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Opening comments:  More at the end.

And we should be surprised ???????

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Toronto Star - Jun. 28, 2010 - By Phinjo Gombu Urban Affairs Reporter.

Cost of Mississauga judicial inquiry almost doubles to $5 million
City council to receive request for added cost on Monday as closing submissions blame former city manager

Mississauga council is being told the cost of an ongoing judicial inquiry has almost doubled to $5 million as the first phase of the inquiry wrapped up Monday with closing arguments.

“The time and cost estimates will be exceeded,” says a staff report that comes before council on Wednesday.  “At this time it is not possible to provide council with a proper estimate of either of these matters.”  Council had approved costs of $2.5 million.

The additional cost, which includes the legal fees for Mayor Hazel McCallion and her son Peter McCallion will be paid from a reserve fund for labour settlements and an insurance reserve fund.

A breakdown of the $1.5 million that has been billed so far by the inquiry shows about $1 million has gone toward a forensic investigative firm and the law firm hired to help Mr. Justice Douglas Cunningham conduct the council-ordered inquiry.

The first phase of the inquiry has looked at how a negative veto for a minority shareholder in the city’s utility Enersource was inserted at the last minute without council knowledge or approval.

Council approved the original deal, without the veto clause, on Nov. 29, 2000.  The veto requested by the 10 per cent minority shareholder, the Ontario Municipal Employees Retirement System (OMERS), was inserted five days later, and McCallion signed the agreement two days after that.  She said she did not read it because she was relying on the expertise of staff and legal help to ensure it was okay.

The second phase of the inquiry will probe a more recent land sale involving OMERS and a company associated with McCallion’s oldest son Peter McCallion, as well as the mayor’s role.  It starts July 5 and will be heard intermittently through the summer.

In closing submissions posted online, lawyers for Mississauga said former city manager David O’Brien, who negotiated the deal with OMERS and an external lawyer Bill Houston, hired by the city to finalize it, should have formally informed council about the changes.

“Mr. O’Brien exceeded this authority by failing to bring back to City Council for its ratification important changes that were made to the final agreement … including the changes that added the negative veto,” the city said in its submission.

“There may have been proper business reasons for this, however, when these changes appeared at the very last second, it raised issues about their propriety,” the city said in its brief.

Both the city and OMERS have told Cunningham there was no impropriety by the giant pension fund on how the deal was negotiated or how the veto was inserted. The question is about the role of O’Brien and Houston telling council about it.

O’Brien did not make any closing submissions but Houston’s lawyer said he was not responsible for communicating with council, something that was under the purview of O’Brien — from whom he took orders.

Houston’s lawyer also argued the veto, about which he was supposed to provide advice, was not a legal issue but a business issue.

Mayor McCallion’s lawyer said the mayor has done no wrong and was entitled to rely on senior staff and external lawyers to review the deal and inform her and council before she signed it.

“It would be unreasonable to assume or recommend that the mayor or clerk or councillors should proofread complex commercial contracts brought to them for approval or signature.”

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