er ommissioner Integrity Commissioner's Office 375 University Avenue, Suite 202 Tel: 416-397-7770 Toronto, Ontario Fax: 416-6963615 M5G 2J5 jleiper@toronto.ca toronto.calintegrity/indexhtm MEMORANDUM DATE: May 9, 2013 TO: Mayor Rob Ford City of Toronto Councillors FROM: Janet Leiper Integrity Commissioner RE: Integrity Commissioner Interpretation Bulletin Legal Fees Incurred By Members of Council Not Covered By The City Dear Members of Council, The question of legal fees incurred by Councillors has arisen from time to time. Please find attached an interpretation bulletin and chart for your assistance. I wish to acknowledge the invaluable assistance of staff from the City Clerk's office and the office of the City Solicitor in preparing the information in Attachment 1. Yosr Jane Leiper lnteg 'ty Commissioner c. Ulli S. Watkiss, City Clerk Anna Kinastowski, City Solicitor Integrity Commissioner Interpretation Bulletin Legal Fees Incurred by Members of Council not covered by the City Introduction Members of Council have asked in the past about how they can pay legal fees which are not subject to the City of Toronto indemnification policy or payable by the City. [See Attachment 1 for legal fees payable by the City] Members have asked whether it is an improper gift or benefit under the Code of Conduct for Members of Council ("Code of Conduct") if other people contribute to a member's legal fees. This interpretation bulletin is intended to assist members of Council who may have incurred legal fees. Article IV of the Code of Conduct: Gifts and Benefits The City of Toronto has a "no gifts or benefits" rule unless the gift falls into one of the specific exceptions in Article IV. The Code of Conduct does not have any exception for a public official to receive funds from a member of the public to help pay for the member's legal fees. A copy of Article IV is attached to this bulletin for ease of reference. This means that when it comes to defraying legal expenses that are not covered by the City, members of Council may not hold public fundraisers, use the resources of their offices to seek contributions, or receive contributions for this purpose from members of the public, lobbyists, clients of lobbyists, developers, community groups, union leaders, corporations or businesses who are hoping to do business with the city. Members of Council should refrain from speaking about their debts while acting in a public capacity to avoid the impression that they are asking the public at large for a gift or benefit. Private Contributions In the case of legal fees that are not covered by the City of Toronto, the Code of Conduct is not intended to apply to private arrangements for contributions. A member of Council in his or her private life may have relatives and friends who are able and willing to help defray the costs of legal proceedings. This is consistent with past advice from the Office of the lnteqritv Commissioner and continues to be the position of the office. The question of whether or not a contribution is from a "private" source rather than a public source is a question of fact. Integrity Commissioner interpretation Bulletin - May 2013 Examples may include a close relative (so long as that relative is not a lobbyist or othenivise excluded) or a long time family friend. Members are advised to err on the side of caution and decline to accept doubtful contributions from persons who might want to do business with the City. Members are also advised to keep careful records of the source, nature of the relationship to the contributor and the sums received to enable them to satisfy, if required, concerns about compliance with the Code of Conduct. Members are encouraged to consult with the Integrity Commissioner for confidential advice on this question. Finally, this bulletin does not cover all other laws that may apply to members of Council who receive loans, donations or benefits. As set out in the Code of Conduct, members are expected to be aware of the provisions of the Municipal Elections Act and other pro ia or federal statutes that may apply in those circumstances. Janet eiper lntegri Commissioner 416~397-7770 Attachments: Attachment No. 1 - Members of Council and Legal Fees Attachment No. 2 -- Article IV (Gifts and Benefits) of the Code of Conduct for Members of Council Integrity Commissioner Interpretation Bulletin - May 2013 Attachment 1 -- Members of Council and Legal Fees Integrity Commissioner Interpretation Bulletin - May 2013 Role Issue Example Funding Referencelcontact . City of Toronto Insurance Risk glembeir of l_egal Fees Irelated to gity Efxpensetu Management Policy Manual Gum" as 'n.SUranc.e 0 Own financel Member of director liability, insurance Policy df/irm mama' df . .9 Council defamation or human rights tribunal cases Contact: Jeff Madeley, Manager, Insurance and Risk Mgmt, 2-6301 Fees for Fol. City CC13.4 "Appeals of Access Decisions in requests for Councillor Council General Relation to Councillor Records and records Expense Budget Retention of Outside Counsel' approved by City Council at its meeting on October 21, 2011 Contact: Susan Campbell, Manager, Access and Privacy, 5-7383 Legal Eeeis for Integrity City Expense EX21 9 "Policy Changes to Facilitate Commissioner formal or Councillor Counwlor office approved by informal investigations Constituency City Council at its meeting on July 11' 12 Services and and 13 2012 Omce Budget izficii Contact: Winnie Li, Director, Council and Support Services, 2-8676 Legal Fees for Criminal City Expense -- EX22.8, "Review of Indemnification Policy or Civil Cases when Council General for Members of Council", approved by City found not guilty or not Expense Budget Council at its meeting on July 15, 16 and liable, or Municipal 17, 2008. conflict of interest cases where member emnificationpdf Contact: Anna Kinastowski, City Solicitor, 416- 392-0080 Member of Campaign related Campaign Compliance with all requirements of Council as issues within campaign Expense Municipal Elections Act. gandidate penod Contact: Bonita Pietrangelo, Director, Elections and Registry Services, 416--392-801 9 Candidates must comply with the requirements of the Municipal Elections Contmvefied emetic" Act. Depending on_timing of events, they 2:2" use surplus from the campaign or the courts could award costs. Role Issue Example Funding Referencelcontact After the campaign period, these are individual costs and no longer candidate costs. Contact: Bonita Pietrangelo, Director, Elections and Registry Services. 