The Toronto Star
Jack Lakey
Family members of a powerful Metro union boss with close ties to the NDP received plum jobs at the union's provincially funded housing projects, contrary to government policy.
Michael J. Reilly, business manager of Labourers' Local 183, ruled the union with blustery Irish charm and an iron will until he retired Feb. 9. As chairperson of the union's non-profit housing program, Reilly was instrumental in securing at least $44 million in provincial government loan guarantees to build two social housing developments. Reilly signed the application papers for both.
Reilly's son and two of his sons-in-law earn their livings at those buildings, and two other social housing projects operated by the union.
The Star has found that:
- Michael Reilly Jr. earns $60,000 a year as director of Local 183's non-profit property management corporation, a job he was appointed to in 1992 with no competition. At the time, his father was the union's secretary-treasurer and chairperson of its non-profit property management board. During a recent eight-month period, Reilly Jr. also racked up $10,206 in mileage expenses and thousands more as a part-time instructor for the union.
- Sean McCann, Reilly's son-in- law, earns $65,000 a year as superintendent at Local 183's Duncan Mills co-op, one of the non-profit buildings. There was no job competition for that position. He was hired in late 1993, when Reilly Sr. ran the union and was chairperson of Local 183's non-profit management board. McCann also operates a contracting company that does maintenance work at some of the other buildings.
- Michael Cassidy, another son-in-law of Reilly's, operates a contracting firm that has been doing maintenance work at the union's non-profit buildings since 1990, when Reilly was secretary-treasurer of the union.
Housing ministry guidelines state that groups (Local 183, in this case) that secure government loan guarantees to build non-profits, and then manage them, should not use their position to provide jobs to family members. Government rules also require job competitions for positions in non-profit buildings. The ministry requires all potential conflicts of interest to be disclosed. Sources say that was not done in this case.
If the ministry finds a group to be in violation, it has the power to terminate the group's involvement in the non- profit building.
Reilly Jr. told The Star he did not get his job because of his father.
McCann would not return calls from The Star, but the chairperson of the Duncan Mills co-op board of directors, where McCann works, says he doesn't see any conflict of interest in employing McCann as superintendent.
Cassidy hung up on a reporter when told he was speaking to the newspaper.
Progressive Conservative MPP David Turnbull, who represents the Don Mills riding, home to one of the projects, says Reilly's family is still enjoying the fruits of his clout with Local 183. Turnbull, who has long questioned the relationship between Local 183 and the NDP, says the government doesn't want to enforce its own conflict-of-interest rules because of the connections.
"We need a legislative inquiry to examine the connections between the government and the union," Turnbull said. "If the government and the union have nothing to hide, an inquiry would bring that out."
Reilly hosted an "Evening of Appreciation for Bob Rae" dinner just over a year ago that raised $100,000 for the re-election campaign of the party, although as much as $60,000 was refunded to companies that bought tables at the dinner because of NDP funding- limit rules.
In Ontario, groups can apply to the province to sponsor non-profit housing. Local 183 is one such "sponsor group."
It has four social housing developments built with loan guarantees from the province: Duncan Mills, a 222-unit housing co-op in North York completed last year at a cost of more than $33 million; Unity Village, an 82-unit building that opened last fall in Ajax; and two projects in Mississauga - a building on Montevideo Rd. and a townhouse complex and building on Bristol Rd. W.
To get a government loan guarantee to build social housing, a sponsor group must demonstrate to the housing ministry that its proposal is more worthy of funding than proposals from other groups. For every group that receives a loan guarantee, nine are turned down.
Each of Local 183's four developments are operated by a board of directors, consisting mainly of residents, which is responsible for administering a budget and paying off the mortgage.
Although Reilly Sr. is no longer on the Unity Village board of directors, his daughter Theresa, who is married to Cassidy, is shown on corporation documents as an unpaid member of its board.
To oversee the housing, Local 183 created a non-profit property management corporation with a board of directors that was chaired by Reilly Sr. and is made up of union executives. The elder Reilly signed the government application papers for the Duncan Mills, Unity Village and Bristol Rd. projects and chaired the board of directors of each, before union members were replaced with residents on the boards.
However, Reilly, who has been a union executive since 1961, listed his occupation as a "foreman labourer" on the June 25, 1991, project application papers for the Duncan Mills co-op.
Reilly resigned as chairperson of the non-profit property management corporation last fall, after The Star started asking the union and the housing ministry questions about the jobs held by his family. He refused to say why he resigned when contacted by phone, and would not consent to an interview.
Trevor Studden, central region manager for the ministry, said Reilly's resignation from the non-profit management board does not mean the conflict of interest is resolved. Studden stressed it is up to Local 183's non-profit management board, which consists of union members and executives, to know and comply with the ministry's conflict-of-interest guidelines. "We want them to get value for their money, and make sure that they are not giving contracts to somebody because they are somebody's relative," Studden said.
"If there is no relationship between the board and the party doing the work, then there should be no concern. We are hoping that the non-profit board has reviewed this and feels comfortable that no conflict does exist."
