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Katz conflict-of-interest case dismissed

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Sam Katz’s future as the mayor of Winnipeg is secure after a judge dismissed the case against him this afternoon, ruling there was no violation of conflict-of-interest laws.

Queen’s Bench Justice Brenda Keyser had been asked to rule whether Katz violated Manitoba's municipal conflict-of-interest act when his office hosted a party for city councillors and department heads at Hu's Asian Bistro on Ellice Avenue in 2010. The bill for the event, paid for with taxpayer funds, was $3,084.35. At the time, Katz owned the restaurant.

Keyser refused to dismiss the case on the basis of technical-breach arguments, opting instead to decide it on its merits. 

The judge said Katz exhibited "bad political behaviour" and will have to be judged by the public at the next civic election in 2014. Throwing him out of office -- triggering a costly and time-consuming election -- would be the wrong move, she said.

Keyser ordered Joe Chan, who originally filed the case, to pay $10,000 in legal costs.

Katz did not attend the court hearing, but held a press conference at city hall to respond to the court decision. He said from his point of view "it's now history and we move forward."

The mayor refused to respond to the judge's comment that he exhibited bad ethical and political behaviour.

"The end result is it's not a conflict of interest and that's the bottom line," Katz said.

Had Keyser decided Katz deliberately broke provincial rules, he would have lost his seat as mayor. If she had found he inadvertently skirted the law, he would have kept his job but could be ordered to repay the money.

'Not about corruption'

Lawyer Robert Tapper argued Tuesday Katz was guilty, at most, of using poor "political judgment." Tapper said his client should only be judged by the court of public opinion.

"This case is not about corruption. This case is not about democracy. This case is about a Christmas party," said Tapper. "It's trivial. It's a Christmas party, for crying out loud."

Not everyone agreed. A group of about 20 people gathered outside city hall late Tuesday afternoon to call on Katz to resign.

Restaurateur Joe Chan filed a declaration in the Court of Queen's Bench last year alleging Katz was in a conflict of interest. After making procedural errors, Chan, who manages the Cathay House Restaurant and has worked for Daniel McIntyre Coun. Harvey Smith, withdrew his motion and was forced to pay $750 in court costs. The complaint was then picked up by human rights lawyer David Matas, who filed another declaration and appeared in court Tuesday to make his arguments.

Matas alleged the mayor knew Hu's Asian Bistro was his restaurant, he knew the invitations for the party came from his office, he knew the city was paying for the party, and he was aware of the conflict-of-interest rules. In his court filings, Chan said the suggestion $3,000 is an insignificant amount of money is "out of touch" with the reality of ordinary people and combating conflict of interest is the first line of defence against corruption.

"The mayor can't plead ignorance, he can't plead a mistake. He knew everything," Matas argued Tuesday. In his motion, Matas argued tolerating conflicts of interest leads to corruption, and in order to be credible on its stance against human rights violations abroad, Canada must be "firm, unequivocal and uncompromising" in its stance against conflict of interest at home.

"It's hard to say a restaurant owner doesn't benefit from customers coming into his restaurant," Matas told court. "The issue of conflict of interest is very important, so important that a small sum can lead to loss of office."

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Updated on Friday, April 5, 2013 at 3:32 PM CDT: Updated.

4:18 PM: Adds reaction from Sam Katz.

4:28 PM: Adds new photo.

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