THE DEMOCRATIC REPORTER
Pages of Special Interest;
Other Table of Contents;
Scanned, recopied or Internet copy, if there are errors, please e-mail me with corrections:
Opening comments: More at the end.
Tony Miele has been a very talked about member of the Harris-ment government, in fact his name and words or terms like "land flip", "scandal at the Ontario Realty Corp.", "criminal investigation", "police are investigating", "taxpayers were bilked", "shady deals", "audit", "taxpayers swindled", "stench", "bid-rigging", "evidence" and "wrongdoing or criminal behaviour in the ORC", are often heard in the same sentence or story about the Ontario Realty Corp, which he leads.
ONTARIO REALTY CORP
Mr Dalton McGuinty (Leader of the Opposition): My question is for the Premier. We believe in open, honest and accountable government, and that's why we are so appalled by the recent cover-up of the scandal at the Ontario Realty Corp. Auditors there have been telling us that taxpayers have been ripped off, and now we learn that the police have been called in to conduct a criminal investigation.
Premier, can you explain to us why the minister responsible and the president of the ORC have not been forced to resign?
Hon Michael D. Harris (Premier): I think the member knows that this government takes any allegation of wrongdoing very seriously. That is why the Chair of Management Board, the Honourable Chris Hodgson, has fully supported the recent steps taken by the ORC board and the CEO to independently audit ORC sale transactions dating back through two full real estate market cycles to 1985.
I might say that at the outset of the expanded audit process, the minister clearly stated his expectation that any indication of any wrongdoing uncovered by the audit would be forwarded to legal authorities. On Wednesday of last week, I understand that audit staff met with the Assistant Deputy Attorney General, as is the practice, and the criminal law division to review certain questionable elements related to a small, but concerning, number of past ORC transactions. So that's where the matter lies. I think the minister has taken the appropriate action.
Mr McGuinty: Premier, what this really boils down to is an issue of ministerial, and indeed first ministerial, responsibility. That's what this is all about. You've brought in the police, and the auditors are in there. But what the Ontario public expects and demands is that you and your minister accept responsibility for what has gone on at the ORC.
We're talking, in one case, about a land flip. Land was originally purchased at $1.25 million and sold a week later for just under $4 million. Premier, that happened on your watch. It happened on your minister's watch. None of these deals can get by without the specific approval of your minister.
Premier, either your minister did not know this was happening, or he was covering up. It seems to me that the responsible thing to do on your part today, Premier, is to ask for his resignation.
Hon Mr Harris: Clearly, allegations have been made. We need to look into whether these sales were handled properly, whether they were tendered properly, whether we got the best offers and whether the procedures the minister oversees were followed. That, in fact, is what the investigation is all about. We take these matters very seriously. Clearly, some sales occurred on our watch. I understand we have asked both the minister and the head of the ORC to take a good look at what has happened over the last 15 years. The goal: to uncover if indeed there is any wrongdoing. Now, as you know, the police are investigating as well. I think this is exactly what the public would want their minister to do.
Mr McGuinty: Five months ago, Premier, when we raised these issues in this Legislature, your minister said there wasn't anything wrong, that everything was okay. Five months ago we asked him to call in the police, and he refused. Now we discover that there have been a series of land flips which are hurting Ontario taxpayers. Now you decide you're going to bring in the police.
What we want you to do, Premier, is to accept responsibility. Responsibility has to stop inside your cabinet.
Here's a little reality check. Fact: For months, there have been questionable land deals costing taxpayers millions in lost revenue. You've now been in office for six years. Notice I said "in office," not "on the job." Fact as well: It's business as usual over at the ORC today. Another $200 million worth of new sales are still planned at this very time, Premier. Why have you not fired your minister, and why have you not frozen all land sales until both the police and the auditor have completed their investigations?
Hon Mr Harris: I guess if every transaction, every business dealing by every bureaucrat in every agency we are associated with and fund, if they did not require ministerial responsibility, we wouldn't have ministers. We do have ministers, we do have cabinet, we do have the Premier and we are all accountable. That is why, whenever anything untoward is brought to light, the minister immediately undertakes to look into it. It's no secret that Mr Miele - the minister brought in a new Chair and a new executive director to take a good look at the practices of the ORC. That was done by the minister, and, thank goodness, he's there overseeing it.
