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Toronto city councillor Giorgio Mammoliti attends a committee meeting at City Hall on Feb. 15, 2013.

Chris Young/The Globe and Mail

Giorgio Mammoliti says loans he received from real-estate investors did not conflict with his duties as a councillor – a stance with which several of his city hall colleagues seem to disagree.

In a statement released Friday, Mr. Mammoliti wrote, "The loans issued were of a personal business matter involving a company owned and operated by my now ex-wife and the repayment of such loans have been dealt with as part of our divorce, which is still ongoing."

Mr. Mammoliti issued the statement following a CBC report that said he received approximately $275,000 in loans from a pair of real-estate investors. Mr. Mammoliti had earlier helped the investors get permission to put up billboards next to Highway 401.

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CBC reported this week that Motilal Champsee got permission for two signs on the roof of and behind a building he owned at 1881 Wilson Ave. He later lent $200,000 to companies owned by Mr. Mammoliti and his wife in 2007. The money was provided by a company called Tradesea International, according to CBC.

Mr. Mammoliti's divorce application, dated May, 2012, – viewed by The Globe and Mail – states he and his ex-wife were to pay debts to lenders, including Tradesea International Limited and Remax, using the proceeds from the sale of their home.

The Tradesea debt was secured through a second mortgage on the couple's home, according to the couple's 2011 separation agreement.

At a November, 2009, meeting, Etobicoke York Community Council considered two items for signs at 1881 Wilson Ave. and 1885 Wilson Ave., which are currently owned by Ralph Nardi. According to Mr. Mammoliti's separation agreement, the couple owed Mr. Nardi approximately $75,000. Mr. Nardi is described online as " the Broker of Record and owner of RE/MAX 2000 Inc. Brokerage."

Mr. Mammoliti's divorce application says the couple borrowed $75,000 from Remax.

Loans for councillors are not prohibited and some have said there should be a discussion on whether such loans need to be disclosed.

Mr. Mammoliti touched on that in his statement: "There was clearly no conflict in my dealings on this matter as a councillor."

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"While I accept challenges about my decision-making as a councillor, to blatantly issue a story that has no relevance to my job and involves my family and personal relationships I find to be in very poor taste," the statement said.

Mayor Rob Ford said Friday the situation with Mr. Mammoliti is "unfortunate." He said he doesn't condone such behaviour but still has to speak with the councillor.

When asked if he would take out loans in a similar way, the mayor said, "Ridiculous. I don't work that way."

Doug Holyday, the deputy mayor, said the optics of the situation are terrible. Mr. Holyday raised concerns about the billboards at a 2009 meeting. He said he was perplexed as to why councillors would go against staff recommendations and allow the billboards to be put up.

Adam Vaughan said Mr. Mammoliti is operating "under a cloud" and needs to fully disclose his financial dealings with people who have had applications in front of the city.

"I'd like to understand the allegations a bit more, but I think it's something the integrity commissioner will have to take a look at," Mr. Vaughan said.

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Last week, a compliance audit committee voted to commence legal proceedings against Mr. Mammoliti after an audit found he exceeded his 2010 campaign spending limit by more than 40 per cent.

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