A pair of Toronto city councillors hired a scrappy political strategist to wage a multi-front PR campaign after CBC News ran stories examining their ties to local developers, with one of the councillors privately making threatening comments about a CBC reporter and compiling a "research" dossier on him and political foes, according to allegations in a lawsuit.

Then-councillor Justin Di Ciano and Coun. Mark Grimes hired the firm of strategist Warren Kinsella, an ex-adviser to former prime minister Jean Chrétien known as the "prince of darkness" of Canadian politics, and paid him an initial $10,000 retainer, the lawsuit says.

Kinsella's firm sued when they didn't pay subsequent invoices.

The PR campaign was to include complaints to CBC about its reporting, slipping "pertinent information" to competing media, arranging for letters to the editor to be signed by the councillors' friends and relatives, and the creation of "myriad" websites and social media accounts promoting the politicians and their message and attacking a past electoral rival.

"Late on the evening of Oct. 24, 2016, Di Ciano and his brother, Julien Di Ciano, contacted Kinsella and said that he and Grimes were being targeted by CBC News reporter John Lancaster and others, and they wished to retain [Kinsella's firm] Daisy Group to provide public relations," says the statement of claim, which contains unproven allegations that were never tested in court.

Then after midnight, the lawsuit says, "Di Ciano sent an email to Kinsella and other Daisy Group staff attaching five documents containing research about John Lancaster and political critics of Di Ciano and Grimes."

Coun. Mark Grimes, right, and Di Ciano chat during a meeting of Toronto city council. Both are now facing non-criminal charges for allegedly violating the Municipal Elections Act during the 2014 election. (John Rieti/CBC)

The statement of claim has no details on what those documents contained.

Di Ciano, who didn't seek another term in last fall's municipal elections, said Sunday by email that he's on vacation in Europe and would try to provide a comment by Monday evening. Kinsella, who has contributed as a political pundit to CBC News and many other Canadian media outlets, wouldn't comment on the lawsuit except to say that his firm eventually got paid.

In the days and months before the firm was allegedly hired, Di Ciano and Grimes had been the focus of a number of CBC stories examining their relationships with developers in the Toronto suburb of Etobicoke. Among other things, the reports revealed that both had pushed to rezone lands in a way that would benefit a developer with which Di Ciano had longstanding ties, and, separately, that Grimes had appeared in a promo video for a condo development, which Toronto's integrity commissioner ultimately ruled was "improper."

Later CBC reports examined allegations the pair might have benefited from more than $40,000 in polling and research invoiced to a developer in the lead-up to the 2014 municipal election. Eventually, the two politicians were investigated by an OPP anti-corruption squad and then charged last fall with one non-criminal count each of violating the Municipal Elections Act by submitting incorrect expense declarations for their 2014 campaigns, related to the polling work. Their next court hearing is Tuesday.

Grimes family firm paid $10K retainer, lawsuit says

In the lawsuit, Kinsella says he initially met Di Ciano and his brother in Etobicoke the morning after he was first contacted. Di Ciano handed him payment for his retainer — a $10,000 cheque from the Grimes family trucking company, MGA International Logistics — and said MGA would pay future invoices as well, the statement of claim alleges.

Di Ciano then described "his activities with respect to" one of the controversial Etobicoke developments — which was actually in Grimes's ward — and "what he wanted Daisy Group to do," following which the men discussed detailed strategy for nearly two hours. The statement of claim says Kinsella outlined steps including:

Conducting "opposition research" on one of Grimes's political opponents.

"Disseminating pertinent information on a confidential basis to competing media, in particular the Toronto Sun."

Setting up "myriad internet properties" to promote "helpful news coverage."

Coming up with talking points "for Di Ciano and Grimes to use when [they] were identified in further corruption-related stories by CBC News."

Posting on Facebook, YouTube and Twitter to promote the councillors.

Preparing letters to the editor, "which Di Ciano [and] Grimes … offered to arrange to be signed by their friends and relatives."

Drafting a complaint to CBC's ombudsperson.

The lawsuit says Kinsella's firm began work on almost all these assignments.

Councillor 'became very heated and angry'

A few days later, the court filing says, Di Ciano "became very heated and angry" after seeing another CBC News report.

"Kinsella made repeated efforts to calm Di Ciano down, and requested that he stop threatening John Lancaster and CBC News," it reads.

It's not clear from the statement of claim what those alleged threats consisted of.

Kinsella's firm kept up its work for the city councillors, often co-ordinating through Di Ciano's office at city hall, according to the statement of claim. But when Daisy Group issued its first invoice on Nov. 30, 2016, for $16,950, it went unpaid, the lawsuit says. Meanwhile, the firm kept doing work for the councillors.

Then, in January, "Di Ciano called to Daisy Group and, in a loud voice, intimidated and insulted Daisy Group's office manager, who had been sending payment reminders," the statement of claim says.

Daisy Group filed suit in June 2017, seeking $29,570 plus HST for its work. Neither Grimes nor Di Ciano filed a statement of defence.

Grimes said last week in an email that the matter "is not top of mind" and that he wouldn't be able to comment further until this Thursday. He was re-elected in last fall's municipal vote with the backing of Toronto Mayor John Tory.

$10K payment raises concerns

One potential issue raised by the lawsuit's allegations: If the Grimes family's company indeed paid the $10,000 retainer for Kinsella's services, Di Ciano — but not Grimes — may have breached the City of Toronto's Code of Conduct rules around gifts to politicians, experts said.

Lawyer and municipal law expert Eric Gillespie says it's concerning if a city councillor arranged to have thousands of dollars in PR services paid for by a third-party company. (CBC)

"It's definitely a gift," said David Siegel, a political science professor at Brock University in St. Catharines, Ont., and an expert on municipal governance. But in the case of Grimes, he said, the gift is coming from his own family, so it doesn't create any new conflicts of interest.

"Di Ciano is in a different situation," said Eric Gillespie, a Toronto-based municipal law expert.

"The money wasn't coming from a close friend, or a relative, or his own family's purse or whatever. So that's the kind of relationship that, generally speaking, integrity commissioners and, in turn, the courts do get concerned about — when somebody owes somebody a big favour, and they've created that favour by monetary means."

The issue is moot, however, because Di Ciano is no longer in office, so Toronto's integrity commissioner wouldn't have jurisdiction to field any complaints.

Follow Zach Dubinsky on Twitter @DubinskyZach