Jim Karygiannis is back at city hall but not yet clear of campaign finance scrutiny

Jim Karygiannis is back at city hall but not yet clear of campaign finance scrutiny

Ejected from Toronto City Hall over campaign finances and then parachuted back into office by a sympathetic judge, Coun. Jim Karygiannis got a warm welcome at Tuesday’s council meeting.

“I want to thank everyone who supported my family, my staff, my constituents — I received hundreds of emails, numerous calls,” said the Ward 22 Scarborough-Agincourt councillor, who was stripped of his duties, and his name taken off his city hall office, by the city clerk Nov. 6.

“I’m just happy to be back. Looking forward to continuing my work,” he told reporters less than 24 hours after a judge agreed changes made to his 2018 campaign financial statements were done “inadvertently” and called part of a provincial law triggering his automatic ejection an “apparent absurdity.”

Karygiannis smiled at council colleagues who greeted him with handshakes and waves and later voted to put him back on his previous committees. But Karygiannis is not yet clear of questions about a $27,000 post-election dinner and other campaign spending.

Adam Chaleff, the Torontonian who triggered a city review of Karygiannis’s spending after questions were raised in a story by the Scarborough Mirror and toronto.com’s David Nickle, said Monday after release of the judge’s ruling that he is “disappointed” with it, and considering possible legal options.

Regardless of whether Chaleff challenges the judge’s ruling, Karygiannis faces a compliance audit of his spending before and after the October 2018 election that saw him defeat colleague Norm Kelly in a big new ward created by Premier Doug Ford’s cut to the size of Toronto council.

If the city-ordered audit determines Karygiannis overspent his campaign limit or broke other rules, a three-member committee of citizen appointees could decide to refer the matter to a special prosecutor who would decide whether or not to prosecute Karygiannis.

Penalties for breaking Ontario’s Municipal Elections Act can include fines, ejection from office and even jail. But judges rarely impose more than fines and have the discretion to decide a candidate made an honest mistake and shouldn’t be turfed from office.

Asked Tuesday about facing the compliance audit, Karygiannis said only: “One moment at a time, one hour at time, one day at a time.”

More than two weeks ago Karygiannis was told by city clerk Ulli Watkiss he was automatically removed from office after filing a supplementary financial statement showing he had overspent the limit for parties and other post-election “expressions of appreciation” by nearly $26,000.

The supplementary statement differed from his earlier campaign expense filing in that it moved expenses related to a roughly $27,000 dinner at Santorini Grill in Thornhill held two months after the election from the fundraising category — not subject to spending limits — to the parties and appreciation category that are subject to the cap.

Moving the expense meant Karygiannis had blown way past the $6,120.80 limit for “expressions of appreciation” for Ward 22 candidates.

Municipal campaign spending rules were toughened in 2016, including a new provision that anyone filing a statement showing overspending on expressions of appreciation be immediately stripped of their duties and barred from running or being appointed to council until after the 2022 election.

Superior Court Justice William Chalmers, ruling on Karygiannis’s application for judicial relief from that penalty, said he had jurisdiction to consider the matter. Chaleff’s lawyer had disagreed.

Chalmers then ruled Karygiannis listing the over-the-limit dinner as an appreciation event was done “inadvertently” — the politician had called it a “clerical error.” Finally the judge said the automatic expulsion for breaking that rule was unreasonable and he was empowered to grant him discretion that does not exist in the legislation.

That lack of discretion created an “apparent absurdity” in the Municipal Elections Act which “could not have been intended by the Legislature,” Chalmers ruled.

Ted McMeekin, who as municipal affairs minister in Ontario’s previous Liberal government oversaw the toughening of campaign finance provisions, said he won’t argue with the judge’s reasoning — but his government absolutely intended tough penalties as a warning for candidates to follow rules.

“Good for him, I guess,” McMeekin, now retired from politics, said of Karygiannis in an interview on Tuesday from his Hamilton home.

“Who am I to criticize the judge? We have a legal system and process, and so be it if the judge in his or her infinite wisdom, or folly, has decided that they think the (automatic expulsion provision) is bizarre, that could be a clue to the existing government to perhaps have a look at it …

“But we normally don’t put absurd legislation in place,” said McMeekin, noting an association representing most Ontario municipalities gave advice on the changes. Karygiannis is, so far, alone among thousands of candidates in hundreds of municipalities to face expulsion over 2018 spending.

McMeekin previously told the Star the new provision was a “blunt instrument” intended to clamp down on candidates who raised far more than they needed, and then used surpluses to hold lavish parties for supporters and give them gifts such as Rolex watches.

It’s up to candidates to read the rules and follow them so there is a level playing field and no abuse of campaign donations, he said. In Toronto campaign donations are heavily subsidized by taxpayers through rebates that are supposed to be offset by a return of campaign surpluses to the city treasury.

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“Candidates need to ask for bullet points of the rules, and make sure they have a good fiscal person to make sure they follow the rules, and to raise red flags around things like a $30,000 thank-you dinner,” McMeekin said.

Last May, Nickle reported that Karygiannis’s campaign filings revealed he raised more than $217,000 — far more than any of the other Toronto council candidates including his main rival Kelly.

Much of the money was spent after Karygiannis had won, including $81,000 in “honoraria” paid out to 21 individuals including campaign volunteers.

With files from Jennifer Pagliaro

David Rider

David Rider is the Star’s City Hall bureau chief and a reporter covering city hall and municipal politics. Follow him on Twitter: @dmrider

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