Ex-MP made $1M on Ontario town deals while sister was mayor, inquiry reveals

Former Ontario Liberal MP, the Hon. Paul Bonwick, earned more than $1 million in consultant’s fees on a series of backroom deals involving public money while his sister was a local mayor, a judicial inquiry has revealed.

Public hearings got underway Monday in the ski and summer vacation town of Collingwood, Ont., northwest of Toronto, with inquiry lawyers making public key emails and documents from 440,000 pages of evidence they’ve gathered.

Town council called the probe after Ontario Provincial Police began investigating the multimillion-dollar sell-off of part of Collingwood’s power utility and allegations of improper influence and kickbacks involving the proceeds.

Bonwick told CBC News Monday that he and his company, Compenso Communications, performed “a broad range of consulting services” to earn the money and flatly denies any collusion with his sister, town officials or utility insiders to gain an unfair advantage.

“Absolutely not,” Boniwck said in an email, saying he never improperly obtained insider information. “No. Nothing deemed confidential or that wasn’t accessible by other parties if requested,” Bonwick wrote.

The current mayor, Brian Saunderson, elected last fall says he pushed for this inquiry while sitting on the previous council.

“I think the public deserves to know what happened,” Saunderson said at the outset of the hearings. “The things that happened here in Collingwood are really not unique. They are things that could happen in any small community.”

No one has been charged. The OPP investigation continues.

The public inquiry is to hold hearings through June and deliver its findings in the fall.

Insiders paid bonuses

Bonwick, MP for Simcoe-Grey from 1997 until 2004, is one of the key subjects of the inquiry over his roles as both a consultant — and as brother to former mayor Sandra Cooper.

Bonwick was a paid consultant for PowerStream, which in 2012 bought a 50-per-cent stake in Collingwood’s power utility, Collus, despite the town receiving a much higher bid from another potential buyer.

The public was never told — and the then-mayor never disclosed — that her brother was involved in the multimillion-dollar sell-off.

Inquiry records released last week revealed for the first time that a number of utility insiders were paid bonuses, and that Bonwick — who worked closely with them and his sister in the mayor’s office to help PowerStream clinch the deal — made $323,000 in fees.

The records also suggest PowerStream had insider information and special access to Collingwood council during the bidding.

“It paints a picture which is yet to be proven of a very flawed process that ended up in a deal that brought a subpar return for our taxpayers and will continue to haunt taxpayers for years to come,” Mayor Saunderson said.

$756K in fees from construction deal

The public inquiry will also examine what Collingwood officials did with the millions in proceeds from the sale, including $12.4 million the town spent on a sole-sourced contract to build dome structures over a town pool and skating rink.

CBC News last summer revealed that Bonwick secretly made an additional $756,000 fee as a consultant for BLT Construction, helping the firm land the deal with the town in record time with little public scrutiny.

OPP investigators allege Bonwick’s role was “shrouded in various layers of secrecy and is evidence of fraudulent activity — to which the Town of Collingwood is the victim,” according to a 2014 search warrant.

In the court document, the OPP also accused Bonwick of working closely with the town’s then-chief administrative officer Ed Houghton who police suspected of breach of trust for his role.

While the OPP investigation continues, none of those allegations has ever been tested in court and police have charged no one.

Bonwick says the public doesn’t have all the facts.

“I remain hopeful that as the inquiry gets underway, and the subsequent recommendations that will be provided by Justice (Frank) Marrocco, a much more clear understanding of the events leading up to the sale of the utility will be made available to the public,” Bonwick told CBC News.

Bonwick is attending the inquiry representing himself. He was denied funding for a lawyer in an ongoing dispute with the municipality. Town officials won’t offer financial assistance, claiming Bonwick has failed to disclose details about his personal finances to justify support.

Bonwick’s sister, ex-mayor Sandra Cooper, is being called to testify at the inquiry.

She has declined numerous opportunities to comment and has hung up on CBC News when asked over the telephone about her brother’s role in town deals under her watch.

Houghton, the former town CAO, who also served as president of the utility at the time of the sell-off, has denied any wrongdoing in responses to questions from CBC News.

Collingwood has already changed its own conflict of interest policies to prohibit elected officials from making decisions on deals when a sibling is involved, something not currently prohibited by provincial legislation.

Mayor Saunderson says other small- and medium-sized municipalities across Canada can learn from the Collingwood inquiry, as local governments take on more responsibilities, and face less scrutiny in an age of shrinking media.

“We’re increasingly at risk. In the last five years we have seen the closure of the Enterprise Bulletin, which was a newspaper that had been in town for 150 years. Our local TV station is less active. Our fifth estate is not there to shine a light on things.”

Inquiry lead counsel Kate McGrann says hearings will continue until mid-June, with the presiding judge to deliver findings and recommendations later this year.

“We’re looking to be able to explain to everyone what happened. The people of the town of Collingwood would like to understand what happened when the town sold half of its shares in the public utility.” McGrann said in an interview, noting the inquiry will follow the money trail of all involved.

“The inquiry is here to do very specific things. Investigate. Report. And make recommendations.”