London

$31M lawsuit alleges 'corrupt bidding process' in London's urban forestry contracts

A London, Ont., tree company has launched a $31M lawsuit against city hall and Davey Tree Services, alleging the company has been granted preferential treatment in public contracts as part of what the lawsuit calls a 'corrupt bidding process.'

Suit alleges all contracts have gone to Davey Tree Expert since 2003 'with one exception'

Vehicles belonging to Davey Tree Expert can be seen in the company's yard off Third Street near the Canadian Pacific Railway tracks. (Colin Butler/CBC News)

A London, Ont., arbor company has launched a $31 million lawsuit against the City of London and Davey Tree Expert, alleging the company has been given a virtual monopoly on forestry contracts thanks to a "close association and friendship" between an employee of Davey and a city hall insider who used to work for the company. 

The lawsuit was filed in a Toronto court on Jan. 26 by London, Ont.-based CLC Tree Services and the allegations have yet to be tested in court.

The suit seeks $15 million in general damages, $16 million in punitive damages and a court order against the city, restraining it from granting or extending contracts for forestry work without first calling for public tenders. 

"My client's focus is not on the damages in this lawsuit," said Steven Bookman, the Toronto lawyer representing CLC Tree Services. 

"My client's focus all through this has been on correcting this problem and giving their company and other local companies a fair shot at the business the City of London has in the forestry industry, that's all they want. Let them making a living."

Suit alleges city hall insider keeps close ties

Court filings obtained by CBC News claim Davey Tree Expert has received all forestry work and consulting contracts from the city since 2003, "with only one exception."

The statement of claim alleges Davey has had preferential treatment from the city's forestry department for years because of a close personal friendship between Andrew Beaton, a former Davey employee who is currently the city's manager of forestry, and Timothy Holley, the man who took Beaton's job when he left to work for the city. 

Beaton and Holley are both named as defendants in the lawsuit, which claims they "spend a great deal of time together," including inspecting work sites in Beaton's city-owned vehicle, whether that work is under contract to Davey or not. 

The lawsuit claims that before 1996, the year Beaton left Davey to work for the city, forestry jobs had been awarded to other London area tree service companies. The suit also alleges Beaton's recommendations as forestry manager are "rubber stamped" by John Parsons, the city's manager of transportation and roadside operations, who is also named as a defendant in the case. 

CBC News reached out to Parsons, Beaton and Holley on Tuesday. All three declined to comment on the case.

Patti McKague, the City of London's director of strategic communications, told CBC News on Monday city hall does not comment on matters before the court. 

"While we won't comment on this specific situation, the city's procurement process is highly governed to ensure the best value for the city, and all purchasing decisions are subject to following this process," she wrote in an email.  

CLC Tree Services claims Davey always seems to be the lowest bidder on forestry contracts, which "far exceed the amount they tender" and "are often extended without further tender."

The lawsuit further alleges that when London shut down city forestry services for eight weeks in response to the outbreak of COVID-19, all work was assigned to Davey without providing CLC the chance to bid or tender on the contract. 

The suit alleges the way contracts are awarded is a violation of the Competition Act, a breach of the city's Code of Ethics and a conflict of interest because of Beaton's "close association and friendship" with Holley. 

'Corrupt bidding process' results in 'extreme financial loss'

A Davey Tree Service trucks sits in the company's London, Ont., works yards off Third Street near the Canadian Pacific Railway tracks. (Colin Butler/CBC News)

Further, the suit claims that the "culture of exclusion and preference" is so widely recognized by city staff, city politicians and local forestry companies working in the London area that "few if any arbor providers other than Davey even bother to apply, knowing in advance that there will be no prospect of the contract being awarded to anyone but Davey."

The statement of claim also accuses city hall of not allowing contractors working for the city to subcontract forestry work to any company other than Davey. 

Because of this, the plaintiff is claiming "extreme financial loss" and "destructive loss of economic opportunity through an inequitable and corrupt bidding process." 

Bookman told CBC News that his client has tried repeatedly to have the situation resolved amicably, by writing to city councillors and other officials, requesting a third party audit of city hall's forestry operations. 

"When serious allegations like this are raised and backed up with significant facts, one would think the city would take it upon themselves to take up an investigation," he said.

"Instead of following up on that, the city just completely ignored the request."

Ex-RCMP officer hired to investigate

Bookman noted a similar audit conducted on forestry operations in the City of Toronto in 2018 uncovered a number of problems, including $2.6 million in lost productivity by private tree contractors who were charging for work they never performed.

He said in London's case, the allegations made in the statement of claim are backed up by an investigation conducted by a former RCMP commercial crimes investigator. The former officer compiled findings into a 150-page report that includes interviews with city employees, staff from other area tree companies and other evidence. 

Beaton, Parsons and the City of London have filed an intent to defend. 

Jennifer Lennox, the director of communications for Kent, Ohio-based Davey Tree Expert, told CBC News in an email Monday the company denies the allegations. 

"Davey Tree will be filing a statement of defence in this case," she wrote. 

ABOUT THE AUTHOR

Colin Butler

Video Journalist

Colin Butler is a veteran CBC reporter who's worked in Moncton, Saint John, Fredericton, Toronto, Kitchener-Waterloo, Hamilton and London, Ont. Email: colin.butler@cbc.ca

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