The Ontario Municipal Elections Act, 1996, S.O. 1996, ch. 32 is meant to not only maintain electoral fairness and transparency, but to ensure that any activities undertaken by candidates – and their support staff or volunteer network – do not unfairly influence the election or confer an unfair advantage on the candidate. To that end, the Act requires candidates to provide, in detail, information about their finances (including spending totals, contributions, specific expenses, and the resulting surplus or deficit); as well as their backers, including names of contributors and the inventories of goods and materials contributed. Candidates are expected to provide this information truthfully and in full, and the Act allows for a process whereby the veracity and accuracy of a candidate’s reports can be assessed and confirmed by a Compliance Audit Committee.
The authors of this analysis were recently involved in what they understand to have been the only completed prosecution under the Act related to election campaign financing issues arising out of the 2010 municipal election. At the conclusion of that process, Coun. Doug Dickerson of the City of Pickering pleaded guilty to a charge of filing incorrect financial statements and a charge of exceeding his spending limit, and was fined a total of $17,500.00, plus the mandatory Victim Fine Surcharge, for the violations. This paper will outline the process – beginning with the application to the Compliance Audit Committee of the City of Pickering for an audit of Mr. Dickerson’s financial statements, and ending with the above-noted plea – and will discuss some of the shortcomings in the underlying statutory regime that complicated both the compliance audit process and the prosecution of Mr. Dickerson.
Interspersed throughout the paper will be references to and analysis of the law of municipal elections enforcement as it relates to the steps taken in this specific case. Finally, this analysis will briefly discuss some lessons learned from Mr. Dickerson’s prosecution, and how the process can be improved and refined moving forward, in the future.
Overview
Before moving into a discussion of the specifics, this paper will briefly outline the steps in the prosecution of offences under the Act. There are two broad steps: the compliance audit and the prosecution itself.
The compliance audit consists of three main parts: the application; the appeal (if necessary); and the decision to prosecute. A compliance audit committee – a statutorily-mandated body established by a municipality for the purposes of the Act – hears applications from any elector for compliance audits of any candidate’s financial statements. The committee’s role is to decide whether to order a compliance audit on the basis of the application, or to deny the elector’s application and its decision can be appealed to the Ontario Court of Justice by either the elector or the candidate in question. If the committee, or the Court, orders the audit, the committee’s final role is to decide, on the basis of the resulting report, whether to commence legal proceedings against the candidate.
At this point the process moves into its second broad step; in deciding to prosecute the candidate, the committee appoints an independent prosecutor. The prosecutor’s role consists of five main parts: the determination of whether reasonable and probable grounds exist to believe that the candidate committed offences under the Act; the determination of whether there is a reasonable prospect of conviction on those charges; the laying of charges; the crown and judicial pre-trials; and finally the trial itself. The first and second of these steps were of most concern to the authors of this analysis.
The compliance audit
As noted above, the compliance audit process has three main parts. This section will outline what happened at each of these steps in Mr. Dickerson’s prosecution. The Act mandates the establishment of a compliance audit committee in order to fulfill the obligations outlined in section 81 of the Act. Subsection 81(1) of the Act provides that:
81. (1) An elector who is entitled to vote in an election and believes on reasonable grounds that a candidate has contravened a provision of this Act relating to election campaign finances may apply for a compliance audit of the candidate’s election campaign finances.
On May 18, 2011, the Committee reviewed applications brought by three electors – David Steele, Ian Cummings and Jolanta Duszak – requesting a compliance audit of Mr. Dickerson's election campaign finances.[1] In their application, the electors alleged, inter alia, that Mr. Dickerson's financial statements showed an excess of spending, and that Mr. Dickerson improperly classified certain items in his financial statements, as required by the Act.
Specifically, the applicants alleged that Mr. Dickerson filed an inaccurate financial statement on March 24, 2011. At the Committee’s May 18, 2011, meeting, one applicant specifically alleged that “It will be seen that Mr. Dickerson reports expenditure of $33,331.00 against allowable spending limit expenses of $19,154.20, an excess of $14,176.80.” Another applicant alleged that Mr. Dickerson purchased and personally retained “$14,954.00 of alcohol purchased from the L.C.B.O. with campaign contributions.” If proven, the inaccuracies in Mr. Dickerson’s financial statements would have constituted an offence pursuant to paragraph 92(5)(a) of the Act, and the excess spending would have been an offence pursuant to paragraph 92(5)(b) of the Act.
