Following the Money at City Hall
From the Nest, Issue 15
by Don McLean
Follow the money and many things will be revealed. For municipal politics in Hamilton it’s a very revealing path pointing to patterns and trends.
More than two decades ago I started reviewing the campaign donation lists that municipal candidates file after every election. The results were stunning and I believe they continue to shed light on Hamilton’s city politics today.
Twenty years ago, before the old city of Hamilton was amalgamated with its suburbs, there were 16 councillors. My research began with the 1994 election where candidates received just over $93,000 in donations of $100 or more (donors of smaller than this were not reported). Two-thirds of these could be easily identified from corporations in the construction and real estate sector as well as the main construction union. Just one-sixth came from individual voters.
There were no donations from Stelco or Dofasco or any of the other large industrial firms active in Hamilton at that time. The latter companies do make political donations but only to federal and provincial parties, not municipal councillors. That’s because city government policies have almost nothing to do with large industrial firms.
Almost 30 years later not much has changed. The total volume in the last municipal election exceeded $400,000 and the legal maximum individual donation went from $750 to $1,200. But the donation sources are still heavily dominated by corporations associated with residential and commercial development.
In 1994, the leading group in this sector – six companies that shared the same corporate address – donated to twelve of the sixteen councillors who were elected. Their combined gifts exceeded $10,000 – more than twice the legal limit at the time. The second largest donor, the biggest local construction union which is also an active developer in its own right, donated to a full slate of 16 council candidates, fifteen of whom were elected. The next six largest donors were all from the construction and real estate sector. Four provided monies to at least half of the successful council candidates.
I wrote a piece for The Hamilton Spectator about my overall findings, and its news department did a companion piece focused on the corporate group that appeared to have exceeded the legal maximum in combined donations. That got us notice of legal action from the six companies in this group – served on me, the Spectator reporter, the newspaper itself, and its publisher at the time, Conrad Black.
The case never got as far as court, and the Mike Harris Conservative Provincial government of the time didn’t press any charges. The year after the election and after the apparently illegal donations, the Province abolished the maximum collective donation limit.
The particular financial interest of the development sector in municipal council elections isn’t hard to understand. The main power of city government is to determine land use, such as zoning, official plan amendments, and urban boundary expansions.
I’ve followed municipal donations since then, and the pattern has remained largely the same. Some council candidates have refused corporate and union donations, but for those who take them – still the majority of those elected – these have accounted for most of their revealed funding.
When challenged about this, the response from councillors has generally been along the lines of, “My integrity can’t be compromised by a campaign donation”. I haven’t seen any explanation of why the various companies make the donations, or why they often help fund the campaigns of multiple council candidates.
Under provincial conflict of interest rules a councillor must declare a conflict if they or their immediate family could benefit financially from a matter before them. But campaign donations are not included in the definition of pecuniary interest, so none of the benefiting councillors ever excuse themselves from making decisions about the projects of their donors.
Campaign donations above the legal limit can be challenged by residents. This became a major public issue in Hamilton after the 2003 election when accusations were raised against several candidates including newly-elected Mayor Larry DiIanni. Dozens of apparent excess donations were flagged and his campaign eventually returned more than $25,000 of them. This also highlighted major flaws in enforcement of election laws in Ontario. Despite being a Provincial law, enforcement is left largely to citizens who then must appeal to municipal committees and councils to undertake a full investigation.
There was no shortage of documentation, but only one councillor voted for an audit and it was left to a citizen to personally launch legal action with her own funds. That required multiple hearings over a year but ended in a clear decision – the judge not only ordered a forensic audit but also strongly condemned council for failing to have done so itself.
The audit came back with 44 charges against the Mayor and a guilty plea to six charges, with a small fine and the requirement that he write an essay. Actual enforcement came down to the voters and the saga didn’t really end until he narrowly lost in the 2006 election.
I continued to examine the campaign contributions in subsequent elections, but the pattern remained largely the same. Citizens at City Hall repeatedly wrote about this and editorially urged a legal restriction on everything except individual donations.
Jean Chretien took that step in 2003 for Federal elections before he stepped down as Prime Minister. Slowly the public demand for reform of municipal campaign financing gained momentum and individual Council candidates began to refuse to accept corporate and union gifts.
A decade ago, Toronto formally banned those donations, and adopted a rebate system for individual donors similar to Federal campaign donations. But Hamilton and most of the rest of Ontario carried on with the old system. Change finally came provincially, before the last municipal election in 2018, with the banning of all corporate and union donations.
While corporate and union financial influence of municipal Councils has formally been curbed, the legislative action may not have made much difference. Many of the “individual” donations reported by Councillors bear the same names as those who signed the cheques for corporations.
A comprehensive categorization of these individual donors shows that at least 40 percent are connected to the real estate and development sector.
In the campaign preceding that, in 2014, corporate and union donations still accounted for more than half of the reported donations to half of the elected councillors (for two of them it was over 80%). Two other elected councillors got over 40% from these sources and a third simply didn’t reveal where his donations came from.
The donation lists from the last city election in 2018 can be viewed online, but all the earlier ones have been destroyed by the City. Knowing that this was their practice, I have preserved all the records I reviewed, in as complete a form as possible, and the Downtown Sparrow has not only published them in a searchable database but also made the originals (redacting personal address information) available for download.
The fundamental question all of this raises is why does the real estate and development sector, through individual donations, continue to represent the overwhelming majority of campaign funding for Council?
That pattern continues to trouble me and I think it should trouble you, too.
Don McLean is an environmental activist, the editor of Citizens at City Hall (CATCH), and a Ward 1 resident