Item - 2024.EA11.7

The Compliance Audit Committee: 
  
Has decided not to commence legal proceedings against C Kim and N Kim. 
 
1. The Compliance Audit Committee (the “Committee”) met on September 25, 2024, to hear Item EA11.7 – C Kim and N Kim - A contributor in the 2023 By-Election for Mayor who appears to have Contravened Contribution Limits under Section 88.9 of the Municipal Elections Act, 1996. 
  
2. Section 88.34(2) of the Municipal Elections Act, 1996 requires the City Clerk to prepare a report identifying each contributor to a candidate for office on a council who appears to have contravened any of the contribution limits under Section 88.9. 
  
3. Section 88.9(3) of the Municipal Elections Act, 1996 states that the maximum total contribution that a contributor may make to a candidate for the office of Mayor in the City of Toronto is $2,500. 
  
4. The report dated September 10, 2024, from the City Clerk identified C Kim and N Kim (the “Contributor(s)”) as a contributor that appeared to have exceeded the $2,500 contribution limit to the election campaign of Josh Matlow (the “Candidate”). Specifically, the report (September 10, 2024) from the City Clerk identified two contributions of $2,500, from individuals with similar names - C Kim and N Kim – and with the same address. Accordingly, it appeared that a contributor had made a donation of $5,000 to the election campaign of Josh Matlow. 
  
5. The auditor, BDO Canada LLP, explained in their report, attached as Attachment 1 to the report (September 10, 2024) from the City Clerk, setting out the audit process and the findings with respect to C Kim and N Kim. 
  
6. Neither the Contributor(s) nor the Candidate attended. No written submissions were provided. The failure of the Contributor(s) to provide information to the Committee and the nature of the alleged breach raises concerns. The participation of the Contributor(s) or Candidate in this proceeding would have been very helpful to the process and would have assisted in ensuring transparency and openness in understanding the circumstances of the apparent contravention. Indeed, the Contributor(s) could have provided answers to questions raised by the Committee, and which remain unanswered.   
  
7. For the reasons stated below, the Compliance Audit Committee has decided not to commence a legal proceeding against contributor(s) C Kim and N Kim for the contravention of Section 88.9 of the Municipal Elections Act, 1996. 
  
8. The Committee is of the view that there is a lack of information to support that the individuals – C Kim and N Kim – are the same person. Therefore, there is insufficient evidence to support that there was a contravention of the contribution limit of $2,500 per candidate. 
 
9. The Committee is not bound to commence proceedings in the face of a breach or contravention of the Municipal Elections Act, 1996. The Committee is entitled to consider all of the circumstances to determine whether legal proceedings should be commenced. This has been recognized by the courts in Lancaster v. Compliance Audit Committee et al., 2012 ONSC 5629.    
 
10. Consequently, the Committee has determined it is not in the public interest to commence a proceeding against the Contributor(s). 

Peter Hearn, BDO Canada LLP gave a presentation on C Kim and N Kim - A Contributor in the 2023 By-Election for Mayor Who Appears to Have Contravened Contribution Limits under Section 88.9 of the Municipal Elections Act, 1996.

The Compliance Audit Committee recessed its public session to meet in closed session to deliberate in private on Item EA11.7 - C Kim and N Kim - A Contributor in the 2023 By-Election for Mayor Who Appears to Have Contravened Contribution Limits under Section 88.9 of the Municipal Elections Act, 1996 and to receive advice that is subject to solicitor-client privilege.

The Municipal Elections Act, 1996 requires the City Clerk to review all contributions reported in financial statements submitted by candidates and registered third party advertisers in the 2023 by-election for mayor and to prepare a separate report for each contributor who appears to have exceeded any of the contribution limits.

The City Clerk retained an external auditor, BDO Canada LLP, through a competitive procurement process, to review all candidates and registered third party advertisers' financial statements and to report on each apparent over-contribution.

This report transmits a report from the external auditor to the Compliance Audit Committee for consideration. The external auditor completed its review of initial and supplementary financial statements filed for the 2023 by-election for mayor and identified C Kim and N Kim as having a similar name at the same address. If they are the same contributor, they appear to have exceeded the contribution limits in the Municipal Elections Act, 1996.

Within 30 days of receiving this report, the Compliance Audit Committee is required to decide whether to: (1) commence legal proceedings against the contributor for an apparent contravention; or (2) not to commence legal proceedings against the contributor. The Committee must also provide brief written reasons for its decision.