The Indemnification By-Law – The Biggest Deception Yet? (2-52)

Oh! what a tangled web we weave
When first we practice to deceive!
(Walter Scott)

Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years who influences or attempts to influence a municipal official, by deceit, to vote in favour of or against a measure, motion or resolution.
(from Criminal code sections 123 (1) and 123 (2))

An indemnification by-law was introduced in the December 4 agenda package. In the December 4 agenda and in the December 4 council meeting there was discussion of the proposed indemnification by-law. The proposed by-law is on the December 18 agenda for first second and third (final) reading.

In the discussion of the draft by-law there has been a lot of “influencing by deceit”.

The draft by-law is not standard as claimed by Ms. Cathrae

In Ms. Cathrae’s December 4th report she indicated:

“Our solicitor has indicated that it is standard in his practice to see that municipalities, local boards, private business, industries and interest organizations have indemnification by-laws for the protection of their employees and volunteers.”

This alone may not be deceit. But in the meeting Ms. Cathrae also indicated that the draft by-law is similar to that of Toronto and Kingston and many others.

The implication is that it is standard practice to have indemnification by-laws like the one presented by Ms. Cathrae.

The “Cathrae draft” is not standard practice at all. It’s nothing like standard practice.

Toronto it is true self insures along with purchased insurance. But Toronto does not have different rules for the self insured part as it does for the purchased part. The truth is that neither Toronto nor Kingston has different rules. Nor anyone else.

The City of Toronto insurance is not even close to the Cathrae draft. Nor is the Kingston policy even close.

Ms. Cathrae says “Our solicitor has indicated …..”. But of course we don’t get to see what the solicitor actually indicated, so we don’t know who initiated the deception. But even if the solicitor made the deception, Ms. Cathrae is still guilty for trying to pass it off as the truth.

The lie was outrageous and intentional deception.

There was another deception in the December 4 council meeting regarding duplication.

When asked by a councillor why we needed the indemnification by-law when we already have errors and emissions insurance Tracey Neifer responded that the purchased policy is for some situations and the bylaw insurance is for others. She declined to elaborate, saying that the details were for “closed”.

This was an outrageous deception.

In fact the by-law is designed to provide coverage where the purchased policy will not.

And Ms. Neifer could have and should have said so.

By not saying so Ms. Neifer deceived council into supporting the indemnification resolution.

Claims adjuster is not arms-length

All communities have insurance to cover employees and council members. Some larger municipalities, like Toronto and Kingston, who can handle fairly large claims, have very high deductibles, making them almost fully self-insured. But regardless of whether they are insured by an insurance company or whether they are effectively self-insured through a very high deductible amount, all claims must go through a third party, that third party being a claims adjuster.

This means that in Toronto and Kinston and everywhere else (except TSBP) the people making the claims (the councillors, employees, volunteers) are at arms-length from the people deciding whether the claims are valid (the adjusters). And that’s the way it has to be.

But the Cathrae by-law is different. The Cathrae proposed by-law has the same people that file the insurance claims, namely councillors and senior staff, deciding whether the claims are valid, and deciding whether the claims should be accepted.

Section 3 of the Cathrae draft says that councillors, employees, and volunteers and even past councillors employees and volunteers will be covered if:

“(a) he or she acted honestly and in good faith with a view to the best interests of the Town;
(b) he or she had reasonable grounds to believe he or she was acting in accordance with any applicable policies of the Town; and,
(c) he or she had reasonable grounds to believe that his or her conduct was lawful.”

There is nothing really wrong with the three criteria in sections 3 (a), (b), and (c).

They are a bit looser than our purchased insurance policy, which says more clearly that intentional acts are not covered. But it’s workable.

But guess who decides whether the three criteria are met? Guess who decides whether the people asking to be indemnified, and making a claim for money, were “acting honestly and in good faith”, and were “acting in accordance with applicable policies”, and believed their “conduct was lawful”.

Council decides. Or senior staff. Or both.

The very people making the claim for the peoples’ money from the treasury are the ones who decide whether their claim to the peoples’ money is valid and legitimate. The very people who may be breaking the rules are the ones who decide whether they will be insured.

The very people who may be breaking the rules are the ones who decide whether they will bear any consequences arising from their breach of the rules.

