CANADA

Dangerous liaisons

An Ontario inquiry hears a key witness

PAUL KAIHLA October 16 1989
CANADA

Dangerous liaisons

An Ontario inquiry hears a key witness

PAUL KAIHLA October 16 1989

Dangerous liaisons

CANADA

An Ontario inquiry hears a key witness

The two women were once co-workers and allies in one of the nation's most venerable charities, the National Coun cil of Jewish Women. But when Patricia Starr and Betty Stone faced each other across a stark white room on the 21st floor of a Toronto office tower last week, the mood was icy. The setting was a provincial judicial inquiry into relations among the 46-year-old Starr, some Ontario politicians and the giant Toronto-based devel~ opment firm Tridel Enterprises Inc. Starr's activities as president of a charitable founda tion within the organization's Toronto chapter between 1985 and 1989 are at the heart of the investigation into allegations of improper politi cal donations. And Stone, who was the organi zation's executive director until Starr fired her in 1987, provided the inquiry with recollections that were stunningly direct. According to the 65-year-old Stone, thousands of dollars were channelled from Tridel through the personal chequing accounts of National Council staff and members to provincial and federal politicians. "We were immediately reimbursed by the

Toronto section [of the National Council],” Stone testified. “We were told that the Toronto section would be reimbursed by a Tridel company.”

Starr’s lawyer, Peter West, repeatedly objected to Stone’s testimony, saying that she had a personal grudge against Starr because of her firing. But Ontario Appeals Court Justice Lloyd Houlden, who is conducting the inquiry, allowed Stone to go ahead, and, for two days, she drew an unflattering picture of Starr’s operating procedures. Providing the first moments of high drama since the hearings began on Sept. 18, Stone said that Starr was a “domineering” boss whom subordinates nicknamed Papa Doc, after deceased Haitian dictator François Duvalier. Said Stone: “She could be insulting, intimidating and harassing.”

The inquiry was sparked by the resignation last June of one of Premier David Peterson’s most trusted aides, Gordon Ashworth, 39, executive director of the premier’s office. A shaken Peterson ordered the Houlden investigation after Ashworth admitted that he had

accepted a free refrigerator and paint job for his house from a Tridel-related company. According to Ashworth, Starr had arranged the gifts. Starr herself had resigned in June from her $l,680-a-year job as chairman of Ontario Place, a Toronto recreation centre owned by the provincial government, after reports surfaced of improper political contributions from the National Council fund. And in a cabinet shuffle in August, Peterson removed five ministers whose names had been linked to Starr and the Toronto chapter’s activities. Peterson pledged that the Houlden inquiry would “get to the bottom” of the affair.

But last week, Stone’s most explosive assertions had little to do with Ashworth. Rather, they dealt mainly with Tridel—whose president, Elvio Del Zotto, is head of the Ontario wing of the federal Liberal party. Stone testified that Starr routinely asked up to 20 National Council executive and staff members to make out personal cheques to politicians. Stone said that the women were reimbursed by Starr from a Toronto-chapter bank account. In turn, Stone added, a Tridel

company reimbursed the National Council for the payments. “I periodically checked with the [National Council’s] bookkeeper to see if this had taken place,” Stone said, “and it had.” Stone also testified that Tridel often paid for National Council fund-raising events, paved the organization’s parking lot and, on several occasions, threw parties for its members. For his part, Tridel senior vice-president and general counsel Martin Applebaum said that the company would respond to the allegations at the inquiry, where he promised to conduct a vigorous cross-examination of Stone—scheduled for this week.

Stone and Starr—who attended the inquiry on most days as a spectator—have not always been at odds. Stone, who worked for the National Council for 26 years, said last week that she had supported Starr’s nomination as president of the Toronto section in 1981. But, according to Stone, things started to turn sour in 1986 when Starr began mixing politics with the previously apolitical organization’s other activities. Stone said that Starr “sort of forced” her to make four political donations totalling $750. But, Stone added, she refused to continue the practice in 1987. Stone presented the inquiry with receipts for tax credits that she had claimed for the donations, even though the charity had reimbursed her for the contributions. Acknowledged Stone: “I made a profit.” Among the recipients of Stone’s donations were Liberal MPP Christine Hart, now Peterson’s culture and communications minister, and the local Liberal association in the Toron-

to-area riding held by Monte Kwinter, now minister of industry, trade and technology. Another former National Council executive, Denise Bagley, supported Stone’s version of events when she later took the stand. Bagley testified that she had also been reimbursed by the charity for political contributions she had made at Starr’s request.

Stone also told the commission that, despite Starr’s abrasive style, she was popular with many National Council members. “They thought she was a golden girl,” said Stone, “because she would bring untold riches to our organization, and we wouldn’t have to fundraise anymore.” Indeed, Starr evidently cultivated her relationships with well-heeled executives and senior politicians alike. Stone said that Starr was in daily contact with Tridel vicepresident Mario Giampetri, who often picked Starr up for lunch appointments in a Cadillac. Even more troubling to Stone was Starr’s growing acquaintanceship in the inner circles of Peterson’s government. Stone said that, in addition to Ashworth, Starr was in frequent touch with Peterson’s former principal secretary, Her shell Ezrin, former revenue minister Bernard Grandmaitre and former culture and communications minister Lily Munro. Recalled Stone: “Our girls were always making reservations for [Starr] at the II Posto restaurant for luncheons with Ezrin, Ashworth and other politicians.”