ONTARIO REALTY CORP
Mr Howard Hampton (Kenora-Rainy River): I have another question for the Premier. On Friday, the police were finally called in to investigate how taxpayers are being bilked at the Ontario Realty Corp. But while the police investigate, the minister who presided over this and the Conservative Party hired hand are still in place. This is unheard of.
Premier, you must recognize that in November 1998 this minister, Mr Hodgson, received a complaint from Jeff Lyons, the prominent Conservative fundraiser. Then, although Mr Hodgson denies involvement, a whole series of deals happened. The Keg Mansion property was cancelled. Someone named Tony Miele comes on to run the ORC. Then two more deals, a flip of land in Mississauga to Frank Gabriele and the sale of a warehouse at 145 Eastern Avenue in Toronto, both deals where taxpayers were bilked, happened under Mr Miele's supervision and Mr Hodgson's supervision.
The Speaker (Hon Gary Carr): Order. The time is up. Premier.
Hon Michael D. Harris (Premier): You've mentioned some transactions that in fact were not transactions, and no sales took place, so I don't know how anybody was bilked. Let me say that the individual who is the chair now, or the chief executive of the ORC, was hired by a new board brought in by this minister, a new chairman, new board members, approved by all of you unanimously, by all the Liberals and by all the NDP members, who said, "Yes, we need a new board." Those members-who were approved unanimously by all of you-elected, among themselves, a new chairman, Mr Mavrinac, a very respected former municipal politician in the province of Ontario. They went out and hired a new chairman, and agreed unanimously that this new chief executive officer they hired was in fact who they should put in place to try and take a look at all of-
The Speaker: Order. The Premier's time is up.
Mr Hampton: Premier, if there's going to be an investigation that gets to the bottom of this, the minister who presided over it and Tony Miele who presided over it have to go. If you won't make them go here, maybe under your new bill, you can go after their parents or something.
Look, this is just a case of a number of shady deals happening under Mr Hodgson's watch and happening under Mr Miele's watch. For you to say that there is an investigation that's going to get to the bottom of it, when the two people who presided over it and who are responsible for it continue to be there-it's absurd.
Premier, do the right thing. Mr Miele and Mr Hodgson have to step aside. They were in charge when a number of these shady deals happened. It shouldn't have taken them 15 months to call in the police when it was obvious from the beginning that something was wrong. Do the responsible thing. If this is going to be a good investigation and people are going to be held responsible-
The Speaker: Order. The member's time is up. Premier.
Hon Mr Harris: You are talking about the two very people who were the whistle-blowers, the two very people who called for the audits in the first place, the two very people who, using the appropriate chief executive and ministerial oversight, are getting to the bottom of it, the two people who are bringing this and shedding some light on what was going on there. Do we like it if there's inappropriate action? Of course not. But the chief executive officer and the ministerial responsibility is to bring these issues to light and bring in the appropriate investigation, and that's what's happening.
ONTARIO REALTY CORP
Mr Dalton McGuinty (Leader of the Opposition): This question is for the Premier. I believe that cabinet ministers should live up to a high standard of responsibility and unquestionable ethical behaviour. Apparently, you do not. We now know of three land flips in which taxpayers got ripped off for over $10 million. Two of those deals fell directly under the responsibility of the Chair of Management Board and in the case of the third one the irresponsibility is shared between the Minister of Transportation and the Chair of Management Board. We know that the police have been called in; we know that there is an internal audit being conducted at this time.
Premier, what I want to know is, do you not think that ministers responsible for losing millions of dollars, ministers under investigation, should at a minimum step down while the matter is under investigation?
Hon Michael D. Harris (Premier): Actually, I do. Since the minister is not under investigation there's absolutely no reason why the man who brought in the investigation and ordered the uncovering of what is going on should step down. In fact, we should thank the minister and thank our lucky stars he was there.
Mr McGuinty: Premier, I want to talk about your double standard. When a staff member of Minister Jim Wilson revealed confidential information, Wilson rightfully stepped aside. Bob Runciman also stepped aside when a matter affecting his ministry was under investigation. Steve Gilchrist, reluctantly but ultimately, did the right thing and stepped aside after the police were investigating him.
