Two of the most powerful lobbyists at city hall attended a $5,000-a-table fundraising soirée involving Coun. Giorgio Mammoliti on Wednesday, raising questions about whether all three individuals followed municipal rules governing their conduct.

CBC News has also learned that Toronto's integrity commissioner sent out a cautionary memo two weeks before the event, warning councillors about the strict rules on holding fundraisers.

The dinner banquet was organized as a "fundraising process" to "support [Mammoliti] so he can continue to fight the good fight at Toronto City Hall," according to the invitation, a copy of which was obtained by CBC News. "Unfounded, unjust attacks have taken their toll on him financially," the letter reads.

Several hundred people turned up at the Royalton Banquet Hall in Woodbridge — among them, Paul Pellegrini, president of lobbying firm Sussex Strategy Group, and Jamie Besner, a partner at Sussex.

At least one senior executive from property management and development company Greenwin Inc., which manages buildings owned by Toronto Community Housing, was also in attendance.

CBC News has not confirmed whether the Sussex lobbyists or Greenwin exec contributed to the $5,000 price per table. None of them returned messages left Thursday and Friday.

Mammoliti poses with businessman Anthony Pullano at the fundraiser in Woodbridge, Ont. (Anthony Pullano/Facebook )

Sussex is considered the premier lobbying firm at City Hall, and Besner is its chief municipal lobbyist.

His attendance at the fundraising dinner with his boss could raise flags under at least two sections of Toronto's lobbying bylaw.

The bylaw forbids lobbying "at a charitable event, community or civic event, or similar public gathering," though it explicitly permits "casual communication" at such affairs. It's not clear whether the Mammoliti soirée on Wednesday would be deemed a charitable or civic event.

Another clause of the bylaw prohibits the use of "improper influence" by lobbyists, defined in part as "any action that would bestow an improper benefit or constitute an improper influence on a public office holder."

Besner and his firm have come under the scrutiny of the city's lobbyist registrar before, following an evening last fall where Sussex staffers mingled with a pair of city councillors at a charity ball and later at a downtown lounge, according to reports in the Toronto Star.

As lobbyists, they would be allowed to contribute to a councillor's election campaign, but the donation window for next year's municipal elections doesn't open until January.

"It is highly irregular for councillors to have fundraisers for themselves in a non-election period," Coun. Joe Mihevc said when CBC News told him of the Mammoliti event. "Our integrity commissioner will warn you upwards, downwards, backwards and forwards that it's just an inappropriate, perhaps illegal activity."

Warning memo Read integrity commissioner Janet Leiper's May 9 memo about fundraising.

In fact, integrity commissioner Janet Leiper did just that two weeks ago, CBC News has learned. In a memo to councillors, she cautioned that "when it comes to defraying legal expenses," they "may not hold public fundraisers… or receive contributions for this purpose from members of the public, lobbyists, clients of lobbyists, developers, community groups, union leaders, corporations or businesses who are hoping to do business with the city."

Mammoliti owes the City of Toronto more than $52,000 in legal and accounting expenses stemming from an audit of his 2006 election campaign finances. Under a deal with the city, the first installment of $11,978 is due June 8.

He also faces a raft of more legal bills over a challenge to his 2010 election finances. A city committee voted in February to recommend proceedings against him after an audit found he surpassed his campaign spending limit by 40 per cent.

'Not a conflict'

The invitation to Wednesday's fundraiser, signed by Mammoliti’s son Michael, appears to address possible concerns, saying any financial contributions "will not be in any way a conflict."

"We have obtained legal [counsel] and opinion to help guide my father through this fundraising process and eliminate any possible conflicts or code of conduct issues."

An expert in municipal law said the letter still seems to raise red flags, though.

"To receive a letter like this, if you are one of the people that receives it, I think it puts you off a little bit and you say, 'What does this mean? Should I do it, should I curry favor by doing it, do I get some disfavour from not doing it?' And it puts you in a very precarious situation," said John Mascarin, a lawyer at the firm Aird and Berlis.

"It seems to be something that the code of conduct aims directly to prohibit."

Mammoliti did not respond to multiple calls and emails to his office from CBC News. In a statement the Toronto Star said it received Thursday night, he called the fundraiser a celebration of "my recovery from my recent health concerns," a reference to brain surgery he underwent 1½ months ago.

"The event was not in any way affiliated with campaign fundraising or campaign related soliciting," he wrote, according to the Star.

In business with Besner

The city lobbying registry shows Mammoliti has been lobbied by Besner on at least 11 issues so far this year.

Both men were also once apparently business partners. Federal corporate records show Besner and Mammoliti were co-directors of a company called Lisyam Global Consultants that was registered in 2001, listing Mammoliti's parents' house as the corporation's address. It's not clear what the company was for; it was dissolved in 2005.

Court documents suggest Mammoliti, who declared bankruptcy in 1997, is again facing a cash crunch. Sworn financial statements he submitted in October as part of his divorce list more debts than assets, and nearly $175,000 a year in personal expenses against his city salary of $106,000.

The statements say Mammoliti has borrowed $100,000 from one of his sons and moved back in with his elderly parents at one point last year.

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