July 14, 2003
It didn’t take long for information elicited from the public inquiry into Toronto’s MFP computer leasing scandal to be relegated to the back pages of the daily newspapers.
Right there, next to the obituaries, is where you can keep up with the inquiry in the Toronto Star.
Nor is it just lazy summer days that makes information being extracted by lawyers from those called for testimony at the ongoing inquiry, capital ‘B’ boring.
The details were of enormous interest to John Q. Public when it was learned that those rubes at city hall made a deal on computers for $43 million that shot up to more than $80 million. Human nature being human nature, and city hall being city hall, taxpayers are now asking, "What else is new?"
Next to newspaper obits, we’re reading that city finance officials were "amazed" that MFP Financial Services Ltd., when they came calling, was offering rates on a computer leasing deal lower than the municipality’s cost of borrowing.
"I think we were all surprised that MFP was able to bid lower than our cost of money," city financial official Don Altman recently told the inquiry.
MFP was offering the city the equivalent of a 4.25 percent interest rate, as compared to the 5.5 percent that the city would pay on borrowed funds, Altman said.
Sounded good, but surely worth the effort of trying to make it stick.
The inquiry is costing city taxpayers more millions to chase down already missing millions. Predicted to continue beyond the Nov. 10 municipal election, the inquiry is probing how the city leased $85 million worth of hardware and software, even though elected officials known as councillors apparently rubber stamped a mere $43 million worth.
As testimony unwinds, we’re hearing that the city’s information and technology division staffers were the point people for the deal, while all important finance department types served only in advisory roles.
According to Altman, someone woke up in the finance department. It seems that in the spring of 2001, city financial analyst Ralph Frebold realized that the rates the company had been charging the city were much higher than were originally quoted.
At a meeting called to discuss the concerns, Len Brittain, the city’s director of treasury and financial services, said the equipment had grown to a value of $100 million, and at interest rates far higher than estimated.
Sounds good, guys.
But like so many other things that happen at Toronto City Hall, the horse was long out of the barn when the wake up call came.