Premier, why the double standard? The precedent has been set when it comes to three prior ministers in your own government. Why is that Mr Hodgson finds himself in a special circumstance where you suddenly feel it is no longer the right thing to do for him to step aside pending the outcome of the investigation?
Hon Mr Harris: Certainly, neither the minister nor any of his staff is under any investigation. In fact, it is the minister himself who has brought sunshine to this matter. He has brought in the experts to take a look and, on the independent advice of the Ministry of the Attorney General, brought in the police to take a look. So the situations are in no way even close to being parallel. I might add this: that for any Liberal, provincial or federal, to talk about ethics or talk about standards is the height of hypocrisy.
The Speaker (Hon Gary Carr): I would ask the Premier to withdraw that word, please.
Hon Mr Harris: Yes, sir.
Mr McGuinty: Premier, the matter really is too serious for your introduction of bombast. What we're talking about here is the fact that nobody over there, the group sitting on the right hand of the Speaker, the members of the government, is prepared to accept responsibility for this mess. We're talking about the loss of over ten million taxpayer dollars. We're talking about a matter that is under police investigation. You tell me that the minister himself is not under police investigation. That is news. Have you talked to the police on that score, Premier? In that regard you might want to fill us in as well.
It's a matter that's under police investigation. We have an internal audit being conducted. We have a precedent set not only by your government but by others before that. When ministers or people in their ministry are the subject of investigation, police or otherwise, the right thing to do is to step aside. Premier, again I ask you: Why is it that Minister Hodgson is not doing the right thing in these circumstances? Why is he not, at a minimum, stepping aside pending the outcome of the investigation?
Hon Mr Harris: The member makes up protocols that I've never heard of, he's never heard of, have never been part of our government, have never been part of his government and have never been part of a Liberal government, I can tell you that, anywhere on this planet that I have ever seen.
You say taxpayers have lost money. We don't know if taxpayers have lost any money. What we know is this: There have been questions raised around some sales for which the minister and the chairman of the ORC have called for an investigation. That investigation is taking place; that independent audit is taking place. That is absolutely the appropriate action, and I'm very proud of the minister and the chair of the ORC for doing that.
ONTARIO REALTY CORP
Mr Howard Hampton (Kenora-Rainy River): My question is for the Chair of Management Board and it concerns the Ontario Realty Corp. This is a transcript from the trial relating to the Keg deal, cancelled by the Ontario Realty Corp at the last minute. It's a transcript from Joe Clasadonte, a marketing coordinator of the Ontario Realty Corp, who says on page 33 of his testimony, "Some time in the late fall or early in 1999, a directive came down that Tony Miele, who is now president or CEO of the ORC, was required to approve transactions, including the one that I was working on." Later on, on page 247, Mr Clasadonte says that he stopped preparing the legal documents for the deal because Tony Miele wanted to review the file.
Minister, do you still deny that Tony Miele had to approve all transactions at the Ontario Realty Corp as of December 1998 or early January 1999?
Hon Chris Hodgson (Chair of the Management Board of Cabinet): It's refreshing to hear the leader of the third party admit for the first time that there was no transaction on the Keg Mansion, because you keep repeating that there was. That's a positive sign, and I'm thankful for that.
The second question you raised is around the chair of the board and the board of directors of the Ontario Realty Corp and their delegating and asking Tony Miele to undertake some special projects. I believe the record is pretty clear on that. What you are talking about is before the courts, and that will come out in the fullness of time due to proper process.
Mr Hampton: No, Minister, this is about your credibility. I wonder how Mr Clasadonte got the impression, in late 1998, that all deals had to be reviewed by Mr Miele, your appointee. I wonder how he got the impression that what was happening on the Keg deal was in effect going to be stopped because of an order from Mr Miele, when you keep saying Mr Miele had nothing to do with this.
This is sworn testimony and what it amounts to is this: If Mr Miele was stopping this deal and if Mr Miele was reviewing all transactions, how is it that the government, the taxpayers of Ontario, got taken on the Gabriele deal and on the All-City Storage deal? How is it that those deals continued to go forward when there is clearly referred to in sworn testimony a memorandum that says that Mr Miele was supposed to review those deals? And if he did, why did they go forward, why were the taxpayers swindled and where were you and Mr Miele when you should have been performing your duty on behalf of taxpayers?