In addition to his $60,000 salary, Reilly Jr. is paid 35 cents for each kilometre for which he uses his vehicle on company business. Documents show that between April 14 and Dec. 12, 1994, Reilly Jr. collected a total of $10,206.96 in mileage expenses - a claim that represents more than 29,000 kilometres.
On a July 28 "cheque requisition" form obtained by The Star, Reilly Jr. claimed $2,454 in mileage for April, May and June of 1994. However, documents show he was also issued a mileage cheque for $1,935 on April 14, and a mileage cheque for $1,967 on June 6.
In a brief interview, Reilly Jr. agreed that $10,206 for mileage over an eight- month period "is a lot of money," but said he doesn't recall receiving a cheque for $2,454.
Reilly Jr. said one of the reasons he does so much driving is because "I work seven days a week, 14 hours a day. It's a job that I like, so I work hard at it."
Unemployment among Local 183's 15,000 members is 40 per cent, but none of the members got a chance to apply to be director of the non-profit management corporation. The job was never posted.
Sources say Reilly Jr. had no qualifications for the job. He had to be sent on courses where he learned some property management skills. Reilly Jr. insisted he didn't get the job through family connections. He said he was hired by John Stefanini, his father's predecessor as Local 183's business manager. But he conceded his father was secretary-treasurer of the union when he got the job.
At Local 183, the secretary-treasurer is in charge of personnel. Reilly Jr. moved into a two-bedroom apartment at the Duncan Mills co-op when the building began accepting tenants early last year, but he moved out suddenly last fall.
When Reilly Jr. was not roaming along the highways as director of the non-profit management corporation, he worked as a part-time instructor at the union's training centre.
During 1993 computer training funded by a $1.6 million federal grant now under investigation, documents show, Local 183 billed its training centre a total of $7,903.36 for the services of Reilly Jr. as a part-time instructor for three months.
Until last fall, Reilly Jr. also worked weekends as a part-time instructor for health and safety programs at the training centre. He was paid a flat rate of $250 daily, with no deductions. He also taught a hazardous materials course on weekends that paid between $150 and $250 daily, with no deductions.
McCann, who is married to Reilly's daughter Noreen, has been superintendent at Duncan Mills since late 1993, when it was still under construction.
In addition to his $65,000 salary, which sources say is among the highest stipends for any co-op superintendent in Ontario, McCann has a benefits package worth nearly $10,000 annually, including a two-bedroom apartment in Duncan Mills for half price.
Gord Hawkins, chairperson of the Duncan Mills board of directors, said the board is aware that McCann is Reilly's son-in-law, but insisted that Local 183 "has nothing to do with the co-op." Hawkins said he didn't know if anybody else got a chance to apply for the job, but he stressed that the board thinks McCann is an excellent superintendent. He said the board isn't worried about people who think it is a conflict of interest for McCann to have the job.
McCann spent 10 months in a Florida jail after he and three others were arrested in Palm Beach County in January, 1990, in a plot to purchase a Stinger anti-aircraft missile for the Irish Republican Army. Undercover officers with the U.S. customs service conned two Irish nationals in Riviera Beach into believing they could sell them a Stinger surface-to-air missile for $50,000.
The men who wanted to buy the missile told the undercover agents that a man was driving down from Toronto with the $50,000 needed to pay for it. The man, Seamus Moley, was accompanied by McCann, who later told police he was entering the United States to start a job building scaffolding in Houston.
But he was arrested along with the others because authorities believed he was part of the plot to buy the missile. Charges were dropped and he was released due to insufficient evidence. The other three men were all convicted and sentenced to five years in jail.
McCann also operates S. McCann Contracting Inc., which does maintenance jobs at Local 183 housing projects other than the Duncan Mills co- op, and also does work at the union's other properties.
Burren Enterprises, which is operated by Cassidy, also does work at Local 183's housing projects.
A copy of a March, 1993, invoice from S. McCann Contracting to Local 183 shows it was paid $492.20 for ceiling repairs at the union's headquarters on Wilson Ave. in North York.
Before Cassidy created Burren Enterprises in 1992, he operated a company called Monclare Construction, along with a partner. Monclare, which used the same York Mills Rd. mailing address as S. McCann Contracting, was paid for dozens of small jobs at the Montevideo building in 1991 and 1992.
Hawkins said that Burren Enterprises "did one contract" for painting at the Duncan Mills co-op, and was the low bidder for the job. But Hawkins said he didn't know how much Burren was paid for the work. He said decisions on who does small maintenance jobs are left to McCann.
Doug Felice, who replaced Reilly last December as chairperson of the non- profit management board, said since he took over, all work done at Local 183's housing is to be tendered with a minimum of three sealed bids.
Local 183's problems began last fall, after The Star detailed how its employees renovated the home of a federal bureaucrat who helped the union's training centre obtain the $1.6 million grant for computer training.
Tony Dionisio, Local 183's president and heir-apparent to Reilly as union boss, has been charged with offering a secret commission. Former training centre boss John Colacci was also charged with offering a secret commission.
Eric Ferguson, a manager of industrial adjustment services with the human resources department, is charged with defrauding the government.
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