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Was Ford bash a campaign event or a fundraiser?

Rob Ford prepares to address the media outside his Etobicoke campaign office on Oct. 24, 2010.

Jennifer Roberts for The Globe and Mail/jennifer roberts The Globe and Mail

In the week prior to the launch of Rob Ford's mayoral bid, the outspoken Etobicoke councillor distributed recipe-card-sized invitations to a "complimentary" wine and cheese at the Toronto Congress Centre, set for March 26. The cards, some sent in Mr. Ford's council office envelopes and obtained by The Globe and Mail, made no mention of a mayoral run or any kind of fundraising activity. The event was billed as an opportunity to celebrate his 10 years of public service.

The event, of course, turned out to be the splashy kick-off for Mr. Ford's campaign. Thousands of well-wishers listened as a parade of speakers sung his praises. Among them was Mr. Ford's designated fundraiser Stephen Sparling, who told the crowd that the run would be "a big-budget campaign" and urged them not just to volunteer but also to contribute cash using cheques, credit cards or debit cards at sign-up tables near the door.

"You've been around politics and you know the kinds of things you have to do," he said, adding, "One thing I can tell you, as chair on the fundraising side, is that this is going to be a fiscally-run campaign."

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The question is, was the complimentary wine and cheese party that night a campaign event or a fundraiser?

Ontario election law limits what municipal politicians can spend on their campaigns – for Toronto mayoral aspirants, the number is $1.305-million. But the rules also permit candidates to exclude costs associated with mounting fundraising events and activities. Yet the exemption only applies to functions that are specifically billed as fundraisers, says the candidate handbook prepared by the Ontario government. "Campaign events at which incidental fundraising takes place do not qualify as fundraising functions."

As Mr. Ford's campaign filings reveal, the Congress party cost $34,371.72, with some of the upfront costs covered by a family-owned holding company. The event, in turn, yielded $7,905 in donations, not much by fundraising standards. The budget, however, has been excluded from Mr. Ford's total campaign spending of $1.288-million, according to spread sheets posted to the city's election website.

Municipal election experts like York University's Robert MacDermid describe the existing rules as "vague" and encourage candidates of all political stripes to exempt a wide array of ordinary campaign expenses from the spending caps.

The provincial government recently moved to tighten the regulations, but questions raised about Mr. Ford's campaign finances suggest the policy is still open to interpretation, as are the city's own rules banning corporate and trade union contributions. Toronto residents have filed three requests for compliance requests, all of them questioning money leant to the campaign from family firm Doug Ford Holdings Inc., whether it was paid back or whether it, in effect, was a corporate donation.

Mr. Ford's lawyer Thomas Barlow said Friday that his client adhered to all the rules and promised to file a response to the allegations contained in the compliance audit requests by this Wednesday.

Mr. Ford and his rivals all held numerous campaign and fundraising events during the course of race.

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Campaign filings show George Smitherman held 51 fundraisers, all of which required attendees to purchase tickets. Joe Pantalone held 18 ticketed fundraising events and Sarah Thompson, who had no municipal election experience coming into the race, hosted 11. Rocco Rossi's campaign organized 42 ticketed fundraisers, as well as three that incurred no costs and generated no ticket sales, and another three that didn't involve tickets but yielded $2,670.43 in expenditures.

Fundraisers are typically distinguished by the fact that attendees pay to get in. "In most cases there were not tickets, per se," John Laschinger, Mr. Pantalone's campaign manager, said in an e-mail. "People were asked to contribute a certain amount, whether it be $500, $100, $50 etc."

Mr. Ford, who had run in three previous municipal campaigns prior to his mayoral bid, listed 19 fundraising events in his campaign disclosures. Of these, 11 involved no ticket revenue. For example, with three "Ford Fests," held in August and September, the campaign promoted the events as "backyard fundraisers" with free admission and donations welcome at the door.

Perhaps because many of them were free, Mr. Ford's 19 fundraising events generated $210,230 in ticket sales revenue and $51,992.07 in cash donations, but cost $294,548.49, for a net loss of more than $32,000. (The bulk of the total revenue raised – almost $500,000 – came from direct mail and phone solicitations.)

By contrast, the fundraiser events held by Mr. Rossi, Mr. Pantalone and Mr. Smitherman generated profits, according to campaign disclosure documents. Indeed, Mr. Pantalone raised about $5 for every dollar he spent hosting such events.

Mr. Smitherman's campaign, for its part, spent $312,615.90 to bring in $1.39-million from its fundraising events. The campaign filings exclude from the spending limit fundraising expenses such as printing, fundraiser telephone and office outlays, direct mail, and fundraiser co-ordination.

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The mayor ended the campaign with a $700,000 debt, which was retired at a multi-candidate fundraising event in January. The compliance-audit request filed last week by residents Max Reed and Adam Chaleff-Freudenthaler alleges that Mr. Ford's campaign suffered from cash flow problems early in the race.

The other election finance policy question posed by Mr. Ford's campaign involves the definition of what, precisely, constitutes a corporate contribution.

The City of Toronto bans corporate donations, including in-kind contributions. Provincial rules, in turn, specify that candidates must pay market rates for campaign materials and services, or recognize discounts as contributions.

In Mr. Ford's case, the campaign procured $150,000 of materials and services from the family-owned printing company Deco Labels and Tags, of which he is a shareholder. The campaign also paid $1,000 a month in rent for office space for its headquarters in a suite in a Deco-owned building on Greensboro Drive in Etobicoke. What's not clear from the campaign filings is whether Mr. Ford's team paid Deco prevailing market rates or sought competitive quotes from other suppliers.

Yet the bylaw banning corporate and trade union donations, enacted in 2009 by city council, doesn't explain how candidates for public office should deal with situations involving non-arm's-length purchases by their campaigns.

None of the requests for audits of Mr. Ford's campaign question these outlays. The compliance audit committee is scheduled to reconvene this Friday.

Special to The Globe and Mail

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