In its decision in Jackson v. Vaughan (City), the Ontario Court of Appeal held that the standard for granting a compliance audit application is very low – all that is required is that the applicant reasonably believed that there was a “single apparent contravention” of the Act. The Committee ordered the audit on these grounds, but Mr. Dickerson appealed the Committee’s decision to the OCJ pursuant to subsection 81(6) of the Act, which provides that:
81. (6) The decision of the committee may be appealed to the Ontario Court of Justice within 15 days after the decision is made and the court may make any decision the committee could have made.
At a meeting a week later, the Committee agreed that an auditor would not be engaged until after the appeal period had expired.
In this case, on December 21, 2011, Justice Bellefontaine of the OCJ dismissed Mr. Dickerson’s application, holding that the Committee had sufficient information before it to conclude that the applicants reasonably believed that there was an apparent contravention of the Act. At paragraph 18 of his decision, Justice Bellefontaine held that:
Mr. Dickerson's filed [financial report] was certified by his auditors to be correct and declared by Mr. Dickerson to be correct and shows a significant spending amount over the spending limit set by the municipal clerk which is sufficient to provide the reasonable grounds.[2]
Having had to defend its decision to order an audit of Mr. Dickerson’s financial reports, successfully represented by Ms. Johnson, the Committee engaged William Molson, a chartered accountant and licensed public accountant, to conduct the audit.[3]
For the purpose of this audit, Mr. Molson was “entitled to have access, at all reasonable hours, to all relevant books, papers, documents or things of the candidate and of the municipality or local board,” under subsection 81(12) of the Act. Together with the ability to summon any person to give evidence on oath or affirmation at the inquiry and the ability to require any person to “produce in evidence at the inquiry such documents and things as the person or body conducting the inquiry may specify,” Mr. Molson had broad and sweeping powers of access.[4]
Subsection 81(9) of the Act provides that:
81. (9) The auditor shall promptly conduct an audit of the candidate’s election campaign finances to determine whether he or she has complied with the provisions of this Act relating to election campaign finances and shall prepare a report outlining any apparent contravention by the candidate.
Put simply by Justice Lauwers at paragraph 137 of his decision in Jackson v. Vaughan (City): an audit pursuant to the Act is an investigation into whether there have been “apparent contraventions” of the election campaign finance rules.
Pursuant to subsection 81(10) of the Act, Mr. Molson was then required to submit his report to the candidate, the Council, the clerk with whom the candidate filed his or her nomination, and the applicants. In that report, Mr. Molson identified 22 “apparent contraventions” of the Act. Pursuant to subsection 81(14) of the Act, the Committee was required to hold a public meeting to consider Mr. Molson’s report. On June 6, 2012, the Committee held such a meeting, at which it was the Committee’s responsibility to determine whether to commence legal proceedings against Mr. Dickerson on the basis of the apparent contraventions detailed in Mr. Molson’s report.
At the June 6, 2012 meeting that involved submissions from Ms. Johnson on the statutory powers and responsibilities of the Committee, from Mr. Molson, from each of the three applicants and, finally, from Mr. Dickerson and his legal representative, the Committee decided to commence legal proceedings against Mr. Dickerson. After a July 5, 2012, meeting during which Ms. Johnson discussed the next steps with the Committee, the Committee met on July 18, 2012, and appointed Mr. Reiter as the independent prosecutor.
The prosecution of the charges
The standard that Mr. Molson was required to meet was whether there had been “any apparent contravention.”That was different from the standard that had to be met if charges were going to be laid and a prosecution initiated. To do that there had to be reasonable and probable grounds to believe that Councillor Dickerson had contravened the provision of the Act and thereby committed offences under the Act. As a result, we began at the outset of our inquiry by asking whether the material that Mr. Molson had collected was capable of grounding reasonable and probable grounds to believe that Mr. Dickerson had actually contravened the Act.
