Ethics and good urban governance in Toronto: the Bellamy report and integrity in public service.
This tale became well known because of famous friends and a love affair between Wanda Liczyk, financial officer and treasurer for the new City of Toronto after amalgamation, and Michael Saunders, an American IT consultant originally hired by the City of North York, but the tale is also one that showed that Toronto was a city whose entire governance structure was in need of examination and re-working. The Bellamy report very clearly pointed these problems out. There had been ethical violations in municipal government before, but media interest and scrutiny were heightened because of the "sexy" nature of the revelations, and this sharpened the focus on local ethics. This is a story not of personal issues but of cronyism, code-of-conduct violations, poor judgment, and bad policy and decision-making by so many. The circumstances referred to in this article are ones that are illustrative of the poor judgment exercised by public servants in many governments outside of Toronto as well. This poor judgment can be exacerbated by an institutional culture that overlooks code-of-conduct violations, including conflict-of-interest violations, without fear of repercussion. Personal relationships can affect decision-making processes in ways that compromise integrity. These cases do not call for the vilification of the individuals involved but instead must be looked to as case studies that are meant to reveal some of the problems of ethics in urban governance and the arrogance of those in power. There are ways in which to change this culture, but there are difficulties involved; however, the consequences of continuing to ignore these problems are bad governance and declining citizen confidence.
My analysis begins with a description of the Bellamy inquiry and then gives a summary of Toronto's governance structure and political culture, as it had been. I then look at what should underpin ethical governance and how an ethical culture that is mindful of public trust might be created. I proceed with an analysis of the scandal and Commissioner Bellamy's findings and will show how this connects to a model of good governance. This analysis will conclude with some suggested direction for the future of ethical governance.
The Bellamy inquiry
The inquiry into the Toronto computer-leasing and external contracts, which began in September 2002, was a wide-reaching and extensive hearing process chaired by Madam Justice Denise E. Bellamy of the Ontario Superior Court of Justice. The inquiry, which lasted for well over two years and heard from over a hundred witnesses, was all in aid of surveying ethical governance in Toronto. It focused on the ethical issues of public office in the city and led to demands by the people of Toronto and other observers to clean up city government.
In the mayoral election campaign of 2003--a year into inquiry hearings--all candidates had to address questions about corruption in city hall. The winner of the election was David Miller, who was proclaimed by Toronto Star columnist, Royson James, as "the new sheriff in town." James claimed that Miller's election was a "bleak day for lobbyists, back-room boys and the old cronies who've dominated politics at Toronto city hall." (1) During his campaign, Miller used a broom as a symbol of his commitment to clean up city hall; this ethics-based campaign obviously resonated with voters on 10 November 2003, since Miller's victory was decisive.
Meanwhile, the inquiry continued. This could have been a signal that Toronto was in fact "cleaning house" at city hall. Or was it? The process of public inquiry is sometimes seen merely as a legitimating device, a way for government to quell public dissent, and show that it is willing to investigate wrongdoing. However, nothing ultimately changes. J.A. Manette points out that public inquiries are meant to make the state seem open to the renegotiation of the existing order while at the same time maintaining the existing order through this renegotiation. (2) This is a fairly cynical view of public inquiries. The more positive view would be that inquiries are meant to give the public and the government information about where government has gone wrong and how it can be improved. The lessons learned are then used as a resource and discourse to help transform government. In her report, Commissioner Bellamy refers to public inquiries as restorative. (3) They help restore public confidence and are part of the Canadian democratic process. They are also referred to as preventive--a way in which past mistakes can be learned from and not repeated. The truth probably lies somewhere in between these two views of inquiries. Public inquiries are a way to highlight public concerns and look into important government failings. Their findings can be a resource for those seeking change, but an inquiry does not represent change in itself. Change depends both on political will and public support for that change.
