Ontario's integrity commissioner released a 59-page report on Patrick Brown Thursday afternoon. The thorough rundown by J. David Wake contains many unreported details that may be of interest to avid Ontario politcos, above and beyond the headline news.
Yes, the former PC leader was found to have broken the Member's Integrity Act by failing to disclose a $375,000 "loan" from now former candidate Jass Johal as well as some rental income from the property, but the report says a lot more than just that.
Here are eight takeaways:
1. Brown's personal finances were a mess and his life was subsidized by the PC party
We've already reported the basics: Brown bought a $2.3-million waterfront home with a $1.7 million mortgage, and making payments on it consumed nearly his entire parliamentary salary. To secure the loan in the first place, the then-Tory chief required an extra $375,000 in addition to the $200,000 he had available for the downpayment — and that money was lent to him by his "close friend" Jass Johal.
But Brown also told the integrity commissioner — and TD Bank, in the process of applying for his mortgage — that he had virtually no expenses. His condominium in Toronto and all related expenses were paid by the PC Ontario Fund, as was his personal driver, car, phone and some travel expenses, while the legislative assembly paid for his internet.
"There is also some indication that the PC Ontario Fund paid for expenses relating to grooming and dry cleaning," Wake writes, adding that suggests Brown didn't have any other sources of income.
In late summer or early fall of 2017, members of his inner circle had a discussion about Brown's personal finances, during which his executive assistant, Logan Ross (Bugeja) — who handled his day-to-day finances and personal schedule, including booking his tennis court times — estimated his "shortfall" was $30,000 to $50,000, according to her recollection. Brown's former chief of staff, Alykhan Velshi, recalls that figure to be $60,000.
The meeting was sparked when Velshi discovered the first of two affidavits related to the controversial loan. The conclusion of that meeting was that the party should cover the shortfall and a professional banker take control of Brown’s finances, but the latter didn't happen before Brown's political career collapsed in late January.
2. Brown's and Johal's accounts of the "loan" don't add up
The play-by-play of how the $375,000 "loan" came to be is a little convoluted and the two people involved — Brown and Johal — gave the integrity commissioner different accounts.
They start out the same: Brown needed an extra $375,000 to afford a downpayment on the $2.3 million waterfront home, which he'd put an offer on in late May of 2016.
Brown claimed it was Johal who proposed that Johal purchase Brown’s ownership interest in Hooligans, a restaurant in Barrie that Brown co-owns with friends, as well as Brown’s two million Aeroplan points, for $375,000, and that that occurred during a lunch or dinner meeting in late May or early June 2016.
However, Johal claims it was Brown who asked for help with the downpayment and proposed that deal.
In either case, an affidavit outlining the deal was signed and dated June 11, 2016.
There also appear to be some discrepancies concerning what Brown's assets were worth; Johal said that he estimated the shares in Hooligan's were worth $400,000 and the Aeroplan points worth $40,000 to $50,000, but Brown had valued the restaurant shares at only $84,000 when he disclosed it to the integrity commissioner that year.
However, Brown now says he believes they're worth more, but “his understanding of the value of his share appears to be based on the amount of time and money that he and his partners spent on the business,” Wake wrote.
Neither Brown nor Johal seemed to look too seriously at evaluating the restaurant shares; Johal says his estimate was based on visiting the place twice.
Their accounts also differ as to why the deal didn’t go ultimately through. Brown said it was because he wanted to stay involved with the restaurant because it’s co-owned by his friends, and Johal said it’s because Brown believed his shares were worth more than $375,000.
“Mr. Johal indicated that Mr. Brown then asked him to prepare an affidavit to indicate that the deal had been cancelled," Wake wrote. "Brown’s evidence on this point differs. He stated that he did not ask Mr. Johal to prepare an affidavit and believes that Mr. Johal did this to protect himself."
3. The witness to the loan is a convicted fraudster who was deeply involved with the party's troubled nominations process
An agreement outlining the terms of the loan was dated June 16, 2016, and witnessed by Snover Dhillon, according to Wake's report.
Dhillon, a party fixer with close ties to Brown who operated on the margins of PC organizing, came to the attention of politicos outside Tory circles two months ago. QP Briefing obtained an email from former party lawyer Mike Richmond that laid out a proposed $22,000 settlement for would-be Hamilton-area candidate Jeff Peller to compensate him for cash Peller allegedly paid Dhillon for "various illegal activities," in the words of Velshi, the ex-chief of staff.
Four PC sources, who have been involved in the party's troubled nomination process and spoke on background to QP Briefing, expressed similar concerns about Dhillon's involvement in nomination races where irregularities were alleged.
Dhillon has convictions for fraud in Toronto and York region dating back to 2011, according to records obtained by the National Post.
The integrity commissioner's report also shows says there is evidence Dhillon paid for Brown's on-and-off-again girlfriend Genevieve Gualtieri to travel to Sault Ste. Marie twice during the 2017 byelection to meet Brown.
"Mr. Brown explained that he did not ask Mr. Dhillon to purchase these flights and that this was Mr. Dhillon trying to 'suck up' to Mr. Brown," Wake wrote.
