Part 2: The Cortelluccis – questionable deals, philanthropy and the complex world of developers

It was a balmy summer day in June of last year when Susan Fennell took the stand in a courtroom at a stately red-brick courthouse in Orangeville, Ont.

Fennell is a former mayor of Brampton. But by this time, she was a figure of disgrace: she had been voted out of office in 2014 after a series of scandals marred her tenure. A Deloitte audit, ordered by her council foes, found she and her staff had violated spending rules 266 times over seven years. (Fennell later vigorously disputed the findings and threatened legal action against Deloitte.)

Former Brampton mayor Susan Fennell

Over two days on the stand, Fennell’s main interrogator was David Chernos, an inquisitive lawyer retained by Inzola Group Ltd., a Brampton-based developer. Inzola was suing the City of Brampton for $28.5 million, claiming the tendering process for a $205-million city hall expansion contract was biased against them. The trial revealed that Inzola’s bid, disqualified before staff considered it, was $95 million less than the contract eventually awarded to the Dominus Group, whose partners included Fernbrook Homes, a development company controlled by the Cortelluccis — notably brothers Mario and Nick — who are among the most powerful builders in the GTA. (There were no allegations in the lawsuit against Dominus or its partners, and the company maintained it followed all the bidding rules.)

The controversial $205 million Brampton City Hall extension, known as the West Tower

Prior to the trial, for a deposition in 2016, Fennell gave sworn testimony.

Chernos wanted to know about Fennell’s relationship with the Cortelluccis.

"I am asking you whether those two people … Nick Cortellucci, Mario Cortellucci … whether you had met or had any discussions with them in writing, in person, via telephone, prior to, say, August 10, 2011?" Chernos asked Fennell at one point.

"No," she replied.

"Had you either personally or as mayor and through the city, done business with them previously?"

"No," she said.

Fennell’s statements, however, were undermined by documentary evidence produced at trial.

There were communications from Fennell to the Cortelluccis through their office emails. One from 2009 from her city account, addressed to Nick, said "Hi Nick...July is fast approaching and I wanted to personally touch base and request the support of Four Valleys for my 2009 Golf Classic... . May I request that you consider a silver sponsorship (as last year $12,500)" — a reference to Fennell’s annual charity golf tournament.

There was also a 2007 memo from a member of Fennell's staff that had the subject line: "3:00 pm Meeting\Coffee with Mario Cortellucci (to discuss Future Development)." Next to "meeting status," the memo said "accepted." Next to "organizer," it states "Fennell, Susan Mayor."

About six weeks prior to the August 2011 council vote approving Dominus’ bid, during a period when no contact was permitted between officials and bidders, an email sent from Fennell's account showed she had been asked by a Brampton planning consultant to help set up a meeting between Mario Cortellucci and a councillor, with the subject line "Mario Cortellucci – Luncheon Meeting Request." Fennell replied that she didn't know if the other councillor was available, saying: "The discussion with Mario and myself is currently being scheduled."

Fennell testified that she had no communication with either Nick or Mario Cortellucci prior to the 2011 approval vote, saying under oath, “I don’t recall ever having a meeting with Mario Cortellucci.”

Developer Mario Cortellucci

She was shown an email from her staff in January 2010, during the “no contact” period, that indicates Fennell was to call Nick Cortellucci to solicit a contribution for her annual gala and points out that he had donated $50,000 the previous year.

“I don’t recall if he was called or not,” she testified.

During the Inzola trial last year, a council transcript from 2011 brought into evidence showed Fennell chaired a meeting where Fernbrook’s involvement in the Dominus bid was mentioned a dozen times.

Yet Fennell had said publicly through her lawyer before the trial that she didn’t  know the Cortelluccis were associated with the bid.

At the trial, she testified she did not know Fernbrook was part of the team or that Nick Cortellucci had an interest in Fernbrook.

That’s not what she told an investigation in 2011.

After her vote, a complaint was filed with Brampton’s integrity commissioner by Chris Bejnar, the co-founder of a citizens action group. It alleged Fennell was in a conflict of interest because she received numerous donations from the Cortelluccis.

