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COVER STORY

Lease Scandal Two


by Judi McLeod
December 19 - January 23, 2001

The City of Toronto's controversial $85 million computer leasing contract is only the tip of the iceberg.

The same senior city staff, who recommended the controversial multi-year leasing deal for computers with MFP Financial of Misssisauga, will cost local taxpayers $43 million for a telephone deal they recommended to city council, documents obtained by Toronto Free Press reveal.

The city's former information technology director Jim Andrews, responsible for the computer scandal, is responsible for another fiscal fiasco waiting to be uncovered--the city's telephone scandal.

A Mitel telephone system had been in place at Toronto City Hall for 10 years. Independent information technology experts and city hall staff say the system had been entirely upgraded at a cost of one million dollars, and was the most advanced system available, when Andrews recommended a $5 million switch over to a Bell system in 1999.

The key to the figures in this financial fiasco is that taxpayers must pay ongoing operating costs for the life of the system--estimated to be $43 million over five years.

Andrews, who bailed out at audit time, took a job with the Ontario Property Assessment Corp. (OPAC).

Local councillors, who inked both deals, admit they have concerns about how some of the city's most senior managers, including Andrews and former city treasurer Wanda Liczyk, were entertained by MFP's sales staff.

Both Andrews and Liczyk were MFP's guests in box seats at the Air Canada Centre during Maple Leaf hockey games. The box is owned by Maple Leaf Tie Domi, whose brother Dash was MFP's salesman on the computer deal.

City of Toronto Project Manager, Corporate Services Joan Moyer is Chair of the North American Central Committee for Nortel. Moyer, who spoke to the telephone deal at city hall meetings, travelled at the expense of Nortel. Moyer and Andrews also travelled on city business together.

During discussion of the telephone contract, Moyer never declared a conflict of interest.

City hall staff concerned about the telephone contract registered concern that someone had started ripping out the cable before a decision for the new system was even made.

"Some councillors knew for sure but looked the other way," said one staffer.

"The report on the telephone contract was well over 100 pages," a businessman, who spoke on the promise of anonymity, told TFP. "There were some serious omissions and there were deceptions."

"Consultants were used for cover. They were told to make the deal look good on paper. When asked if any single councillor questioned the switchover in systems, he answered in the negative. "Council spent all morning debating over a $200,000 savings in cutting their limos, and in the afternoon of the same day spent less than 20 minutes blowing millions of dollars. They seem to be able to understand fifty-dollar decisions, but don't understand multi-million dollar decisions. The shame here is that councillors dont even come close to protecting the taxpayers' investment."

Prominent lawyer Jeff Lyons is the registered lobbyist for MFP Financial Services Ltd. of Mississauga. Lyons is a zealous seller of tickets for Mike Harris government fundraisers. According to provincial Liberal Leader Dalton McGuinty, 'The province has done about $425 million worth of business with the financing company since 1995.'

At press time, TFP was unable to determine whom, if any, registered lobbyists were on file for Bell Telephone.

After council approved the telephone system deal, at least one discouraged senior telecommunication staffer left city employ.

James Ridge, a former military officer who joined the city staff in late 1998 as head of licensing and standards, and who served on the provincial Crime Commission under former Scarborough West MPP Jim Brown, was asked last August to conduct a review of numerous controversial city contracts.

"One of the things we've been doing is having a really very careful look at all the major contracts that we're partnered to at the moment," Ridge told the Toronto Star.

Ridge should start with the telephone contract.

But he should take note that when TFP columnist Jeff Goodall, then a 25-year employee of the city finance department, blew the whistle about cheques of up to one million dollars not being cashed by the municipality due to bureaucratic incompetence, he was fired by former treasurer Wanda Liczyk.

Canada Free Press founding editor Most recent by Judi McLeod is an award-winning journalist with 30 years experience in the print media. Her work has appeared on Newsmax.com, Drudge Report, Foxnews.com, Glenn Beck. Judi can be reached at: judi@canadafreepress.com


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