4. Brown has personally made no payments on the controversial $375,000 "loan" — but his mother has
The integrity commission's report describes the $375,000 as a loan throughout, but it appears Brown has not made any payments toward it.
The terms of the loan, according to a document produced by Johal, include that interest on the principle at 4 per cent a year is to be repaid in consecutive monthly installments of interest only, starting on Aug. 28, 2016, and continuing until July 28, 2018, with the balance due then — a little over a month after the scheduled election date.
The loan was to be secured against the property and Johal was to be listed as a lender on the title, but that never occurred, Wake found.
Johal told the commissioner he has only received two $4,000 interest payments on the loan — and both came after Brown dropped out of the leadership race to replace himself as leader. The cheques were signed by Brown’s mother, and hand-delivered by Brown, according to Johal.
Brown appeared to have no idea what was happening with his loan repayment.
"When asked when his mother began making interest payments, Mr. Brown replied that 'Jass [Johal] would know the timetable,' " Wake wrote. "When asked whether he had information about the process or mechanics of how his mother was making the payments, Mr. Brown indicated 'Jass would have that.' "
The report states that Brown had advised Johal that he wouldn't actually be able to make the monthly payments on the loan, but Johal had no problem with that because the interest would be payable at the end of the term along with the principal amount. It is not clear how Brown would be able to afford to make that payment at that time, or if he was expected to.
5. Brown "may have been less than transparent" with his bank when he secured his mortgage
When Brown applied for the $1.7-million loan, he only had $200,000 and needed another $375,000 for the downpayment, which the bank didn't want in the form of a loan from a non-family member, the report says.
However, Johal isn't family — and the bank wasn't told that the $375,000 was a loan that came from him.
Instead, when Brown applied for his mortgage, the bank was given a package of documents that included a copy of the original affidavit that described the $375,000 as the proceeds of an asset sale. The bank was not given the follow-up affidavit nor the loan agreement, even though the asset sale described in the affidavit had already been cancelled, and a second affidavit stating that had apparently been drawn up.
Brown admitted he never told the bank the asset sale was cancelled and the $375,000 was actually a loan, Wake wrote.
"Mr. Brown may have been less than transparent with the Bank in order to secure mortgage funds to purchase the Property," Wake wrote.
The commissioner wrote that he could see at least two reasons why Brown may have wanted to keep the true nature of his debt to Johal a secret, one of which was not to "alarm" the bank, and the other was the political perception of being in a PC candidate's debt.
The bank was also given a copy of a residential tenancy agreement between him and a friend, Justin Heran, outlining a plan to rent part of the home to Heran for $2,000 a month. That demonstrated an income stream to the bank to help secure the mortgage, but Brown cancelled that agreement too and never informed the bank.
"One is left to speculate whether Mr. Brown and Mr. Heran ever intended to follow through with the Lease when it was signed, or whether it was merely prepared to get the Bank off Mr. Brown’s back. I make no finding one way or the other." Wake wrote.
"The arrangements made by Mr. Brown to secure a down payment for his purchase of the Property as outlined above were Byzantine in nature and disturbing on many levels."
Brown has many friends, and one of them helped him get the mortgage in the first place, according to Wake. James Dodds, a vice-president at Toronto-Dominion Bank, had known Brown since they were teenagers and set him up with a mortgage specialist.
6. The integrity commissioner's report has been sent to FINTRAC by a Brown critic
This one isn't stated in the report itself. Carlos Naldinho filed a report with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) in February, airing his concerns about the $375,000, and requesting a money-laundering investigation. Naldinho tells QP Briefing he has since sent the financial intelligence unit a copy of the integrity commissioner's report as well.
By federal law, FINTRAC cannot comment on any reports or investigations and QP Briefing has no information about whether an investigation has been launched.
Naldinho is a conservative activist who had been campaigning against Brown's leadership of the PC party during his tenure, and had serious concerns with the party's troubled nomination process.
7. The integrity commissioner also raised some red flags about Brown's sporting event attendance
The integrity commissioner suggested Brown may have also contravened the Member's Integrity Act by failing to declare he'd accepted tickets to sporting events as gifts, based on information the PC leader apparently volunteered in his interview with Wake.
"He was asked if he had received any gifts, to which he replied in the negative," wrote Wake. "He then immediately qualified his answer by providing an exception for attendance at sporting events. His reasoning was that he did not consider his attendance as a gift because he was not going to watch the games; he was going as a favour to his hosts and to meet people introduced to him in one of the 10 or so boxes he would routinely visit during the course of a game."
"According to Mr. Brown this practice is widespread among members of the Legislature."
Brown is quoted as telling the commissioner: "I was doing them a favour by showing up because I was a draw."
Wake added: "Mr. Brown denied having accepted tickets from lobbyists, which is comforting especially since Mr. Brown was listed in the Ontario Lobbyist Registry during the past three years consistently as one of the main lobbyist targets."
However, Wake noted the issue is outside of the scope of his investigation.
8. Patrick Brown has a new job
After Brown was turfed from the PC caucus, he announced he would not run in the June 7 election. He also told the integrity commissioner he has accepted employment as vice-president of Tortel after getting an offer from president and CEO Laj Prasher, a friend of Brown since his days in federal politics.
-with files from Christopher Reynolds