Campaign audits must be conducted in the public interest, three audit subjects say after the City of
Ottawa spent more than $450,000
to probe their election expenses.
Candidates
Shawn Menard
and
Doug Thompson
and third-party advertiser Horizon Ottawa were all audited for their 2022 municipal campaign spending after Edward “Ted” Phillips, a retired Taggart executive, filed an application for a financial review of their election expenses. All three have expressed opposition to Tewin, a controversial proposal to build homes for up to 45,000 people on 445 hectares of land near Carlsbad Springs.
The external audits unearthed apparent contraventions under the campaign finance rules, but all three were still under the campaign spending limits. None of the three cases has been moved to the prosecution stage.
According to a memo from city clerk Caitlin Salter MacDonald to the members of council on Thursday, Menard’s external audit cost the city $59,470, Thompson’s cost $95,053 and Horizon Ottawa’s cost $35,363.
The city also spent $24,454 in committee costs such as Election Compliance Audit Committee members’ honoraria, per diems, parking and hospitality, with another $136,875 on external legal counsel, $3,401 on prosecutors and $101,554 on the city clerk’s review of contributions.
“Any taxpayer should be outraged that almost half a million dollars was spent on three audits that were not in the public interest,” said Sam Hersh, a Horizon Ottawa board member.
The Election Compliance Audit Committee, an independent body, decided to commence a legal proceedings against Horizon Ottawa on Aug. 28, 2024, and referred the matter to an independent prosecutor. On Sept. 25, the prosecutor advised that, in their opinion, it was “not in the public interest to prosecute any of the apparent contraventions identified.”
“We’re happy that this long, drawn-out stress process is over,” Hersh said Friday. “If there were any errors, they were made in good faith.”
The audit committee decided not to commence legal proceedings against Menard on Sept 9 after an audit found Menard, who won the election in Capital ward in 2022, had
understated his election sign expenses by $310.98
, including the costs of screws, zip ties and wooden stakes.
“All three of these minor error audits were brought by a former Taggart Development executive who cost the city a lot of time and money by going after people critical of their developments and Tewin in particular,” Menard said Friday. “Petty retribution and developer influence is alive and well in the City of Ottawa, unfortunately.”
The committee
decided not to commence legal proceedings against Thompson
on Sept. 16. He said he had used a placeholder value of $100 for signs used in the 2022 election and his campaign team intended to update that figure. The actual cost was $244.60.
In Horizon Ottawa’s case,
the issue was HorizonFest
, a music festival in Strathcona Park on Sept. 10, 2022, with speakers that included candidates Menard and Ariel Troster.
Phillips’ lawyer, John Pappas, argued that promotion for the event began before Horizon registered as a third-party advertiser for the election and that Horizon started to spend money on HorizonFest before registering as a third-party advertiser.
Lawyer Kyle Morrow, who represented Horizon, suggested that the application was “nothing more than a fishing expedition designed to silence and intimidate those who disagree with the complainant politically and furthermore to impose on the taxpayer an unnecessary financial burden for an unnecessary audit.”
Under Ontario’s Municipal Elections Act,
every municipality must appoint a compliance audit committee
responsible for reviewing and making decisions on all applications for campaign finance audits. Any resident eligible to vote in the election may apply for a compliance audit if they believe a candidate has contravened election finance rules.
Thompson said his concern was the process used by the city in these cases. Thompson said he was astonished at the $95,000-plus cost of his audit. It cost him only $3,000 to have a chartered accountant review his spending statement.
“I can suggest better use of this kind of money,” said Thompson, a former city councillor who did not win in Osgoode ward in 2022. He wants the city to review the role of the audit committee and to permit some discretion before moving forward to ensure that audits are in the public interest.
“The integrity of elections is very important, but so is the integrity of candidates,” Thompson said.
Horizon Ottawa is also calling on city council for a review and for clearer third-party advertiser guidelines.
The advocacy group had an annual budget of between $130,000 and $140,000 last year and spent about $10,000 of that amount on lawyers because of the audit, said Hersh, who said he was concerned that the audit process could put a chill on registering as third-party advertisers in future elections and that potential candidates might also shy away from running,
Transparency is important, but it must be balanced against the cost to residents and from acting as a deterrent to people who want to run, Menard said.
“Ontario and the municipality should be reviewing ways to ensure that typos or minor errors can be dealt with in a more reasonable way than a full-scale audit or court action,” he said.
Pappas did not respond to a request for comment. In 2023, Pappas said Phillips had been retired for three years and the applications were filed in a personal capacity.