Governance structure in Toronto
The Bellamy report was published on 12 September 2005. It had much to say on the subject of good governance and also on the abuses of public office. Commissioner Bellamy not only made recommendations but also made statements about what she believed about the state of the City of Toronto's government. She traced the increased chaos back to the amalgamation of Toronto's seven municipalities into one mega-city in 1998. The amalgamation was not followed up by enough commensurate restructuring. The report is quite clear that urban governance in Toronto was not impressive in terms of accountability, professionalism or transparency. City structure and lines of accountability were described in the Bellamy report as confusing, and the political culture was one in which rules and codes of conduct seemed to be unknown at best and knowingly subverted at worst.
Toronto is different from other Canadian cities by virtue of its size. It is the largest Canadian city, made even larger in 1998 by amalgamation. Policy is different in a city that has a population larger than that of five Canadian provinces combined. Municipal structure seems inadequate when dealing with Toronto's level of economic and policy challenges and constant growth. Growth in population and area, however, was not been coupled with growth in the ability, coordination and effectiveness of the government. This lack of good urban governance in Toronto was revealed in sensational fashion by the scandals that began to emerge at the beginning of the 21st century. The computer-leasing and the external contracts scandals, and the inquiry and report that followed, were a wake-up call for Torontonians about the lack of the ethical underpinnings of their government.
Until very recently, the structure of Toronto city government consisted of a weak mayor and a strong council system, with forty-four wards and official non-partisanship. The mayor had political accountability, but administrative accountability fell to the city manager.
The New City of Toronto Act, which came into effect in January 2007, changed this structure somewhat by giving the mayor increased taxation and legislative powers, and a new executive council could lead policy change. (4) While this change means more power for David Miller, more will now be expected of him, given his re-election in November 2006. This should set the stage for increased leadership on ethics issues. The realities of a weak mayoral system, and the limits of municipal government action, are challenges to effective policy-making; if the institutional culture remains tolerant of ethical violations, these challenges will be exacerbated. David Miller has been known for working with people of different political stripes, which may help create a larger coalition of people committed to a more ethical city political culture.
Good urban governance in Toronto: creation of an ethical culture
In an ethical political culture, ethics is an integral part of all decision-making and policy and leadership choices. Integrating ethical considerations into the choices made in government increases public trust and stresses the personal accountability of public servants. Knowledge of public duty is central to the creation of a professional and accountable culture.
What is "good government"? There are some basic understandings of what constitutes good local government, but that does not by any means say that there is agreement on what kind of practices make a good government. There are, however, values that can guide good local government. Commissioner Bellamy held a specific set of hearings into the meaning of good government. Her report deals with four sets of values--professional, ethical, democratic and people--that have also been set out elsewhere by such authors as Leslie Pal, in reference to the 1995 Deputy Minister Task Force on Public Service Values and Ethics, and these were used to frame the discussion. (5) I would argue, however, that ethical values are the lynchpin on which other sets of values rest. Ethical values include integrity, honesty, taking responsibility, being accountable and having respect for law and due process. (6) Commissioner Bellamy stressed that the concept of accountability extends beyond financial accountability. This clarification prevents the appropriation of the concept of accountability as a New Public Management or "market" value. Government needs not only financial accountability but also political, democratic and personal accountability--being accountable to the ethics and values of your government and adhering to principles of equity and fairness. These values might be set out in codes of conduct within the framework for government, but they can be marred by process. Without integration of these values into the policy and decision-making processes, they stand apart as utopian goals rather than being used to achieve practical policy and public goals.
Public policy and administration analysts sometimes describe the Canadian system as promoting integrity rather than punishing bad behaviour. (7) The question remains, however, as to how integrity can be best promoted. Academic discussions surrounding integrity and public-service ethics generally fall into four categories: systemic culture, democracy, codes of conduct and leadership--all necessary facets for understanding how ethics and integrity are promoted.
Lawrence Pratchett claims that institutions make public-service behaviour inherently unethical since public servants rely more on symbols and culture than underlying ethical accountability or understanding:
While institutions may have the appearance of offering an ethical framework to guide the behaviour of individual public servants, therefore, they also absolve those same public servants from moral and ethical responsibility for their behaviour. Individuals become more concerned with following customs and practices than they are with achieving ethical outcomes. (8)
Institutional culture tends to be about demonstrating consistency and following unwritten rules rather than examining moral or ethical assumptions.
