsuit between World Class Developments, in which Peter McCallion had an stake, and the owners of the disputed land, among them OMERS, on whose board Mr. O'Brien sat. He was also a director of Sheridan College, which eventually cut a deal with the city to develop a campus on the 8.5-acre site, located near city hall.

"He faced several discrete conflicts of interest while making inquiries on behalf of Mayor McCallion and by negotiating with WCD," Judge Cunningham wrote, noting that Mr. O'Brien owed a "fiduciary" duty both to OMERS and the mayor's children, including Peter, at the same time as he was trying to work out a settlement that ultimately led to a $4-million pay-out to WCD.

Judge Cunningham also slammed Mr. O'Brien for failing to disclose a pivotal detail of a 2000 deal that would see Mississauga's power utility spun off into a separate firm, called Enersource. At the time, he was acting both as Enersource's incoming CEO as well as Mississauga's city manager, in effect placing him on both sides of the negotiation. Ms. McCallion said Monday that she didn't regard that as a conflict because the city owned 90 per cent of the new company's shares.

In an e-mail statement provided to The Globe and Mail, Mr. O'Brien said of the inquiry's findings: "I welcome the Report, including the Commissioner's comment that Mississauga will now benefit from a thriving Sheridan College campus at the City core. I'm also proud of the fact that the Enersource transaction has provided the City with approximately $375-million towards its cash reserve account."

Cape Breton University political scientist Tom Urbaniak, author of Her Worship, a biography of Ms. McCallion, observes that although he was formally the city's top bureaucrat, Mr. O'Brien functioned more like a political chief of staff for the mayor, who famously maintains a skeleton staff in her own office.

Very few Mississauga civil servants had the courage to "speak truth to power," added Prof. Urbaniak, noting that none of her top officials, including Mr. O'Brien, advised her to steer clear of a land deal involving her son.

Other municipal government watchers wonder why Ms. McCallion felt it was appropriate to ask Mr. O'Brien to work out the legal settlement. As University of Western Ontario municipal governance expert Andrew Santcon says, "If someone's going to be an emissary of the mayor, they have to have some kind of formal status." He said he couldn't recall a similar situation in any other municipality.

Special to The Globe and Mail