On receiving Mr. Molson’s material, we first asked whether the auditor’s material had been properly collected and whether we could review it. We were concerned because issues can arise when authorities rely on their inspection or audit powers to collect information after reasonable and probable grounds to believe that an offence has been committed exist. Specifically, our concern was if the material had been improperly collected, would we by reviewing it taint our investigation and any steps stemming therefrom. We framed the specific question as follows:
In order to appoint the auditor, the Committee had concluded that there were reasonable grounds to believe that there had been an apparent contravention. Given that this conclusion was reached (i.e. reasonable and probable grounds existed) before the auditor began his “audit” was he permitted to exercise inspection or audit powers, or ought he to have turned to a search warrant procedure.
Once we researched the point, we discovered that the issue had been addressed with clarity and finality in the above-noted decision of Jackson v. Vaughan (City). In that case, Justice Lauwers, as he then was, ran through the exact analysis with which we were concerned, and his Honour concluded that because the primary purpose of the audit was not the determination of penal liability, the full panoply of the accused’s Charter Right protections were not then engaged. Specifically, His Honour found in paragraph 137 that “…since the prosecution had not been initiated at the time of the audit, the conduct of the auditor was not as agent for the prosecutor, although ultimately the information obtained by the auditor would be transferred to the prosecutor.” As a result, we were able to receive and review Mr. Molson’s file, and from that review we were ultimately able to conclude that reasonable and probable grounds existed to believe that Councillor Dickerson had committed offences. This took us to the second part of the prosecution process, which was deciding whether there was a reasonable prospect of conviction.
Though we had reasonable and probable grounds to believe that offences had been committed, before we could lay charges we also had to satisfy ourselves that that there was a reasonable prospect of conviction related to each prospective charge. What this meant in practical terms was that in the course of our review of Mr. Molson’s file, we had to satisfy ourselves that the evidence on which our reasonable and probable grounds were founded, would also ultimately prove admissible in Court.
Unfortunately from our perspective, we determined that the bulk of the evidence which underlay the reasonable and probable grounds was not going to be admissible in Court. There were two reasons for that:
- The main inculpatory statement had been made by the Councillor himself, and it had been compelled pursuant to section 33 of the Public Inquiries Act, 2009. Because such statements are statutorily deemed inadmissible as against their maker, we couldn’t use them for the prosecution.
- The other relevant statement had been made by Mr. Dickerson’s spouse. However, the rule of spousal privilege, which holds that spouses cannot except in certain circumstances be compelled by the prosecution to testify against one another, prevented us from calling the Councillor’s spouse against him. Without calling her, we were left without a way to introduce her statement into evidence for the truth of its contents.
Since Mr. Molson’s file did not contain further sufficient admissible evidence, we had to look elsewhere.
During our review of the auditor’s material, we came across redacted portions of a Durham Regional Police Services file which indicated that there had been a parallel police investigation of Coun. Dickerson on related issues. Those file extracts indicated that the Councillor had provided the DRPS with an inculpatory and voluntary statement. With that, we approached the Councillor’s counsel and asked for consent to access the police file, including the statement. The request was denied. Facing a long civil motion to try to get production of and access to the DRPS file, we chose instead to obtain a search warrant pursuant to section 158 of the Provincial Offences Act. We prepared a full and frank Information to Obtain, and attended at the office of the justice of the peace, after which a warrant directed to the police was issued. We then contacted the DRPS who, on the strength of the warrant, prepared a copy of the complete file for production. We retrieved it shortly thereafter under the terms of the warrant.
The fruits of that search provided us with evidence that was substantively similar to the information contained in the auditor’s file. However, this evidence was admissible, which in turn gave us a reasonable prospect of conviction.
Without this parallel police investigation, and without the search warrant, we could not have proceeded with the prosecution. There would not have been sufficient admissible evidence, nor would there have been a reasonable prospect of conviction.