Following his investigation, former judge Donald Cameron’s report showed that nine people with the last name Cortellucci (including a “Nicolas” but no one named Mario) donated to Fennell’s 2010 mayoral campaign. Cameron reported that Fennell told him that, “Nick Cortellucci controls Fernbrook Homes.”

Fennell held an annual gala ball and golf tournament, raising money for charity and various organizations in the city. However, neither event had charitable status and where the proceeds went was not always certain. But the Cortelluccis donated money to both events, as well as to Fennell’s election campaigns.

During trial she was shown documents that showed the Cortelluccis donated amounts ranging from $12,500 to $50,000 to her annual private events. “Several companies were very generous,” she responded.

Messages left on Fennell’s voicemail by The Pointer requesting comment were not returned.  

Another person who testified at last year’s trial was Brampton’s former chief administrative officer, Deborah Dubenofsky. She had worked in the premier’s office of Mike Harris in the late ’90s, a senior policy adviser to him and then his deputy chief of staff during an era when the Tory government’s actions were benefiting the Cortelluccis (see part 1 of this two-part series). Fennell had run for the federal Conservatives in a Brampton riding, finishing third in the 1993 election.

Deborah Dubenofsky

Dubenofsky, who joined Brampton’s staff in 2007, did not always come off well during the trial, admitting at one point she’d given “inaccurate” testimony during a sworn deposition. John Corbett, who took over her job in 2012, testified that both Fennell and Dubenofsky were biased against Inzola. Corbett claimed Dubenofsky was directing the evaluation process so Dominus would become the preferred candidate for the contract. (Dubenofsky denied these allegations, and Corbett had spoken to the Inzola group about doing some consulting for them after he left the city’s employ in 2015.)

The Inzola trial exposed the cozy relationships that bind the GTA’s municipal and provincial politicians to developers. It revealed how those involved in deals often rub shoulders at private fundraising events, such as mayor’s galas, where large amounts are raised.

The trial heard how in 2008, a year after Fennell oversaw Dubenofsky’s hiring, she expected her to use her Conservative party connections to bring Tory politicians to her private fundraisers, as shown in a string of emails. Dubenofsky had previously denied that she helped Fennell raise money for her private events, and, after the messages were produced, called the insinuation a “wild stretch” and said she was merely “passing along emails”.

Fennell was also asked about the large sum the Cortelluccis gave to her event and the PC party.

“You understood in 2008 Mario Cortellucci to be a significant donor to Tories?” she was asked by Chernos, the lawyer.

“Is he? I do not know that,” she replied.

In the end, Ontario Superior Court Justice John Sproat ruled against Inzola and tossed the lawsuit in January, finding there was insufficient evidence of bias. Inzola is appealing the decision.

Not only do politicians fete developers at galas and charity events, but the developers respond in kind.

The Cortelluccis hold an annual Christmas lunch, to which municipal politicians are invited.

“These (politicians) find ways to repay these guys with sometimes favors, or preferential contracts,” says John Sprovieri, a former long-time Brampton city councillor and mayoralty candidate, speaking in general about the relationship between city councillors and developers. “Somehow they figure out a way to give them juicy contracts where they make huge profits and that would motivate these companies to give even more.  I think that that does go on.”

Former Brampton councillor John Sprovieri

As detailed in Part 1 of this two-part series for The Pointer, the Cortelluccis are influential players within the Ontario PC party, linked to numerous questionable transactions during the Mike Harris-Ernie Eves years. But the 2003 election of Dalton McGuinty’s Liberals seems to have marked a decline in their influence at the provincial level (despite the Cortelluccis donating $122,000 to the Liberals that year). Still, controversies continued to dog them at the local level.

In 2007, the then mayor of Barrie, Dave Aspden, was involved in talks between his city and neighboring Innisfill Township over the servicing of some land. At one point, Aspden seems to have asked for a side deal to allow servicing of land belonging to Mario Cortellucci. The land south of Barrie had been snapped up by developers, including by the Cortelluccis, who owned 100 acres in Innisfill.

Mario and one of his companies had donated to Aspden's election campaign.

But what really raised eyebrows was when Aspden flew to China on a junket partly paid for by a Chinese construction company — accompanied by Mario Cortellucci and the developer Saverio Montemarano (who had also given to Aspden’s election coffers). Aspden was the only Ontario politician invited on the trip.