Hon Mr Hodgson: For a party that set up the Ontario Realty Corp, you are fully aware that there is a board of directors, which oversees the day-to-day operations and does the hiring of staff. So you would have to talk to the board of the ORC in relation to Mr Miele's contract and responsibilities. When you talk about All-City Storage, you're referring to 145 Eastern Avenue, which is part of the Ataratiri land. Surely you're not going to start defending the Liberal record on backing the city of Toronto's bid to buy that land for a housing project, which ended up costing the taxpayers of Ontario $340 million.
ONTARIO REALTY CORP
Mr Dalton McGuinty (Leader of the Opposition): My question is to the Chair of Management Board. In January 1998, the ORC advertised for sale some cemetery land located in Etobicoke. It wasn't worth that much because there was no way for vehicles to get to the vacant part of the lot at the back, so most bidders lost interest. But one bidder worked behind the scenes and struck a secret deal with the government. A strip of land was added to this original piece of land that would allow construction of a roadway extending to the back of the land, a roadway that makes the construction of a $25-million crematorium now possible.
Can you tell us today, Minister, what role you and your office played in secretly turning a cemetery into a gold mine for one bidder and one bidder alone?
Hon Chris Hodgson (Chair of the Management Board of Cabinet): I'm not aware of the details on that.
Mr McGuinty: I'm going to have a page who's conveniently right here take this over to the minister. Thank you, Marc.
I'm providing you, Minister, with a copy of a document we obtained through a freedom of information act request. One of these documents, the one I provided you with just now, you might want to call a smoking gun because it implicates you directly. It's a handwritten note from an ORC official which says, and I quote, "There has been ministerial involvement." Ministerial involvement-that's you, Minister-in a secret deal to turn a cemetery into a gold mine.
You've been telling us for weeks that you have nothing whatsoever to do with the day-to-day affairs of the ORC, that you do not get involved in the bids, that that is not your responsibility, that you're there to protect taxpayers. Can you tell us then, please, Minister, what does this ministerial involvement mean in this particular deal?
Hon Mr Hodgson: I'm not sure of the details around this, but from this note it could possibly mean that one of your caucus members has phoned and asked for information and that we've requested the ORC. It says here in your own note that they want to have a briefing, that John Bell, who was the president of the ORC at the time, has been asked to get some information to the minister's office. That must mean that somebody has made an MPP inquiry, or somebody has inquired about the status of the project. That's quite common. I get calls from your caucus members all the time asking about the status of a piece of property or a lease or a building. But I don't know the particulars on this, and I'd be pleased to look into it.
Mr McGuinty: There is no reference here to some kind of request or ministerial request. It says "ministerial involvement." It specifically says there has been ministerial involvement. What we're talking about here-and let's go back to the issue at hand-are two things. First of all, you said you don't get involved in these things. Secondly, we have a piece of property that was put out for public tender and, secretly, behind closed doors, the person who got the deal suddenly has added to it a strip of land, which increases the value of the property close to a hundredfold. We get some information from the freedom of information office, and they provide us with a note that says there has been ministerial involvement. This stench, Minister, is not going to go away. It's like a stink on an elevator that you just can't get rid of. It's there again and again.
Minister, when only one developer is given access to key information, when only one developer is told he can bid on additional land, as was the case here, and when a minister gets personally involved in a secret land deal, can you tell us how this is not bid-rigging?
Hon Mr Hodgson: The leader of the opposition, who is a lawyer, knows better than this. He's just trying to throw all the allegations and all the crap he can in the hope that some of it will stick. I'm pleased you have sent over some information that can be investigated. We will have this turned over to the internal and external auditors, and if there's evidence they'll refer it to the police. That's what we've done in past cases, and that's what we will continue to do. I expect that you and other members of this House would agree that that is the proper course of action. You have to find the evidence and, when you do, refer it to the police. That's what I expect any member in this Legislature would do, and that's what we've been doing on behalf of the taxpayers.
Your briefing note talks about how they're going to brief the president of the ORC, John Bell, because somebody got a request for information from my office. I'll look into that, and we'll turn this information over to the auditor.
