Conflicts of Interest

NOTE: The following article was first published on April 2, 2012, so the membership of the Planning Advisory Commitee, which changes frequently, is out of date. However, it is an illustration of the sorts of conflicts of interest that have plagued that particular committee and which help to explain some of the land-developer-friendly decisions that it has made over the years.

Land developers sit on the same committees that decide which land gets developed, and by whom. The Planning Advisory Committee (PAC) is composed of four councillors and five members of the public, some of whom own or represent companies which make a great deal of money from developing land. The current members of the PAC are:

  1. Dan Koncz, Chair, Owner of Dynex Manufacturing, President of Skyline Building Management, and President of the Fredericton Chamber of Commerce 2004-2005
  2. Geoff Colter, Vice-Chair At Large, Owner of Springhill Construction and Member of the Fredericton Chamber of Commerce
  3. Councillor Kate Rogers, Member
  4. Councillor Leah Levac, Member
  5. Councillor Marilyn Kerton, Member
  6. Councillor Scott McConaghy, Member
  7. Jim McElman, At Large
  8. Bernadet Samulski, At Large
  9. Rodney Blanchard, At Large

As it stands, both the Chair and the Vice-Chair of the PAC are land developers. The same people who submit applications to the PAC are in the very advantageous position of also sitting on the PAC and affecting its decisions. They read over and discuss their own applications, then make money from them when they are approved. Imagine if you applied for a job, and you also sat on the board which decided whether or not to give you the job—it would be a great deal for you, but a very bad deal for the company. In this case, the company is us—the residents of the City of Fredericton.

Let’s look at a recent example of how these conflicts of interest have affected Fredericton. Geoff Colter sat on the PAC when it decided to re-zone a section of McMinniman Court from Future Development and Open Space to Residential and create a 42-lot subdivision (see item 6). His own company, Springhill Construction, will be working on this project, and he stands to make a great deal of money from it. This re-zoning is a very contentious issue that has received a lot of opposition from local residents for many reasons. The vote was initially split 3-3, but then the deciding vote to create the subdivision was cast by the Chair, Dan Koncz—who has many conflicts of interest of his own.

Dan Koncz is the President of Skyline Building Management, which owns many residential units in Fredericton. He is also the owner of Dynex Manufacturing, a company which manufactures building materials. He even lists “Real Estate investing”1 as one of his interests on his LinkedIn profile. He clearly has very deep financial interests in the real estate industry, so the fact that he chairs a committee which makes decisions regarding real estate is in itself a blatant conflict of interest. The problem with Dan Koncz being the chair of the PAC goes even deeper than that, however. He is a member of the Fredericton Chamber of Commerce, and was even President of the Chamber from 2004-2005. The Fredericton Chamber of Commerce advocates for the interests of business—including those businesses that wish to develop real estate and need the Planning Advisory Committee’s consent to do so. The Chamber describes its business advocacy mission as follows:

As the largest chamber of commerce in New Brunswick, the Fredericton Chamber of Commerce is in an ideal position to effectively advocate for you and your business. Drawing on the knowledge and expertise of our extensive network of business and community leaders, we work with all three levels of government to ensure that the voice of Fredericton business is heard.

It is clear that people who sit on the City of Fredericton’s Planning Advisory Committee are also members of an organization which advocates for business interests, and that this is a major conflict of interest. And yet, the rabbit hole goes even deeper than that. The Fredericton Chamber of Commerce explicitly says that part of its mission is to help businesses get around “government red tape”—which would include pesky City committees that don’t want to approve their land development proposals:

Reducing Barriers to Business Success

Members tell us that one of the greatest challenges they face in business is government red tape. To help our members overcome this challenge, we are exploring ways to act as a liaison between business and government, develop processes for navigating through red tape, and educate members on how to most effectively manage red tape challenges in their own businesses.
– From the Fredericton Chamber of Commerce website

It would be one thing to provide advice to businesses as to how to deal with the government, or to petition government bodies such as the PAC from the outside. It is quite another thing to actually get members of the Chamber of Commerce on government committees so that they can influence them from the inside. And that is exactly what these businessmen are doing.

It should come as no surprise that I have never seen either Dan Koncz or Geoff Colter vote against a proposal by a land developer. They consistently vote not only for proposals that are or might become financially beneficial to them, but they also vote for proposals that benefit their business buddies and fellow members of the Fredericton Chamber of Commerce. This is beyond inappropriate; it is a flagrant violation of even the most basic standards of ethical conduct.

The PAC is not the only committee to have members with conflicts of interest. The Zoning By-law Review Committee also has this problem. One of its members works for Colpitts Developments, one of the largest developers and landlords in the city, and is yet another member of the Fredericton Chamber of Commerce. His bio reads:

Craig McElroy is a professional engineer for Colpitts Developments. Craig has significant experience and knowledge in the development industry and is a member of the Chamber of Commerce and the Fredericton Home Builders Association.

Another member of the Zoning By-law Review Committee is an executive member of the Chamber of Commerce:

Chipp McCrea is a partner with the law firm of Matthews McCrea Elliot on Main Street. Chip [sic] also sits on the Executive Committee of the Fredericton Chamber of Commerce. Chip [sic] has knowledge of development and the provisions in the Zoning By-law through his work with clients.

With so many big business advocates and representatives on the City Council committees that deal with land development, it should come as no surprise that so many business-friendly developments happen even though they are strongly opposed by the people of Fredericton—such as the bulldozing of large sections of the UNB Woodlot to build big box stores.

It is incredible that no sitting councillors have taken issue with these conflicts of interest. It is even more incredible that they permitted the appointment of people with such backgrounds to positions of power in the municipal government in the first place. This suggests that the current City Council functions as an old boy’s club, working for the interests of wealthy business owners instead of the interests of the people of Fredericton.

Conflicts of interest on committees of Fredericton City Council, and the problems that such conflicts cause, are easy to identify. The question remains: How can we solve these problems? I propose that we establish an Ethics Committee that provides oversight to and operates independently of Council. This committee could review the actions of other committees to ensure that they conform to standards of ethical conduct, as well as scrutinize potential committee members to ensure that being a member of a City committee will not cause a conflict of interest. Improving the City of Fredericton website will also make it easier for citizens to see what Council and its various committees are doing. Ultimately, Council and its committees must be transparent and held to account for their actions, and decisions ought to be made based on the best interests of the City and its residents, not based on the business interests represented by conflicted committee members.

  1. ^ I would be very interested to see exactly what real estate investments Dan Koncz has made, or advised others to make. Has he invested in real estate of which he has inside knowledge by virtue of being Chair of the Planning Advisory Committee? If he knew that a particular piece of property was going to be worth much more or much less in the future, would he be able to resist the urge to make money from that knowledge? Would he be able to resist the temptation to use his position of influence in the municipal government to ensure returns on his real estate investments? Such investing would not only be unethical, but criminal—with a maximum sentence of 10 years in prison. If he “tipped” others about property of which he has inside knowledge, the penalty would be a maximum of five years in prison. See section 382.1 of the Criminal Code.

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