Katz remains true to form

Opinion

Hey there, time traveller!
This article was published 29/02/2016 (3179 days ago), so information in it may no longer be current.

Over the 10 years he served as this city’s mayor, we discovered two fundamental truths about Sam Katz.

First, while he was mayor, Katz frequently and shamelessly mixed city and personal business.

And second, whenever someone raised an objection about the appropriateness of his actions, Katz brushed it aside like a piece of fluff on his lapel.

That long-standing tradition may be coming to an end. Monday, details from a RCMP investigation were revealed showing Katz received thousands of dollars in personal cheques from Caspian Construction, a company being investigated for possible fraud and forgery in connection with the construction of the new $214-million downtown headquarters for the Winnipeg Police Service.

According to police information used to obtain a search warrant, police believe fraudulent invoices were submitted to the city for work done at the new WPS headquarters (the old Canada Post building) that were “either done at other city properties, private properties or not done at all.”

Caspian was ultimately awarded contracts worth $157 million of the project’s total cost. A KPMG audit released in 2014 found the city violated its own rules for procurement when it awarded Caspian the lion’s share of the work on the new police building. To make matters worse, the total cost of the project has more than doubled since it was first announced.

No charges have been laid in this investigation, and nothing has been proven in court. Armik Babakhanians, Caspian’s president, denied all allegations.

In an interview with the Free Press, Katz denied any wrongdoing in the transactions with Caspian. He claimed the personal cheques were issued to pay him back for hockey and concert tickets at the MTS Centre he obtained for the contractor.

Even if his story is true, the transactions are highly improper. Caspian is an important player in the city’s construction industry. It was unacceptable for Katz to maintain a personal relationship with a company such as Caspian, or its principals, that involved the exchange of thousands of dollars while he was an elected official voting on contracts in which Caspian had an interest.

Lamentably, Katz has never adequately accepted or respected the need to keep his distance from friends or associates who had done business with him in the past, and who were still doing business with the city. In this instance, Katz sees no problem in doing a favour (procuring tickets to hockey and concerts) for a company that received more than $150 million in city business. This is the most egregious example of Katz’s conflicted relationships. It is not the only example.

In early 2005, Katz was paid $50,000 to buy him out as a partner in the consortium that renovated the then-Walker Theatre (now Burton Cummings Theatre).

Four months later, Katz voted at EPC and then at council to give his former partners in the Walker a $220,000 taxpayer bailout grant.

There was the infamous case of Katz’s office booking a taxpayer-supported Christmas party in a restaurant he co-owned at the time. That case prompted a lawsuit that came within an arcane legal argument of having a court force him from office.

However, the most intriguing of these personal-political-business entanglements was probably the revelation in 2012 that Katz had purchased a million-dollar home in Phoenix from the sister of an executive at Shindico Realty, a real estate development and management company that conducted millions of dollars in business with the city and whose owner, Sandy Shindleman, is a Katz friend and business associate. Tax records seemed to show the home had no mortgage registered against it, suggesting either some sort of preferential financing by the vendor or a cash transaction.

When stacked against these historic examples, and the fact the contracts awarded to Caspian were rife with problems, the cheques to Katz not only seem to be part of a pattern. They also start to take on a concerning overtone.

Surely, at some point Katz would have realized he cannot be involved in a financial transaction with any construction or development company that does business with the city. And that if he had a pre-existing relationship with Caspian to share tickets, that he discontinue the practice and refrain from any involvement in council votes related to any business with Caspian.

But as he has done so many times over his political career, Katz did not do any of those things. And even now, when confronted about the awkwardness of his relationship with Caspian, he remains unapologetic.

Katz is again demonstrating the need for updated conflict-of-interest legislation and a more practical mechanism for investigating and punishing public officials who show disregard for the principles of fairness, openness and best ethical practices.

It’s not clear the RCMP investigation will go anywhere, or that anyone will be charged. However, in the court of public opinion, we have again been provided a reminder of how little Katz cares about the relationships he kept, and the favours he continued to do, for people conducting business with the city.

dan.lett@freepress.mb.ca