B. Guy Peters asks if democracy is a substitute for ethics, meaning that service to a broadly defined public interest has now been changed to service to more narrowly defined interests. This puts stakeholders and interest groups, rather than the general public interest, as the central focus of policymaking. Part of the solution, says Peters, is to use democracy and the consideration of a more general and wide-reaching public interest to enforce ethical behaviour rather than using supposedly democratic considerations of the needs of only specific lobbies or interest groups to subvert this behaviour. "What may be required, therefore, is some mixing of norms of professional conduct with political mechanisms that place some pressure on the enforcement of those norms." (9) Democracy then becomes part of the enforcement of ethical behaviour rather than a substitute for ethics.
Kenneth Kernaghan discusses ways in which public-service ethics can be better promoted by a more integrated public-service model and stresses that reliance on personal ethical standards is not an adequate strategy to ensure that public servants will make ethical decisions. As he observes, "the suggestion that contemporary public servants can rely for ethical guidance simply on unwritten rules in the form of traditions, conventions, understandings and practices is naive, and even dangerous" (10) Kernaghan suggests that ethical behaviour can be promoted through a combination of codes of conduct, leadership and staff development, which is more effective than codes alone. Understanding how ethical principles are an integral part of public service, as well as how to create an ethical attitude, is both challenging and necessary. I agree with Kernaghan that having those in senior position mentor and nurture an ethical model is very important, since these exemplars of ethical behaviour set the informal ethical culture as well as reinforce the formal one. (11)
Codes of conduct, development and democracy can converge and be actualized in Toronto through the ethical leadership demonstrated by the mayor and councillors. Following the same codes of conduct as other employees, these individuals are then able to enforce sanctions for others more convincingly. Elected officials and senior public servants must demonstrate ethical leadership if sanctions are to have any meaning, or "teeth." Without sanctions or ethically sound leadership, professional codes of conduct are not effective in achieving the goals of an accountable public service. As was stated earlier, integrity must be promoted, but I believe that punishment can also be part of that promotion and understanding, especially during the period of transition to a more ethical culture. Sanctions and reform were markedly absent in the political culture of Toronto city hall during the scandals of 2001.
The MFP/TMACS scandal
Preparations for the Toronto city council meeting of 23 April 2001 took an unexpected turn when Councillor Bas Balkissoon asked questions about a line in a staff report concerning the city's "current technology lease provider." (12) Under the heading "A Small Crack Reveals a Big Problem," Bellamy reveals the extent of the problem:
It was only a single phrase, buried in the mountain of paper delivered to every Toronto City councillor before the Council meeting--a passing reference in a run-of-the-mill staff report about ho-hum photocopiers. But that single phrase, "current technology lease provider," would lead to stories about influence, incompetence, ambition, greed, and secrets, and to many, many lies. (13)
The use of MFP Financial Services as the lessor of computers and photocopiers was questioned because there seemed to be a subversion of the decision-making process, and approvals had not gone through the normal official channels for such decisions. What also eventually emerged was that the contract with MFP was costing much more than originally projected. Of more direct relevance to the Liczyk case study was another problem that surfaced. The customized tax management and collection system (called TMACS) for the City of North York, and eventually used in the new City of Toronto, had also been pushed through council in a suspicious manner. From the time of that infamous council meeting until the Bellamy inquiry, Toronto newspapers began to fill with stories about MFP and TMACS and the chaos at city hall. The usual use of a city auditor general's inquiry seemed inadequate for the scale of the scandal and problems. A public inquiry on the Toronto's computer-leasing was called on 7 March 2002, and soon afterwards one was also called on Toronto's external contracts. Both were to be headed by Commissioner Bellamy and were conducted simultaneously.
Bellamy report findings
The Bellamy report concluded that power abuses had very obviously taken place. It also made recommendations in the areas of lobbying and external contracts and about how to revise and enforce codes of conduct. It attempted to fulfill the restorative and preventive functions of a public inquiry. The Bellamy report was a fairly damning indictment of the institutional culture at Toronto's city hall. It focused on many individuals who did not seem to understand the ethical underpinnings of the codes and rules they followed but who instead relied, as Pratchett notes, on the informal institutional culture, and this compromised ethical behaviour. A good example of this behaviour was found in high-level decision-maker, Wanda Liczyk.