And Stone said that, for.her part, she soon found herself on a collision course with Starr. In early 1987, she said, Starr thwarted her attempts to investigate several large, poorly accounted-for transactions involving National Council funds—including a $426,000 investment in federal treasury bills. Stone also accused Starr of orchestrating her dismissal from her job in June, 1987. Two months later, Stone sued Starr, along with the National Council’s Toronto chapter and its president, Nita Goldband, for wrongful dismissal. The suit was settled out of court the same year, with Stone receiving legal costs, enhanced pension benefits and about $58,000 in lost salary. “I got my monetary reward,” said Stone, who is now retired. “But the wonderful organization I worked for is now in shambles.”

For her part, Starr declined to respond to Stone’s allegations, saying in an interview only that she “hopes that people will be patient enough to wait to hear the other side before getting carried away by all this.” But in court documents filed in response to Stone’s 1987 lawsuit, Starr said that Stone was dismissed because she was not performing her duties competently.

Clearly, the affair has taken its toll on Starr. She had been appointed to the chairmanship of Ontario Place by Peterson himself in May, 1987, and had been widely praised for her management of the facility. But three months ago, Ontario public trustee Hugh Paisley ordered Starr and two other directors of the National Council’s charitable foundation—Goldband and Lesley Miller—to repay more than $64,000 drawn from the foundation’s accounts for political donations

that an audit showed Starr had authorized. Paisley also ordered the three women to pay both the costs of his investigation and more than $100,000 in National Council legal fees. Starr’s friends said last week that she was suffering from the torrent of negative publicity resulting from the affair. Said one Starr intimate, who requested anonymity: “She is a

tough lady, but she is being maligned every day, and it’s hard on her.”

The affair has cast its shadow over other individuals linked to Starr, among them the five ministers shuffled out of Peterson’s cabinet. As well, Del Zotto has seen his stewardship of the federal party’s Ontario wing thrown into question. At a Liberal riding association fund-raising event in Mississauga, Ont., two weeks ago, there was audible laughter in the audience when the master of ceremonies welcomed the developer with the words: “He has had a big

impact on our party.” For his part, Del Zotto has declined to comment on the affair.

On the other hand, the Starr inquiry may be helping some other political careers. Lawyer and Liberal activist Howard Levitt, who represented Stone in her lawsuit against Starr and is doing so before the commission as well, said that he will likely seek the party nomination in the downtown federal riding of Trinity Spadina—currently held by the NDP’s Dan Heap— in the next general election. “He has got a lot of publicity from the Patricia Starr affair,” said Michael Chan, a riding association executive.

Meanwhile, Stone did not link only provincial politicians to Starr. She also testified that Starr claimed that federal Employment and Immigration Minister Barbara McDougall intervened to reverse a Revenue Canada decision denying charitable status to the National Council foundation established by Starr, Goldband and Miller. A year after the foundation was set up in 1985 to operate a nonprofit housing project, Starr applied to Revenue Canada for charitable status for the foundation. The application was rejected on the grounds that the group did not plan to rent apartments in its project exclusively to needy tenants. According to minutes submitted to the commission by Stone, Starr told a National Council meeting on Oct. 6,1986, that she had asked McDougall for help in overturning the ruling. “Patti spoke to Barbara McDougall, who in tum will speak to [then-Revenue Minister] Elmer Mackay,” the minutes read. Four months later, the foundation received its charitable status for its 160unit apartment complex—built by Tridel. “The charitable foundation has received its charitable tax number thanks to the Honorable Barbara McDougall,” according to the minutes of an organization meeting in January, 1987.

Evidence earlier in the inquiry had shown that Starr donated $880 of that foundation’s money to McDougall’s 1988 election campaign. Inquiry records also show that the campaign received a separate $200 cheque signed by Starr directly from a Toronto-chapter bank account. Since then, McDougall has returned the money to the charity. And, reached in Ottawa, McDougall’s chief of staff, Ruth Archibald, said that the minister’s involvement on behalf of the Starr foundation had been limited to “an inquiry into the status of the charity’s application.” Added Archibald: s “I suspect it will be clarified as the inquiry o moves on.”

Still, there was little indication that the Starr affair was damaging Peterson’s reputation. A poll released in July by Environics Research Group Ltd. found that his Liberals retained the support of 45 per cent of decided voters, compared with 29 per cent for the Conservatives and 25 per cent for the New Democrats, the official Opposition. But the inquiry still has to hear from dozens of additional witnesses and will likely continue into the new year. It is not until then that the key player in the affair, Starr herself, is expected to take the stand and reply to Stone’s startling disclosures.

PAUL KAIHLA