Inquiry needed for city hall stain

Opinion

Hey there, time traveller!
This article was published 26/01/2017 (2793 days ago), so information in it may no longer be current.

Good call by Mayor Brian Bowman to push for a public inquiry into allegations about former mayor Sam Katz and his friend, former city CAO Phil Sheegl. In affidavits filed in court, the RCMP allege Mr. Katz and Mr. Sheegl received kickbacks stemming from the awarding of the contract for the Smith Street police headquarters project.

The RCMP allege Caspian Construction owner Armik Babakhanians paid $200,000 to Mr. Sheegl two days after council gave Mr. Sheegl the sole authority to award the construction contract, which he subsequently gave to Caspian in November of 2011. RCMP say Mr. Sheegl then gave Mr. Katz $100,000.

The RCMP began its investigation into the police headquarters project in December 2014. In early 2016, the RCMP expanded its probe to include the new Canada Post sorting facility near the airport, which Caspian built in 2010.

Mr. Sheegl’s dubious ethical practices have been well-documented. Repeated independent audits of real estate transactions and development deals were revealed during his tenure at city hall and no doubt were behind Mr. Katz’s decision to not seek re-election in 2014. However, despite the audits, no official at city hall has ever been disciplined for those actions, leaving many wondering: why?

When Mr. Sheegl was hired, he had no experience as CAO, and he made it clear from the get-go things were going to be done his way. So he broke up the contract to build new fire halls into four separate units to skirt city council’s scrutiny. Then it was revealed one of those stations was built on land owned by Shindico that was subject to a since-cancelled three-for-one land swap that also wasn’t disclosed to council. The owner of Shindico is a friend of Mr. Katz, and a report suggested Shindico was given preferential treatment in that deal.

But there’s more that needs to be examined here. City staff recommended the sale of downtown surface lot for $5.9 million without telling council the land was valued at $10 million. The Parker land swap was pushed through with no appraisals. The Canada Post complex was bought without an appraisal. Design changes and project-management issues on the police-headquarters project took the cost from $135 million to $214 million.

As well, the Winnipeg Police Service chose not to interview one of two whistleblowers who came forward with allegations about problems on the construction of the headquarters. It was also determined Mr. Katz paid cash to buy a US$1-million Arizona home from the sister-in-law of a Shindico official.

Perhaps the biggest insult in all of this is the fact Mr. Sheegl walked away from his job as CAO with a $250,000 severance package in 2014, despite not working a single day that year. That deal made him this city’s highest-paid civic employee for 2014.

Who could blame Winnipeggers for wondering how deep this goes?

A public inquiry could go a long way to provide answers and some insight into how to prevent it from happening again.