The very people asking to be indemnified are the ones making and passing the by-law giving themselves the dual role of potential claimants and claims adjusters.

The fox is minding the chicken coop.

That’s not arms-length. That’s a recipe for corruption and fraud.

That’s complete lack of control.

This is not standard in Municipalities.

This is not done in any insurance situation.

To say that the Cathrae proposal of non-arm’s length claims adjusters is standard when it is not is a gross deception.

The by-law covers those found guilty

In the December 4 meeting Councillor Jackson indicated that council had earlier agreed that the indemnification by-law should say that if some one accused is found guilty then the proposed indemnification by-law should say that they are not covered.

Ms. Cathrae responded by saying that the draft policy reflected that, and she read from a draft policy that she had in front of her.

But Ms. Cathrae was not reading from the draft by-law at all. She was reading from a second document that she had prepared to answer the anticipated question. She pretended she was reading from the draft proposed indemnification by-law, but she wasn’t. The words she read were not even in the draft.

Even though the deception was very obvious, no council member caught it, or at least no council member said anything. All council members had the proposed indemnification by-law right in front of them, and Ms. Cathrae was reading from something completely different, and not one councillor noticed.

But no matter that all of our representatives were asleep.

It was still deception.

Ms. Cathrae a few minutes later confessed that she had “mistakenly” read from a different version of the draft bylaw than the one that was in the agenda and before council and the public. But then she said that the version in front of councillors and in the agenda package was in substance the same as the one she had “in error” read from.

In fact all of the stuff Ms. Cathrae read from her special version about legal costs not being covered if a claimant is found guilty are absent from the agenda version.

Her claim that the two versions were in substance the same was a lie. A gross deception.

The by-law in fact does allow for some payments even if the claimant is found “guilty”.

If the issue is criminal, the bylaw does not cover settlement cost, fines, or court costs (the other party’s legal fees). But the accused’s own legal costs are not excluded from the by-law coverage, and are thus covered. Same with Municipal conflict of interest.

And for anything else, all cost are fully covered even if found “guilty” as long as the adjusters (themselves) are willing to say it was good faith and they didn’t know it was illegal, even if what they say is untrue (discussed above).

Ms. Cathrae deceived council again.

So we have a draft by-law that:

1. Has a different rules for the self insured by law coverage than the purchased insurance coverage.

2. Has no arms length control and as such is ripe for fraudulent claims at great and unwarranted benefit to claimants and at great and unwarranted expense to the taxpayers.

3. Improperly pays legal costs under many conditions even if the claimant is found guilty.

Any one of these should be sufficient to send the Cathrae draft straight to the shredding machine.

The three reasons together suggest that the draft should be shredded and those “practicing to deceive” should be held to account for their deeds, including trial for municipal corruption should the courts so decide.

The truth is we don’t need an indemnification by-law for any legitimate or proper purpose. Certain council members and certain staff need it so they are shielded from the consequences of their malicious bad acts.

Payment of legal fees regarding conflict of interest proceedings.

There is an issue that is not a by-law issue but is closely related and should be dealt with along with the draft by-law.

It’s regarding proceedings under the Municipal Conflict of Interest Act.

The Act is very clear. The town cannot pay a council or board member’s legal costs unless and until a court finds that the accused did not contravene section 5 of the Municipal Conflict of Interest Act.

Rob Ford was accused under the act. The city of Toronto could not and did not pay Rob Ford’s legal fees.

In contrast, the legal fees for all seven named in Municipal Conflict of Interest Act proceedings in TSBP have their legal fees paid fully by the taxpayers. Those named include councilllor Turner and Mayor Close.

The law is very clear. The town is prohibited from paying.

The purchased insurance policy is very clear. The insurance company will not pay unless and until a finding of “non-contravention” (like a finding of innocence) is made.

The town is illegally paying Close’s and Turner’s legal fees, and also several others. With taxpayers’ money. And to make it worse, up until recently council did not even know or authorize the taking of taxpayer’s dollars to pay Close’s and Turner’s legal fees.