In Bellamy's report, Wanda Licyzk's story was seen as central to the external contracts scandal. Licyzk was characterized as a bright and ambitious twenty-four year old when she began working for what was then the City of North York, in 1985, as a budget analyst. By 1992, she was the youngest person and first woman to be made city treasurer in Ontario. (14) The report also characterizes her as protegee of Mel Lastman, then mayor of North York. Lastman appreciated Licyzk's aggressive and energetic attitude and the fact that the city was always on budget. North York city government was described as a family, and the atmosphere was informal and friendly, but there were still rules:
The North York Code of Ethics said that an employee "never uses the position to secure advantages or favours for self, family or friends." Ms. Liczyk's contract went farther, prohibiting actual and apparent conflicts of interest. Her wrongdoing was perfectly clear when measured against both standards. It would have been to her credit had she accepted that she'd made a mistake. Instead, she minimized her misconduct and criticized this inquiry for exploring it. This showed her inability--or worse, her unwillingness--to learn from her mistakes. (15)
In order to make this conflict of interest clear, I will review the facts of this case.
Wanda Liczyk had a relationship with Michael Saunders. He was an older married man who worked for American Management Systems, who was contracted to supply a general system to North York in the late 1980s. The relationship between Liczyk and Saunders became sexual, but Liczyk said this part of the relationship ended in 1991. The two did, however, remain in close contact and were friends. Saunders worked in North York and in 1990 left his job to start his own company, which was awarded a contract by that city. (16) Wanda Liczyk was one of three decision-makers on that contract, but she did not reveal the nature of her relationship with Saunders--sexual at that time--to the others on the decision-making committee. (17) In 1991, she again was a key decision-maker in the awarding of a contract to Michael Saunders and his new partner David Maxson for their customized tax management and collection system for North York, called TMACS. Liczyk again did not reveal her relationship with Saunders, nor was this contract tendered. (18)
In the new amalgamated mega-city of Toronto, former North York treasurer Wanda Liczyk still retained a powerful position as chief financial officer and treasurer of Toronto. In this position, she still tried to favour the use of TMACS software over its chief rival, TXM software, already in use in Scarborough and Mississauga. The latter was the choice of many of the pre-amalgamation cities, including Toronto. What the Bellamy report states unequivocally is that Wanda Liczyk used her influence at city hall to ensure that TMACS and Michael Saunders would be the city's choice despite all opposition. The report chronicles her involvement in every detail of this IT decision, which should have been out of her purview. She actively campaigned against TMX software in numerous ways and venues, and even put Michael Saunders in charge of its implementation, which ensured its demise. The report has a long list of violations committed by Liczyk on behalf of Michael Saunders: constant subversion of decision-making and policy processes; the lack of paper documentation and proper insurance provisions; the use of Saunders as project manager when city employees could provide the same service at a fraction of the cost; Saunders' excessive expenses, which were never questioned; and the awarding of a further contract to Saunders for the city's water-billing software--all of which was done with little questioning because of his "favoured status." (19)
Constant code-of-conduct violations seem surprising if one believes that there were firm ethical standards in place. The Bellamy report also pointed out that the use of an American firm rather than a Canadian one and the reliance on only two people were both questionable decisions in terms of the protection of the public interest and of professional values. Perhaps the close relationship with Mel Lastman led Liczyk to believe that she could subvert the code of conduct. She was an employee who put in long hours and was well respected. Perhaps, as the report claims, she felt this, among other things, was "her due." (20) The arrogance Commissioner Bellamy identified in Wanda Liczyk is fully apparent here. There seems little doubt that the decision-making and the urban policy process was influenced by personal considerations, and to think otherwise seems counterintuitive. As Kernaghan has pointed out, reliance on unwritten rules or on one's own personal views can be very naive and dangerous.