Consequently, Barrie’s city council voted to investigate Aspden on suspicions of criminal misconduct. The investigation was conducted by the OPP, which eventually cleared him. Aspden lost his re-election bid in 2010, winning only 3.6 percent of the vote. Efforts by The Pointer to reach him for this story failed.

The city where the Cortelluccis arguably wield the most influence is Vaughan. There the ties between the city’s political elites and developers are remarkably close.

“We’re not much different than a Third World country, it’s of that nature,” argues Richard Lorello, a Vaughan municipal activist and former city council candidate. “We like to think that Canada is a different place, but when you get down to it, there are practices here that would make your head spin.”

Vaughan is a sprawling city of subdivisions, industrial parks and freeways, with a population of 323,000. The Cortel Group, one of Mario Cortellucci’s companies, is based there, in a two-storey modernist white and charcoal-grey building on Highway 7. The Cortelluccis have built numerous condo and residential developments in Vaughan, and have a massive, multi-phase project called Expo City, planned for development in the heart of Vaughan’s Metro Centre.

Rendering of Expo City in Vaughan

Vaughan has been bedeviled by political scandals. Long-time former city councillor and mayor Michael Di Biase was accused of taking free supplies and labour from a contractor to build a cottage for himself — a company that received more than $150 million in city business since 2002, including the job to build the new city hall. Di Biase frequently voted in favour of these contracts.

In 2014, Di Biase was accused in a lawsuit of trying to stall a construction project on behalf of a developer’s competitors. The lawsuit was eventually dropped.

A year later, he was involved in a secret decision by Vaughan City Council to permit a developer to build a residential subdivision on land protected by Greenbelt legislation.

Di Biase resigned in 2017 in response to allegations he had sexually harassed a city hall staffer. Efforts to reach him by The Pointer for comment were unsuccessful.

The Cortelluccis have received support from others among Vaughan’s political elite, including its current mayor, Maurizio Bevilacqua.

This was underlined last July at a special ceremony at which Mario and Nick formally donated $3 million towards building a 10-bed residential hospice. It is expected to be opened this year and will bear their name. During the ceremony at Vaughan’s city hall, Nick and Mario were in attendance to hand over their cheque, while Bevilacqua heaped praise on them, describing the Cortelluccis as “very selfless and a family that understands that we all have rules and responsibilities in this community to bring about positive change to people’s lives.”

“When the mayor stands on a stage up with the Cortelluccis to receive a cheque for millions of dollars, that is actually the icing on the cake for him,” remarks Lorello. “He is saying, ‘Look what I was able to do for you. My relationship with the development community yields all of these generous donations. So why would you question something like this?’”

In an interview with The Pointer, Bevilacqua said his ties to the Cortelluccis go back to the early ’70s, when his father used to rent dump trucks from the brothers. “So I have known (Mario) for a number of years, obviously.”

Vaughan Mayor Maurizio Bevilacqua at a recent event honouring Mario Cortellucci

Bevilacqua, right, giving Mario Cortellucci Vaughan's businessperson of the year award in 2016

When asked about the Cortelluccis’ influence on city council, Bevilacqua sidestepped the question and praised the Expo City condo development the family is building in Vaughan. “And so basically what I see there is that thousands of people have been provided houses and condos at reasonable prices,” said the mayor. “That's because those condos could have perhaps been sold higher.”

Bevilacqua, whose election campaigns have received funding from Mario Cortellucci, appears to have a cozy relationship to the development industry. In 2014, for instance, $600,000 was raised at his annual gala. More than half of that came from a group primarily made up of real estate development and construction magnates, which bid $310,000 during a live auction. The donors included Mario Cortellucci and Silvio and Carlo DeGasperis of TACC Construction; Benny Marotta of Solmar Development Corp.; Rudy Bratty of Remington Group; Fred Darvish of Liberty Developments; Lou Greenbaum of Vogue Development Group; Peter Cipriano of Gold Park Group; and Joe Maio and Claudio Memme of Maystar General Contractors, among others.

