PRIVATE SESSION of city council convenes tomorrow to consider proposals for an out-of-court settlement between the city and a firm that got the better of city officials in negotiating a lease deal for computer equipment.

The city has a fairly weak case against MFP Financial Services. Anything it gets is a bonus. But at what price?

Mayor Mel Lastman should reject any deal that short-circuits the city's investigation into how the deal came about. And he should not advocate a position that forces the city to bury the details of the MFP deal, no matter whose political and professional reputation the facts may sully.

Some Toronto city councillors are itching to launch a public inquiry to uncover exactly how the computer leasing deal cost taxpayers $13 million more in interest payments than city councillors say they approved.

The inquiry is an attractive option because it would do more than deconstruct the MFP deal; it would lay bare the inner workings of a city government that's in grave need of repair, maybe even reform.

But an inquiry may be premature. The city would need to show malfeasance or breach of trust, either on the part of politicians or city staff — issues that are still not settled.

What we've discovered over the past six months is that Toronto has been operating on skeleton finance staff, without proper management controls, and essentially courting disaster as it grappled with the impossible task of amalgamation, Y2K, downloading of services from the province, a new tax system and a massive new budget of nearly $6 billion.

Three senior city staff members responsible for finalizing the MFP deal have been entertained at Toronto Maple Leafs hockey games, as MFP's guests. As well, they appeared on an MFP Web page, endorsing the firm's virtues.

There are enough innuendoes floating around city hall and among Toronto residents to fuel several mystery novels. But even if one puts the most charitable spin on the MFP deal there are enough reasons to seek a public bloodletting.

We know that Toronto opted to lease, rather than buy, its desktop computers, starting in 1999.

The city thought it advantageous to have MFP provide the financing for the lease, in a deal that city staff told them was the best of six private sector offers.

Something went wrong. The anticipated interest rate almost doubled in some cases. The number and value of the computers jumped to more than $80 million even though the staff report supporting the deal mentions only $43 million. How did this happen? Did staff exceed their authority? Was the city bamboozled? Is there fraud? Was city staff bought? Has there been any criminal wrongdoing?

The majority of the principals in the lease are no longer in the city's employ and only through their good graces can they be relied on to answer questions. A public inquiry would unlock closed lips.

For example, Tom Jakobek was the budget chief then. Dick O'Brien was in charge of overseeing the Y2K problems. Both councillors have quit politics.

Chief administrative officer Mike Garrett was forced out earlier this year in a messy and costly severance. As the final gatekeeper, he was supposed to catch problems that his eager staff somehow overlooked. He didn't. But he's not here to explain why.

Reporting to Garrett was treasurer and chief financial officer Wanda Liczyk. She had to sign off on all financing and interest payments and lease terms and agreements. There are many questions about the financial guts of the deal. But Liczyk cannot be called on the floor of council to explain what she did. She's moved on to Toronto Hydro.

If the finance staff didn't catch the problems, city solicitors were supposed to. But they didn't. In fact, a comfort letter sent to MFP states, in clear terms that even a lay person can understand, that the MFP deal was just fine, legal and binding, and entered into by city staff duly authorized to execute the agreement. It was signed March 15, 2000 by chief solicitor Ossie Doyle, who sat at his last council meeting Dec. 6 and is retiring.

Jim Andrew, the head of the information technology department, the group expected to provide the city with expertise about the equipment it needed, has left the job for one at the province.

Lana Viinamae, former project director for the city's Y2K program, is the only one of the principals still in the city's employ, has been asked to stay off work, on paid leave, presumably until the issue is settled.

Citizens and the vast majority of the hard-working city hall staff want to know all of what happened, who is responsible and why it happened.

That information is not for sale.

In considering the out-of-court settlement, council and Lastman must secure the option of pursuing court action, a public inquiry, or any other procedure that sheds light on this sordid affair.

The Star

-- Anonymous, December 26, 2001