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Chadwick faces questions from inquiry on conflict of interest

Chadwick had an unwritten contract with Compenso Communications and did declare a conflict of interest on a Collus share sale decision one time, but not in other cases
Ian Chadwick, a former councillor in Collingwood and one of the witnesses in the judicial inquiry this week. Erika Engel/Collingwood

A former councillor at the time of the Collus share sale in 2012 faced questions during yesterday’s judicial inquiry hearing about his employment by Paul Bonwick before and after the sale,.

Ian Chadwick was on the witness stand yesterday afternoon (May 1) for examination by judicial inquiry lead counsel Kate McGrann, and some cross-examination by the town’s lawyer for the inquiry Will McDowell.

Chadwick had a contract with Compenso Communications Inc., owned by Paul Bonwick, beginning in the summer of 2011 and extending to December that year for work that included a weekly news-scan for articles, editorials, and blogs pertaining to the energy sector.

At the time, Bonwick – through Compenso – had a contract with PowerStream, the terms of which included a promise by Bonwick to gather and deliver information to PowerStream via his network of contacts in “municipal leadership.”

PowerStream ended up being the successful bidder in the 2012 Collus share sale.

Chadwick testified he was paid by Compenso, and he knew PowerStream was one of Bonwick’s clients.

“All the work I was doing was for Compenso,” said Chadwick. “What (Bonwick) did with it and how it was used by anybody else, I do not have any knowledge of.”

On Dec. 5, 2011, council meeting minutes show Chadwick declared a pecuniary interest regarding an in-camera discussion on the Collus Strategic Partnership RFP review.

During that in-camera session, Council approved a motion directing the Collus Board to continue negotiations with PowerStream Inc. as the preferred proponent.

Chadwick said he declared a conflict because of his work with Compenso at the time, and he said there was a potential for PowerStream to be one of the bidders. Chadwick said he didn’t know PowerStream submitted a bid until five or six weeks after the Dec. 5 meeting.

McGrann asked why Chadwick didn’t ask Bonwick if his client, PowerStream, would be bidding.

“Because the information was confidential,” said Chadwick. “I’m not supposed to find this out another way … Council made a decision that once that decision was made, I had to stay out of it while I still had a pecuniary interest.”

McGrann asked what would be the harm in asking Bonwick or PowerStream if they were bidding.

“Well … that might be wonderful to have 20/20 hindsight to determine that but, at the time, I did not think it was appropriate,” said Chadwick.

In council meetings in January, further discussions on the sale took place, including a negotiation update by Ron Clark, lawyer with Aird and Berlis. Chadwick did not declare a conflict at these meetings.

“As I read the Municipal Conflict of Interest Act, since I was no longer working for anybody who had any sort of interest, I no longer had a direct or indirect pecuniary interest,” said Chadwick.

He said he completed his final work in December, 2011. He had asked Bonwick if there was any more work available on Jan. 4, 2012, but said he didn’t recall hearing back from Bonwick.

At a Jan. 23, 2012 council meeting, council voted in favour of the deal with PowerStream after a presentation by Ed Houghton, president and CEO of Collus, and a few others including PowerStream president Brian Bentz.

During the meeting, records show Chadwick emailed Bonwick to say he was at council and to ask if the two could chat the next day. Bonwick responded at 5:11 p.m. saying “I was going to ask you to speak to industry trend and leading the way. You likely know more about the industry than others at the table.”

At 5:49 p.m., Chadwick made a statement saying he had been tracking the “political winds” regarding Ontario’s energy situation and noted a strong trend toward consolidating energy source-services.

“It made sense for us to be looking for strategic partners before we were put in the position of having to take one, that way we would be able to get a better partner and a better situation,” said Chadwick during the council meeting.

He told McGrann he couldn’t recall if he read Bonwick’s email before or after he made the statement.

McGrann asked if his correspondence with Bonwick had an impact on his choice to speak at the council meeting.

“No it wouldn’t because, as I said, I had been in favour of the process and in favour of making a decision for a strategic partner all the way along,” said Chadwick.

Chadwick was again hired by Compenso on Jan. 28 for similar work as he had done in the previous year.

“Could you understand why someone looking on this may have concerns or questions about whether there was an impact on your decision?” asked McGrann.

“I can now, yes,” said Chadwick.

Chadwick said he read the Municipal Conflict of Interest Act and understood it indicated those who are currently employed have a conflict. In his mind, that didn’t include past employment.

The vote that took place on Jan. 23, 2012 was on a motion that read council would receive the staff report on the matter and enact a bylaw that would execute the agreements for the sale of 50 per cent of the shares of Collus to PowerStream.

The motion was carried with no recorded conflicts declared. A second motion - done by recorded vote - enacted the bylaw. Chadwick is recorded voting yes.

Chadwick said the vote was “to approve what council had approved previously in camera” and therefore did not constitute making a decision for the sale.

“If the decision had been to approve the sale specifically, I would have declared a conflict, but to approve a council decision that’s already been made is, in my mind, a different kind of vote.”

The inquiry hearings continue today with former deputy mayor Rick Lloyd back on the witness stand this morning.

Chadwick could also return to the stand for more cross-examination today. The hearing is from 9 a.m. to 1:30 p.m. today and will take place in the town hall council chambers and will be live-streamed by Rogers TV and online here.


Erika Engel

About the Author: Erika Engel

Erika regularly covers all things news in Collingwood as a reporter, photographer and community editor.
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