Bad judgment in one's personal life can spill over into one's professional life, and the inability to separate these two spheres compromises professional conduct. Wanda Liczyk made no apology or admission of wrongdoing, and she still maintained that she had done nothing seriously wrong even when questioned during the inquiry. That the most respected of public servants--Wanda Liczyk had been a "star" and was considered professional and tough--should have shown such poor judgment and arrogance seems particularly troubling, but these are definitely not isolated incidents. This was a political culture that supported this type of action, which demon strates Pratchett's point of the inherently unethical nature of institutions. Knowledge of underlying ethical assumptions and concentration on the outcomes of ethical decision-making, rather than following customs and practices, should be of primary importance and will help to create a more ethical political and institutional culture.
Commissioner Bellamy wrote that it is not helpful to judge the personal relationships involved in the scandal but to examine instead all the ways that it is possible to compromise municipal policy-making decisions. Decision-making is not a precise science, of course, but it should have certain criteria that include what is best for the city and public in terms of equity and efficiency. It should not include personal considerations for the decision-maker's friends and intimates. The subversion of ethical processes and guidelines is to be avoided because the principles of accountability and professionalism rely on the fairness of the decision-making process. This is a misuse of discretion and an abuse of the public trust. The question is whether this can be achieved in Toronto.
The future of ethics and good urban governance in Toronto
Changing to a more ethical political culture and the implementation of the Bellamy report recommendations began with David Miller's restructuring of the city administration in order to streamline it and make it more accountable. This was done in 2004. He also appointed a city integrity commissioner --David J. Mullan--to provide independent and consistent advice in upholding city council's code of conduct and to support high standards and principles. (21) Mullan began his duties on 1 September 2004. Miller also said that the province must give independent watchdogs more powers to keep the city government accountable. These watchdogs include the integrity commissioner, auditor general and the lobbyist registry. (22) A lobbyist registrar position was also created by Toronto city council in February 2007.
Subsequent to the Bellamy report, however, there have been more scandals involving both department heads and city councillors. There clearly is still a need for vigilance and real leadership through personal example, a determination to change political culture, codes, development of staff, and enforcement of sanctions.
My analysis of these scandals in Toronto is not meant to be an expose on the salacious nature of urban governance but rather an examination of the dysfunction, lack of democracy and ethical decision-making in its urban governance structure. This is not a charge to be made only at this level of governance, but it is exacerbated, as the Bellamy report points out, by the confusing lines of accountability at the municipal level. This examination also has to do with the problem of rooting out longstanding systemic problems. The report speaks of a more "ethical culture" that must take over from the current institutional culture. (23) Over the period of the inquiry, Commissioner Bellamy noted that she saw strides towards a more ethical culture and more vigilance at accountability and ethical guidelines, particularly with the hiring of the integrity commissioner, that would help the "healing process." (24) This is what I want to highlight. The ultimate purpose of public inquiries, public discussions, media scrutiny and academic discourse and of politicians, other public servants and the general public being watchdogs for democracy is to try to achieve something that can at least approximate our democratic ideals. As Peters points out, democracy and ethics need not be mutually exclusive but indeed can be part of the same process of achieving equity. (25) This healing process is about re-establishing public confidence and making the decision-making process more democratic. It is also about increasing confidence by closing the gap between public expectation and reality. The Bellamy report does address issues such as political accountability, but it does not fully address the fact that local governments have had difficulties embracing their political and democratic roles and instead have been more concentrated on service provision. This was something beyond the scope of the inquiry but should be within the purview of those interested in urban governance reform.
Despite its large size and make-up, Toronto's experience in ethical violations is not a unique one in municipal governance. For all governments, there need to be clear lines of accountability and codes of conduct that are enforced by sanctions. Particular attention needs to be paid to the conflict-of-interest and lobbying rules that prevent the process of urban governance from being compromised. Without adherence to these rules, their existence, revision or their re-creation cannot help the democratic goals of equity and fairness. The lessons in democracy from this story are in how the subversion of decision-making and policy processes through conflict of interest, personal interests and agendas and lack of transparency, like enemies, conspire against good governance. There needs to be a signal from leadership, from watchdogs and from the public that there is support and indeed demand for an ethical political culture in municipal government. A municipal public service guided by democratic, professional, ethical and people values would show loyalty to public interest and be mindful of public trust. Such a public service would be best equipped to deal with the economic, social and political challenges of municipal governance, and increase their power and capacity to control, shape urban development, and play a vital role in developing a better local community.