Resolution 792 from November 23 sort of made council aware and authorized it. It reads:

It was MOVED by P. McKenzie, SECONDED by J. Kirkland and CARRIED …. THAT the Council of the Town of South Bruce Peninsula supports the indemnification and support of members of Council, committees, local boards and employees in the defense of legal claims and actions commenced;
AND FURTHER THAT an indemnification by-law be presented to Council for consideration”

In summary, we have a bad and unnecessary draft indemnification by-law and we have council illegally paying legal fees related to conflict of interest proceedings.

Why are they doing these things that are so wrong and are so unfair and unjust to the taxpayers?

Here’s a theory presented by a fellow resident:

1. A certain group of council members feel that now that they are elected and are in power, they can do anything they bloody well please, including helping themselves to the treasury, and including attacking any resident who dares to criticize.

2. Certain staff and volunteers and former council members, staff, and volunteers who are connected to those particular council members also feel that they can do anything they bloody well please.

3. These people have completely lost sight of their duty to the public, and instead of putting the public first they have put themselves first. For the worst of them, the public is the enemy.

4. These people have no regard for the law, and place their own “rules” above the law.

5. Several residents have complained that the abuses are not right.

6. The bad council members and their accomplices didn’t like that.

7. So the bad council members, and notably John Close, branded the residents who complained about the abuses as “blights on society” and “criminals”.

8. Then the bad council members told former CAO Rhonda Cook that if she sued the residents identified by them as “blight” and “criminals”, for defamation, the town would pay her legal fees and cover any costs assigned to her.

9. And CFO Tracey Neifer went around to committees and told them that if they are sued by a citizen not to worry because the town’s purchased insurance will cover it, completely failing to mention that there is no insurance coverage if a volunteer intentionally harms a resident (for example defamatory slander). She was encouraging committee members to intentionally slander and libel those residents that she and others consider to be “blights” and “criminals”. (I think she includes me in both categories.)

10. But something happened that the bad council members and bad staff did not anticipate.

11. Instead of Rhonda’s lawsuit shutting the residents up (as they anticipated), some of the residents turned and fought back.

12. For example, a counterclaim, still outstanding, was filed against Rhonda for several hundred thousand dollars.

13. I filed commencing proceedings (not lawsuits) against Jim Turner, John Close and several local board members under the Municipal Conflict of Interest Act.

14. I filed applications to the courts to quash two by-laws.

15. I sued a committee member for defamation.

16. There are several more commencing proceedings against the town and or council members or staff or committee members, by me and by others.

17. John Close was charged with obstruction of justice, a criminal offense.

18. And I expect that there are many more in the making that I don’t yet know about.

19. There is a cesspool of corruption lurking just below the surface at town hall.

20. Every day that cesspool of corruption becomes a little more visible to the public.

21. The sole purpose of the Cathrae draft indemnification by-law is so that bad council members and bad staff members can make war on any resident that exposes their bad actions and maybe takes them to court, and to make war using the residents’ own money to oppose those residents, and to make war using the residents’ money in the defense of the bad council members and staff.

22. The purpose f the by-law is to pay Rhonda Cook’s defense of the $500,000 lawsuit against her for defamation. The draft by-law would cover her legal costs and any settlement. It could cost taxpayers $700,000.

23. The purpose is to cover the defense of any council member, staff member or volunteer against a lawsuit for damages for intentional defamation of a resident. That’s covered too by the draft by-law. Cost to the taxpayers? – Unlimited. It could be millions.

24. The purpose is to cover the defense against conflict of interest actions. That’s being paid for by taxpayers too even though it’s illegal and is not covered by purchased insurance. Cost to taxpayers. Unlimited.

Staff are not the town, council is not the town, and John Close is not the town.

We the inhabitants are the town.

As the inhabitants, we deserve and are entitled to by-laws and resolutions that are made for our benefit, not the benefit of council and staff to our detriment.

The indemnification by-law will come up on December 18.

Council needs to defeat it.

Council also needs to make a resolution to stop paying legal fees associated with Municipal conflict of interest proceedings.

We the inhabitants of the Town of South Bruce Peninsula have a web of laws to protect us from the bad actions of corrupt officials.

We are entitled to the protection of those laws.

Council must get the insurance by-law defeated and the conflict of interest legal fees stopped or we will have no choice but to ask the courts for more help.

We need people to attend council meeting and watch for and report deceptions, lies and other bad actions.

