RCMP charge Coun. Joe Magliocca with fraud, breach of trust | #phishing | #scams | #education | #technology | #infosec

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Coun. Joe Magliocca, currently running for re-election in Ward 2, has been charged with fraud and breach of trust after an RCMP investigation.

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Magliocca’s expenses have been the subject of a police probe since last August, after Postmedia reporting on irregularities in the councillor’s spending led to an independent forensic audit, the results of which prompted city council to refer the issue to police.

In total, the councillor was found to have inappropriately expensed more than $9,000 over the current term, including ineligible flight upgrades and “hosting” expenses for meals and drinks with people who say they never met with him. In a 2018 incident, Magliocca billed the city for a hotel stay to attend meetings that auditors couldn’t determine ever took place.

Magliocca, 56, has repaid the expenses that were ineligible. But he has largely refused to explain what happened, only saying that he never intended to make “errors” in following council expense policies.

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An RCMP statement Friday says the Alberta RCMP Federal and Serious Organized Crime/Financial Crimes unit conducted a “complex investigation” into the matter.

Magliocca faces one count each of breach of trust and fraud under $5,000.

He is to appear in court Oct. 15 — just three days before the municipal vote. The incumbent Ward 2 councillor announced his bid for re-election last month, a few days before the deadline to submit nomination papers. There are five other people running for the Ward 2 councillor seat.

Magliocca’s lawyer Greg Dunn said in a statement that the timing of the charges, announced 10 days before the civic election, “reeks of political motivation.”

“This is a civil matter involving an unintentional mistake of less than $4,000.00 for which our client has already voluntarily repaid,” he said.

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“Our client is innocent and will vigorously contest the allegations.”

In a brief exchange with reporters during a council break last month — the first he’d attended in person in months, since meetings have been almost entirely virtual due to COVID — Magliocca claimed he had been “framed,” but didn’t offer further details. He said he couldn’t tell his side of the story until the RCMP investigation is complete.

Background of the controversy

A Postmedia freedom of information request initially revealed in January 2020 that Magliocca had expensed much more than any of his council colleagues to attend the 2019 Federation of Canadian Municipalities (FCM) conference in Quebec City. Magliocca was Calgary’s representative on the FCM board at the time.

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But many people listed on more than $1,800 in receipts for hosting expenses said they never sat down with Magliocca. In total, Postmedia found 10 elected officials and lobbyists who said or confirmed through spokespeople that they weren’t hosted by the councillor, despite being listed as attendees for meals and drinks he billed to the city.

The forensic audit done by PricewaterhouseCoopers later found additional instances of the same problem in Calgary, Halifax and Penticton, B.C.

Chestermere Coun. Yvette Kind was listed on a $331 bar tab from the 2019 FCM conference, but she denied being there. She filed a complaint with Calgary’s then-integrity commissioner, Sal LoVecchio.

But LoVecchio subsequently had to recuse himself from looking into the issue, because Magliocca had expensed a meal with him, too.

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LoVecchio said the lunch was “purely social” and shouldn’t have been billed to taxpayers. But because he’s supposed to be an independent watchdog for council conduct, he said the lunch could create the appearance that he wasn’t impartial, making it necessary to step back.

With the typical system for handling complaints out of commission, council unanimously voted to request an audit into Magliocca’s spending dating back to the start of the current term.

When that report was delivered in July 2020, city council approved several sanctions against Magliocca: he was publicly reprimanded, directed to take additional expense training and banned from expensing business travel for the rest of his term. He was also told to issue a public apology, which he has not done.

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He did, however, apologize both in a statement and in council chambers earlier in 2020, before the full scope of his expense discrepancies was revealed.

Council also referred the investigation to Alberta’s municipal affairs minister. No one on city council, including the mayor, has the power to dismiss an elected councillor from their position, but the minister can. At the time, former municipal affairs minister Kaycee Madu said he wouldn’t step in, and that council should focus on fixing its own internal spending rules.

Mayor Naheed Nenshi said in a statement Friday that the provincial government should have done more.

“The Province of Alberta refused to take action on this matter and now it’s before the courts, in the midst of an election. We should have been able to take stronger action sooner,” he said.

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“People need to have faith and trust in their elected officials. Councillor Magliocca’s actions also caused the city to do an investigation of all other councillors’ expenses that identified no other wrongdoing.”

The city has now overhauled councillor expense practices.

Alcohol is no longer an allowable expense for for hosting or gifts and there’s a set 20 per cent maximum for a gratuity in any expense that requires it. Alcohol was previously an allowable hosting cost as long as the person being hosted wasn’t a Calgary council member or city employee.

As well, all expenses incurred by councillors must be publicly disclosed. In the past, spending from ward budgets was publicly viewable online, but travel and hosting costs covered under other corporate accounts were not.

Reforms have also been implemented on the council committee responsible for overseeing spending. Now, the city’s chief financial officer is responsible for approving corporate credit card statements, hosting and travel costs — before, the councillor chairing the committee had authority to sign off on their colleagues’ expenses.

masmith@postmedia.com

Twitter: @meksmith