Offences under the Act are provincial offences governed by the POA. The laying of an information under the POA is to be done in front of a Justice of the Peace at Provincial Offences Court; however, interestingly, the Act requires that sentences be imposed by a Judge.[5] This meant that we had to transfer the information out of the POA court and into the criminal branch of the Ontario Court of Justice in a context where there is no statutory means of “electing up.” After conducting an involved review of the Act with the issuing Justice of the Peace and with court staff at both the Ontario Court of Justice, Criminal and Provincial Offences Courts, we were ultimately able to have summonses issued which were returnable in the Ontario Court of Justice, criminal court.
The next steps in the process of prosecuting offences under the Act were the Crown pre-trial and judicial pre-trial. In this case there were two judicial pre-trials, but given the settlement privilege that attaches to these pre-trials, we cannot discuss what occurred. Suffice it to say that on July 19, 2013, Mr. Dickerson appeared before a judge of the Ontario Court of Justice and entered a guilty plea to the two counts on which he was ultimately convicted. The particulars of the first of those charges (filing an incorrect financial statement) included wrongly classifying an $11,550.00 gift that the Councillor had made to his common-law spouse as salary, and wrongly classifying $14,594.00 in alcohol purchases as voting day party expenses. The second of the charges related to his exceeding of his spending limit. The potential penalties for these offences under the Act vary, but the general financial penalty for any single offence under the Act is a fine of not more than $25,000.00.
Although it was arguable in this case that Mr. Dickerson’s overspending (the second charge) resulted from an honest mistake, it was not as clear with respect to the inaccuracies and mischaracterizations connected to the first charge. If, in fact, the purpose of municipal election campaign finance rules is to ensure transparency, for the sake of both fairness and accountability, this kind of conduct – be it as a result of incompetence or unscrupulousness – significantly decreases the ability of electors to hold their elected candidates to account. Given that, Mr. Dickerson was fined $17,000.00 for the mischaracterization offence, which we understand is the highest fine in the history of municipal election campaign finance enforcement, and, because of the less morally culpable nature of the overspend offence, Mr. Dickerson was fined $500.00 on that charge. Both fines were imposed following the presentation of a joint submission.
Conclusions and lessons learned
Despite significant evidentiary and procedural obstacles along the way, we were able to conclude the only successful prosecution of offences arising from the 2010 municipal election. However, the evidentiary and procedural obstacles will continue to complicate the process of prosecuting Municipal Elections Act, 1996 offences because they stem from the Act itself. Limitations on auditors’ abilities to collect admissible evidence and procedural hurdles resulting from statutory gaps will not go away, and those involved in audits and prosecutions will always have to be alert to the need for “work-arounds” until some kind of reform takes place.
In our view, the main lesson to be taken away from our experience is that auditors must be aware from the beginning of their audit that the information they gather could end up comprising a significant portion of an evidentiary record for a resulting prosecution, and that if that information ultimately proves inadmissible, the auditor’s work may ultimately prove to be for naught. As a result, auditors should try to focus not only on collecting statements, but also on gathering as much real evidence (i.e. documentary evidence) from persons other than the Councillor, so that reliable and ultimately admissible evidence is available.
As the law surrounding the administration and enforcement of municipal elections remains a work in progress, and continues to be honed and shaped, the analysis and recommendations contained herein hopefully will assist future enforcement action, and the issues identified herein will inform the development of the landscape of future municipal political enforcement.
About the authors
David Reiter and Jody E. Johnson are partners with Aird & Berlis LLP, a CBA Partner firm.
End Notes
[1] 2010 ONCA 118 (O.N.C.A.).
[2] Dickerson v. Compliance Audit Committee of the City of Pickering (Unreported: O.C.J., December 21, 2011, Court File No. 2811999) at paragraph 18.
[3] Pursuant to subsection 81(7) of the Act, only auditors licensed under the Public Accounting Act, 2004, S.O. 2004, ch. 8. are allowed to be appointed.
[4] The Auditor is also granted powers as set out in Part II of the Public Inquiries Act, 2009, S.O. 2009, ch. 33, sch. 6.
[5] See subsections 91(2), 92(6), and paragraph 94.1(1) (4) of the Act. Essentially, a “presiding judge” must be able to determine whether the candidate, acting in good faith, committed the offence inadvertently or because of an error in judgment; if the judge so finds, the penalties described in subsection 80(2) of the Act do not apply.