A Toronto politician who helped a pair of real-estate investors get permission to place advertising billboards next to a major highway later received at least $275,000 in mortgage loans from them, a CBC News investigation has found.

The loans to Coun. Giorgio Mammoliti were, in each case, issued two years after he successfully put forward motions at Etobicoke York community council meetings to allow the billboards on properties alongside Highway 401.

One of the real-estate investors is also the landlord for Mammoliti's constituency office and has been involved in several realty transactions involving the city councillor over the last six years.

Loans from individuals to councillors are not prohibited by the conduct rules for Toronto politicians, and whether they must be disclosed is a grey area, according to experts in the field.

"Loans are a bit tricky because we all get loans sometimes in our lives from financial institutions that generally don't give way to any sort of obligation," explained David Siegel, a political science professor at Brock University in St. Catharines, Ont., who specializes in local government.

"But, say, when the loan is with somebody who does business with the city, there is always a question about whether there are special arrangements around that loan."

Mammoliti would not comment and referred inquiries to a lawyer, who did not return calls. The city councillor has previously said some of the billboard motions he brought forward were part of an effort to "clean up old signs" in an area where illegal advertising has multiplied over the years.

Large, two-sided billboards next to major highways can bring in as much as $250,000 in annual revenues, according to an expert report prepared for the city in 2009. Various city councillors have promoted them from time to time on behalf of businesses in their wards, and Mammoliti has sometimes opposed them.

Holding company

The first applications Mammoliti backed for billboards near the 401 came in 2004 and 2006. Motilal (Mac) Champsee, a Toronto real-estate developer, sought and got permission for two signs on the roof and in the rear of a building he owned at 1881 Wilson Ave.

Champsee told CBC News he didn't know Mammoliti was advocating for the billboards at the Etobicoke York community council meetings. "I didn't know who did what," Champsee said. "I don't know what happened over there."

Two of the billboards in question are on neighbouring addresses now owned by realtor Ralph Nardi. Nardi's company lent Mammoliti and his wife $75,000 and handled the sale of their home. (CBC)

In 2007, the developer issued a $200,000 loan — at 12 per cent interest — to companies owned by Mammoliti and his wife. The money was registered as a mortgage on the couple's investment properties and was provided by a company called Tradesea International. Champsee, who was vice-president and a director of Tradesea, explained that it was a holding company for an investor in India.

"There are several companies where people were investing from overseas, and… I did a fair amount of work like that," he said. "They happened to have some money at that time probably and, you know, I make small decisions for different companies at different times.

"It was giving a good return and that was it."

The building at 1881 Wilson Ave. is now owned by Ralph Nardi, a former business associate of Champsee who runs a Remax brokerage. In 2009, that property and two others owned by Nardi had applications for billboards in front of the community council:

• One sought permission to upgrade the backyard sign at 1881 Wilson Ave.
• Another was to upgrade the billboard next door at 1885 Wilson Ave., where Nardi's brokerage has its headquarters.
• A third was for a new billboard facing the 401 on a property several hundred metres to the east.

When the matters came up for debate at the Etobicoke York community council, Coun. Doug Holyday, now Toronto's deputy mayor, wanted more information about the applications. "These signs are worth hundreds and hundreds of thousands of dollars to somebody," he said.

A sometimes testy debate ensued. The community council eventually approved Mammoliti's motion in favour of the billboards by a vote of 6-3.

Deputy Mayor Doug Holyday told CBC that "perhaps there are some areas" that the city's code of conduct isn't strong enough and "maybe should be reviewed." (CBC)

Nardi, who wouldn't comment when contacted by CBC News, had loaned Mammoliti $75,000 by mid-2011, according to property records and court documents. The Remax franchise owner is also the landlord for Mammoliti's constituency office and the local business improvement area, which shares office space with the municipal politician. His brokerage also handled the sale of Mammoliti's family home.

Reflecting back on the 2009 community council meeting, Holyday told CBC News this week that the code of conduct that governs politicians in Toronto should be reviewed. Any review should also consider whether loans by individuals to councillors need to be disclosed, Prof. Siegel suggested.

"This is something that I think needs to be looked at," he said.

If you have more information on this story, or other investigative tips, please email investigations@cbc.ca