In 2017 Bevilacqua was made vice-chairman of VersaBank, a London, Ont.-based financial institution that, among other things, focuses on “providing financing to well-established real estate developers.” Established as a chartered bank in 2002, VersaBank paid the mayor $110,000 to sit on the board (an amount the bank says was donated to charity).

“Here is the mayor telling everybody he is on the board of a bank in an honorary capacity,” notes Lorello. “The mayor of our city is not a honorary member of the board but is vice-chair, and you dig a little bit deeper and you find this bank … specializes in development financing.”

However, Bevilacqua says VersaBank received its charter when he was secretary of state for international financial institutions in the Jean Chrétien federal government. “They approached me because they needed some guidance on some governance issues,” he explains. “And I'm not saying I'm an authority on it, but I'm very knowledgeable of the area ... So they brought me in with a very specific purpose, that it’s a governance issue. And that’s the story of that bank.”

The mayor stepped down from the bank early last year after his ties to it became known publicly.

More controversially, Bevilacqua threw his support behind Mario Cortellucci last year when the developer decided to run for the Italian Senate in a seat Italian nationals living in a different country can contend for. Bevilacqua issued a robocall in support of Cortellucci and attended the launch of his campaign.

But the optics were bad: Cortellucci was running on behalf of the Centre-Right coalition of right-wing parties led by Silvio Berlusconi, Giorgia Meloni, and Matteo Salvini, whose members promised to close Italian mosques and remove hundreds of thousands of migrants from the country. “Their major policy in terms of platform is anti-immigration,” Pietro Pirani, an Italian language professor at Western University, told the CBC. “In a very similar way as Donald Trump, from that point of view.”

One member of the coalition, the Northern League, attracted notoriety when it was revealed that a right-wing extremist suspected of shooting six Africans in Italy ran unsuccessfully for the party in a local race in 2017. The coalition has also taken anti-LGBTQ positions, pledged to name streets after Italian fascist leaders, and denounced female politicians.

Bevilacqua’s decision to endorse Cortellucci was curious in light of the fact he was a prominent member of the federal Liberal Party (including 22 years as an MP) and a champion of gay rights and same-sex marriage. (He has a son who is gay.) “I'm very, very progressive,” he told The Pointer.

It was also an ironic platform for Cortellucci to embrace, given that he and his brother are immigrants to Canada.

Bevilacqua appeared at two election rallies for Cortellucci. “Bevilacqua is a long-time Liberal and then suddenly he is supporting someone in an extreme right-wing coalition,” observes Lorello.

Bevilacqua admits he was not aware of all aspects of the Centre-Right’s positions and says he endorsed Cortellucci because “he said to me he wanted to do certain things for the Italian community, particularly for seniors. He wanted to get elected and wanted to build a community/constituency office for (Italian) seniors. He was not going to accept pay but would give any money that he was paid to the community and community organizations. So I viewed this through the eye of the community.”

One person who was appalled was York University professor of social science Caroline Hossein, who refused to give a speech at an International Women’s Day event at Vaughan’s city hall. “I couldn’t stomach it,” she said to one media outlet. “I couldn’t go to City Hall and talk about women’s issues, especially racialized women’s issues, and sit before a mayor who supports such racism.”

In the end, Cortellucci failed to win the seat.

With the election of Doug Ford’s Tories to power at Queen’s Park last summer, the development industry has been gifted a champion of their interests.

OPG’s sale of the Hearn generating station to the Cortelluccis for $16 million last fall highlights this reality.

The Cortellucci brothers and other members of their extended family donated $11,100 to Doug Ford’s leadership campaign. Back in 2010, Mario also donated $30,000 to Rob Ford’s successful campaign to become mayor of Toronto – much of which was used to pay off Ford’s campaign debts. Rob and Doug both held meetings with Mario once Rob was mayor.

Doug has also long dreamt of seeing the port lands developed, with the Hearn site as its anchor and plans for a football stadium, monorail transit system, residential construction and high-end retailers.  

Mariana Valverde, a criminologist at the Centre for Criminology and Sociolegal Studies at the University of Toronto, who authored a book on municipal governance, believes that at the provincial level there are “certainly” a lot of questionable dealings “like selling the whole huge waterfront land on which the Hearn is standing for $16-million. I mean, no matter what the soil remediation costs are, that is just outrageous.”