Conflict rules easily exploited

Opinion

Hey there, time traveller!
This article was published 27/01/2017 (2792 days ago), so information in it may no longer be current.

It’s easy to understand Mayor Brian Bowman’s consternation.

Bowman and council had just been rocked by reports the RCMP found evidence of a $200,000 payment to former chief administrative officer Phil Sheegl and former mayor Sam Katz from a construction firm involved in the retrofit of the Winnipeg Police Service’s downtown headquarters. The police have not laid any charges, and no allegations have been proven in court.

Still, the revelation shook city hall to its very foundation. Even though Katz and Sheegl are long gone by now — the first via retirement, the second by way of cleverly timed golden handshake — the mayor and council still carry the burden from the allegations levelled against them.

The current mayor’s first thought was to ask the province to order an official inquiry into the wheelings and dealings around the WPS project, to get to the bottom of what happened and who, if anyone, profited. “The public needs to know we’re taking this seriously,” Bowman said Thursday. “The public needs to know that we’re doing everything we can to restore trust and faith in city hall.”

The mayor is right when he says all Winnipeggers should see this being taken seriously. Unfortunately, Bowman and many members of council who supported his call for a provincial inquiry will get no satisfaction from this tack. In fact, there are strong arguments against an inquiry, at least against holding one now or even in the near future.

No government would order an inquiry of any kind while an active criminal investigation is ongoing. If that investigation fails to produce charges, it will be difficult for the province to justify an inquiry. If charges were laid, then it would be impractical and highly improper to try and conduct a concurrent inquiry. It is also important to remember, in keeping with legal tradition, any evidence presented at an inquiry would be inadmissible in any subsequent court proceeding.

That does not mean Bowman and council need sit on their hands until the RCMP are finished their work. In fact, if city council wants to do something to address the allegations of wrongdoing by a former mayor and former chief administrative officer, it should pressure Premier Brian Pallister and his Tory government to reform the law governing municipal elected officials and conflicts of interest.

Former mayor Katz, in particular, has lived a charmed life as an elected official, in large part because the provincial law governing conflicts of interest and overlapping business interests is woefully inadequate. The former NDP government routinely ignored this reality and refused to get involved in reforming either the City of Winnipeg Act or the Municipal Conflict of Interest Act, to facilitate effective investigations and clarify penalties.

Former premier Greg Selinger did, finally, agree to such a review of legislation in the months immediately prior to the 2016 election, which he lost. It was just one of a number of measures brought forward by the NDP in the pre-writ period that were the very picture of too little, too late.

That gives the new government a wonderful opportunity to step in and not only do the right thing, but do it in a way that fully exposes a failure of the previous government.

If that is not motivation enough for Pallister, a quick review of the trail of questionable ethical and moral decisions made by former mayor Katz should be enough to light a fire under someone at the Manitoba Legislature.

If Katz and Sheegl were good at anything, it was in exploiting the vagaries in the existing laws governing conflicts of interest. They were patently aware that there are virtually no investigatory resources or powers devoted to a full and fair review of conflicts of interest. Both men seemed more than capable of conducting private business dealings that not only overlapped with their civic functions, but which existed just outside the reach of current laws.

This familiarity with the extremely limited nature of existing laws was demonstrated clearly in 2005 when Katz accepted a $50,000 payment from former business partners involved in renovating the Walker Theatre in downtown Winnipeg. The payment was purportedly to buy him out of an interest he held in a mortgage on the historic theatre. Six months after he took the money, Katz voted on a motion to executive policy committee to give the Walker Theatre consortirum a $220,000 grant.

When questioned about it, Katz claimed there was nothing wrong with his decision to sponsor and vote for the grant motion because the people involved in the consortium were now “former” business partners. “If I’m not involved, I’m not involved,” Katz said at the time. “You either are or you aren’t.”

This wasn’t some off-the-cuff rhetoric to deflect a reporter’s question. This was Katz demonstrating he knew municipal conflict-of-interest guidelines didn’t include any restrictions on taking part in a vote to give money to your “only recently former” business partners.

The same scenario played out years later when it was learned Katz had obtained a luxury home in Phoenix that was previously owned by the sibling of a principal at Shindico, the real estate development company owned by Sandy Shindleman, a well-known friend and business associate of the former mayor. At the time of the revelations, questions were being raised about the propriety of city real estate transactions involving Shindico.

It seemed Katz either got the house for free, or at a greatly reduced price. There was no mortgage on the home, making the value of the transaction untraceable. It certainly smelled very bad, but again, conflict of interest laws do not contain any provisions to review foreign real estate transactions between Winnipeg elected officials and Winnipeg government contractors.

An inquiry may be in the cards, but it’s unlikely. Charges may or may not be laid. Regardless of how this story unfolds, few citizens would oppose a move by the PC government to improve conflict of interest laws for municipal officials.

It may be impossible to redress the misdeeds of past municipal officials. Guaranteeing no one in the future exploits their position at city hall for personal gain would still be a good outcome.

dan.lett@freepress.mb.ca