(1) Royson James, "There's a new sheriff in town," The Toronto Star, 11 November 2003, p. Al.
(2) J.A. Mannette, "'A trial in which no one goes to jail': The Donald Marshall inquiry as hegemonic renegotiation," Canadian Ethnic Studies 20, no. 3 (1988), pp. 166-80.
(3) Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, Inquiry Process, Vol. 3 (Toronto: City of Toronto, 2005). Prepared by Madam Justice Denise E. Bellamy, Commissioner, p. 20.
(4) New City of Toronto Act, S.O. 2006, c. 11.
(5) Leslie A. Pal, Beyond Policy Analysis: Public Issue Management in Turbulent Times, 3rd ed. (Toronto: Thomson/Nelson, 2006), p. 393. See also Task Force on Public Service Values and Ethics, A Strong Foundation (Ottawa: Canadian Centre for Management Development, 1996). Chaired by John C. Tait.
(6) Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, Good Government, Vol. 2 (Toronto: City of Toronto, 2005). Prepared by Madam Justice Denise E. Bellamy, Commissioner, p. 32.
(7) Public Policy Forum, "Canada's Principle Based Approach: 'The Conflict of Interest and Post Employment Code,'" in Latin American Forum on Ensuring Transparency and Accountability in the Public Sector (Brasilia, Brazil, 2001), Public Sector Transparency and Accountability: Making it Happen (Paris: Organisation for Economic Co-operation and Development, 2002). Prepared by Janos Bertok, p. 69.
(8) Lawrence Pratchett, "The Inherently Unethical Nature of Public Service Ethics," in Richard A. Chapman, ed., Ethics in Public Service for the Millennium (Burlington, Vermont: Ashgate Publishing, 2000), p. 121.
(9) B. Guy Peters, "Is Democracy a Substitute for Ethics?" in Ibid., p. 137.
(10) Kenneth Kernaghan, "Promoting Public Service Ethics," in Richard A. Chapman, ed., Ethics in Public Service (Ottawa: Carleton University Press, 1993), p. 27 (emphasis in the original).
(12) Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, Facts and Findings, Vol. 1 (Toronto: City of Toronto, 2005). Prepared by Madam Justice Denise E. Bellamy, Commissioner, p. 34.
(13) Ibid., p. 33.
(14) Ibid., p. 45.
(15) Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, Executive Summary, Vol. 4 (Toronto: City of Toronto, 2005). Prepared by Madam Justice Denise E. Bellamy, Commissioner, p. 10.
(19) Ibid., p. 13.
(20) Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, Good Government, Vol. 2, p. 264.
(21) City of Toronto, City Council, "Appointment of City Integrity Commissioner." Media release, 21 July 2004 Toronto (web site), available at http://wx.toronto.ca/inter/it/newsrel.nsf/9da959222128b9e88525661800 6646d3/6d548a055038f82e85256ed8006b1128?OpenDocument.
(22) John Spears, with Vanessa Lu and Laurie Monsebraaten, "Watchdogs need more bite: Miller," The Toronto Star, 4 October 2005, p. A1.
(23) Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, Good Government, Vol. 2, p. 25.
(24) Toronto Computer Leasing Inquiry and Toronto External Contracts Inquiry, Executive Summary, Vol. 4, p. 82.
(25) Peters, "Is Democracy a Substitute for Ethics?" in Chapman, Ethics in Public Service for the Millennium, p. 137.
The author is assistant professor, Department of Canadian Studies, Mount Allison University. She would like to gratefully acknowledge the suggestions made by the Journal's anonymous reviewers.
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|Title Annotation:||RESEARCH NOTE / NOTE DE RECHERCHE; Denise E. Bellamy|
|Publication:||Canadian Public Administration|
|Article Type:||Author abstract|
|Date:||Sep 22, 2007|
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