416-392-8019 Member of Conflict of Interest Personal Cannot fundraise. Personal contributions Council as consultations or legal expense from friends or relatives may be permitted an fees related to conflict of in limited circumstances. Consult with the individual interest legal Integrity Commissioner. proceedings and . . . . appeals if member is not Leiper, Integrity Commissioner, successful Legal fees related to City Councillor may apply for reimbursement conflict of interest legal Indemnification under the City's Indemnification Policy if proceedings and Policy or there is finding of no contravention. See appeals if member is Personal section above. successful. expense Cannot fundraise. Personal contributions from friends or relatives may be permitted under limited circumstances.. Consult with Integrity Commissioner. Contact: Janet Leiper, Integrity Commissioner, 418-397-7770 integrity Commissioner Interpretation Bulletin -- May 2013 Attachment No. 2 Code of Conduct for Members of Council IV. GIFTS AND BENEFITS No member shall accept a fee, advance, gift or personal benefit that is connected directly or indirectly with the performance of his or her duties of office, unless permitted by the exceptions listed below. For these purposes, a fee or advance paid to or a gift or benefit provided with the member's knowledge to a member's spouse, child, or parent, or to a member's staff that is connected directly or indirectly to the performance of the member's duties is deemed to be a gift to that member. The following are recognized as exceptions: compensation authorized by law; such gifts or benefits that normally accompany the responsibilities of office and are received as an incident of protocol or social obligation; a political contribution otherwise reported by law, in the case of members running for office; services provided without compensation by persons volunteering their time; a suitable memento of a function honouring the member; food, lodging, transportation and entertainment provided by provincial, regional and local governments or political subdivisions of them, by the Federal government or by a foreign government within a foreign country, or by a conference, seminar or event organizer where the member is either speaking or attending in an official capacity; food and beverages consumed at banquets, receptions or similar events, if: 1. attendance serves a legitimate business purpose; 2. the person extending the invitation or a representative of the organization is in attendance; and 3. the value is reasonable and the invitations infrequent; communication to the offices of a member, including subscriptions to newspapers and periodicals; and sponsorships and donations for community events organized or run by a member or a third party on behalf of a member, subject to the limitations set out in the Policy on Council Member--Organized Community Events; Except for category (political contributions allowable by law), these exceptions do not apply where such gifts or benefits are provided by lobbyists or their clients or employers (as defined or described in Municipal Code Chapter 140, Lobbying). For these purposes, a lobbyist is an individual, organization or business that: Integrity Commissioner Interpretation Bulletin -- May 2013 is lobbying or causing the lobbying of any public office holder at the City, a local board (restricted definition) or the board of health; [ii] the member knows is intending to lobby, having submitted or intending to submit a registration to the Lobbyist Registrar for approval to communicate on a subject matter; or is maintaining an active lobbyist registration with the City even though not having a current active subject matter registered with the lobbyist registry. In the case of categories and if the value of the gift or benefit exceeds $300, or if the total value received from any one source during the course of a calendar year exceeds $300, the member shall within 30 days of receipt of the gift or reaching the annual limit, file a disclosure statement with the Integrity Commissioner. The disclosure statement must indicate: the nature of the gift or benefit; its source and date of receipt; the circumstances under which it was given or received; its estimated value; what the recipient intends to do with any gift; and whether any gift will at any point be left with the City. Any disclosure statement will be a matter of public record. On receiving a disclosure statement, the Integrity Commissioner shall examine it to ascertain whether the receipt of the gift or benefit might, in her or his opinion, create a conflict between a private interest and the public duty of the member. In the event that - the Integrity Commissioner makes that preliminary determination, he or she shall call upon the member to justify receipt of the gift or benefit. Should the integrity Commissioner determine that receipt was inappropriate, he or she may direct the member to return the gift, reimburse the donor for the value of any gift or benefit already consumed, or forfeit the gift or remit the value of any gift or benefit already consumed to the City. Except in the case of categories and a member may not accept a gift or benefit worth in excess of $500 or gifts and benefits from one source during a calendar year worth in excess of $500. Integrity Commissioner Interpretation Bulletin -- May 2013