I cannot attend meetings. I am banned from town hall. I am banned from all meetings wherever they are held.

To be clear, I was not banned because of some recording device issue. That was a pretext, a complete red herring.

I was banned because “they” believe that every time I attend a council meeting I get more evidence of the massive scale of corruption at town hall.

They banned me to try to stop me from getting and using that evidence.

Their strategy has backfired. Council and committee meetings are still being recorded by others, and are being sent to me almost in real time. So it’s almost as good as being there. And because I am spending a lot less time travelling to attend council and committee meetings, I have a lot more time to do research and to write exposes of their lies, their deceptions, and their nefarious actions.

And I have more time to blow the whistle (ask the courts for assistance).

I saw her today at the reception,
In her glass was a bleeding man.
She was practiced at the art of deception,
Well I could tell by her bloodstained hands.”
(You can’t always get what you want, Rolling Stones)



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3 Responses to The Indemnification By-Law – The Biggest Deception Yet? (2-52)

  1. yabder4 says:

    Okay, so I’m disgusted at this bylaw. What can I do to have it quashed? The Councillors will vote for it to cover their asses then mount a full out attack. What’s our reasonable next step?

    • cgammie says:

      Yabder 4:

      I think the bylaw is illegal because is soon as the bylaw is passed the town is insuring contrary to section 14 of the municipal conflict of interest act. Section 273. of the Municipal Act says “(1) Upon the application of any person, the Superior Court of Justice may quash a by-law of a municipality in whole or in part for illegality. ”

      So we need to apply to the courts. It’s not free. And it carries risks.

      A better strategy might be an e-mail campaign telling councillors how repugnant the by-law is. Others have already e-mailed council.


    • riddlerray says:

      Here’s a letter about the TSBP indemnification by-law as submitted to the editor of the Owen Sound Sun Times by Randy Rogers.

      Get Out of Jail Free


      On Tuesday, December 18, 2012, The Town of South Bruce Peninsula council
      will be discussing, and likely passing, indemnification By-Law 145-2012.
      The By-Law should be read in its entirety and can be found on the Town’s web
      site here:

      Section 2 of this By-Law speaks to not indemnifying “the payment of any
      damages, fines or costs awarded by a Court or agreed to by settlement of an
      action or other proceeding” for guilty convictions under the Criminal Code
      or Municipal Conflict of Interest legislation. However, there is no mention
      of not indemnifying the legal and other costs that lead to a conviction; if
      found guilty the guilty party should assume all responsibility, not the
      residents of the Town.

      I am not a lawyer and don’t know if there are things outside of the Criminal
      Code and Conflict of Interest legislation for which a person can be charged
      and fined, but if there are (and there must be or else why would this By-Law
      even be needed), Section 4 of this By-Law seems to say… “If found guilty,
      a person covered by this indemnification, would suffer no consequences for
      their actions and the rate-payers of the Town would have to pay”.


      I can understand, and agree, that it makes sense to insure employees,
      volunteers, and elected officials who may have charges brought against them
      by the public. The charges might have no merit and the cost burden on a
      non-insured person might be prohibitive. But, when all is said and done, if
      the insured is indeed found GUILTY of the charges, then they should have to
      reimburse the municipality and pay their own costs and fines.

      In Section 16, the Town waives their rights to seek recovery from any
      employee, volunteer, or councillor if “he or she had reasonable grounds for
      believing his or her conduct was lawful”. Since when did ignorance of the
      law become a valid defense? And, who do you think decides if the provisions
      of this section apply? If you guessed the council itself, then you are
      correct. Kind of like the police policing themselves; it doesn’t work.

      I have written to my councillors and have asked for, but not yet received, a
      few examples of the types of situations in which someone might be
      indemnified by this By-Law; I am trying to understand the plain language
      ‘true intent and meaning’ of the By-Law.

      If passed, will this By-Law indemnify those that currently have proceedings
      in court?

      Is it a conflict of interest to discuss and vote on this by-law if you are
      currently involved in litigation which might be covered by this By-Law?

      And finally, how is it that this By-Law can have 1st, 2nd, and 3rd reading
      in one meeting without any opportunity for public discussion or input during
      that council meeting?

      Randy Rogers

      Town of South Bruce Peninsula

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