Mr McGuinty: Minister, we're talking about a matter that is very straightforward. You have said countless times in the past that you don't get involved in these deals. Here is a specific deal where somebody succeeded in secretly having a strip of land added to the original piece of property. The original strip of land was not put out for public tender, and suddenly this individual gets a piece of property that has now increased a hundredfold in value.
We obtained a piece of paper, a handwritten note by an ORC official, which says there has been ministerial involvement. That's you. You involved yourself in this deal, Minister. You told us that you never get involved in these deals. You significantly changed the value of this property and, by so doing, abdicated your responsibility to the taxpayers of Ontario. Minister, why were you even involved in this deal in the first place?
Hon Mr Hodgson: I'm not aware of the details of this particular transaction. I can assure this House that I'm not involved in the day-to-day operations. However, our office is involved in referring requests from MPPs and other people who have questions on the status of a process involved in a transaction. For example, if one of your caucus members phoned our office and said, "Can you tell us the details," we would ask the ORC to prepare a briefing note to do that. That's what this note says. They have to brief the president of the ORC, who has to prepare a briefing for the minister's office.
Mr McGuinty: If the minister has some kind of reasonable explanation, I'm sure he will be quite prepared to turn over those documents and make it perfectly clear. But from my perspective, Minister, you should know that I'm turning over this evidence to the police. They're the people-
The Speaker (Hon Gary Carr): Minister of Education, this is your last warning. If you yell again, I'm going to ask you to leave. Leader of the official opposition.
Mr McGuinty: Let me read the note to you again, Minister. It says: "Brian said there's been ministerial involvement. I had to brief John Bell," who's with the ORC, "on this today, and the minister's EA." You were involved in the sale of this land, Minister. I'm blowing the whistle and I'm blowing it on you. You've been telling us that the Pope should be declaring you a saint in this matter because you're the one who's acted in the most saintly way possible when it comes to these land flips in Ontario. Now there is solid, concrete, hard evidence of your involvement in the sale of a specific piece of land. Minister, why don't you do the right thing in all of this and resign?
Hon Mr Hodgson: The Leader of the Opposition has stooped to a new low today. He's trying to make up evidence. He's trying to take credit for calling in the police when he knows full well it's this government, this ministry and this minister that have called in the police, that has led to the investigation to try to see if there's evidence of any wrongdoing or criminal behaviour in the ORC. I told him in my previous answer that we would refer this issue to the auditor and to the police. So he's standing up trying to take credit for something that we have already done or undertaken to do. If that's not the epitome of hypocrisy, I have no idea where he gets off with his principles.
Mr McGuinty: You're the one who's been trying to take credit for guarding the interests of Ontario taxpayers and everything points to the exact opposite of that. The fact of the matter is that you have completely failed to live up to your responsibility to protect the interests of Ontario taxpayers.
We knew that government land was being sold at rock-bottom prices. We knew that taxpayers in this province were getting ripped off to the tune of millions and millions of dollars. We knew that there were special deals and secret deals. But today we discovered for the very first time that this minister is involved in the centre of it all.
Once again, Minister, I'll be turning this information over to the police today, and I'm asking you to do the right thing: Resign and devote your time to doing something that you have failed to do to date, that is, assist the police in uncovering the truth in this matter.
Hon Mr Hodgson: The Leader of the Opposition talks about facts and assisting in the investigation to get to the bottom of it. He knows full well that we've done the right thing by calling in the auditors, by having the police come in and investigate. But we need to have real facts. We can't go on his scurrilous innuendo that the taxpayers have lost money. That hasn't been proven yet. That's why we got the police involved, to try to find out whether or not there's been any wrongdoing.
The only fact that is known for sure about real estate in this province is the mismanagement under your regime on the Ataratiri lands, which, for a fact, cost the taxpayers of this province $340 million, which would have provided for a tremendous number of long-term-care beds, MRI beds, emergency ward visits. That's the disgraceful legacy that you squandered when you were in government. That's the only fact that's known for sure.
We are trying to get to the bottom of all the questions involved around the ORC and its past deals-
The Speaker: Order. I'm afraid the minister's time is up.
[COMMENTS BY DON B. - ]
Your Financial Donations are Greatly Appreciated