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Katz bought Sheegl's biz

Transaction raises issue of relationship with CAO

By: Bartley Kives

Posted: 09/12/2012 1:00 AM | Comments: 0

Mayor Sam Katz (right) and city CAO Phil Sheegl are friends. Sheegl sold his Arizona firm, Duddy Enterprises LLC, to Katz last March for $1. (BORIS MINKEVICH / WINNIPEG FREE PRESS ARCHIVES) Photo Store

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Mayor Sam Katz's relationship with Winnipeg chief administrative officer Phil Sheegl is once again setting off a seismic disturbance at city hall, this time because of a corporate transaction in Arizona.

Last spring, Katz purchased a Scottsdale-registered company called Duddy Enterprises LLC from the city's top bureaucrat, who recently said he and Katz have no business relationship.

Arizona Corporation Commission records show the transaction took place on March 29. Sheegl told reporters on Aug. 31 he has no business relationship with Winnipeg's mayor.

Duddy Enterprises LLC is a dormant company, Sheegl said in an email conveyed by the City of Winnipeg's communications manager.

The company's purchase price was $1, said Katz, who also described the company as inactive.

"I'm looking around and I may do something with it," Katz said of Duddy Enterprises. "If Duddy ever turns into a business and I'm actively doing something with it, I will disclose it."

Under council rules, elected officials are required to declare assets worth more than $500. Katz said he is well aware of the rules.

"I don't know of a mayor who has shown more transparency in his declaration," said Katz, noting city clerk Richard Kachur commended him for filing a detailed disclosure of assets in June 2004, when he was first elected mayor.

Katz said there is nothing untoward about his purchase of a dormant company from Sheegl, noting his friendship with the chief administrator is no secret.

"This is the simplest thing in the world. To be very frank with you, I think it's unfortunate certain people are looking for headlines. I know how the game is played," said Katz, who said he is the victim of a media witch hunt.

"This stuff is ongoing. To be brutally honest, I've been there, I've lived it, I've heard the bull - and I'm not going to participate in a witch hunt."

Katz said he was clear when he described Sheegl as not just a friend, but a good friend in 2008, when the former real estate agent was hired as Winnipeg's director of planning, property and development.

At the time, Katz said he tried to talk Sheegl out of applying for the job because business people can be frustrated when they make a move into government.

"I wouldn't wish that grief and aggravation on anybody, let alone a friend. But as you can see, he didn't take my advice," Katz said in April 2008.

Six months later, Sheegl was promoted to the position of deputy chief administrative officer, serving under then-CAO Glen Laubenstein. Sheegl was further promoted to CAO in 2011, beating out 40 other applicants following a nationwide search conducted by Meyers Norris Penny.

At the time, five councillors voted against Sheegl's appointment, with Couns. Ross Eadie (Mynarski), Jenny Gerbasi (Fort Rouge), John Orlikow (River Heights), Harvey Smith (Daniel McIntyre) and Russ Wyatt (Transcona) citing the potential for conflict between Katz's and Sheegl's formal duties and their relationship as friends.

Even Katz's allies later complained it can be tough to criticize Sheegl without forcing the mayor -- who does not like being cornered -- into an entrenched policy position.

Katz said this dynamic does not affect his decision-making. He said his friendship with Sheegl played no part in his decision to order a financial review of an administrative proposal to swap two old fire halls and a parcel of Fort Rouge land for a piece of property owned by Shindico Realty.

"As mayor, there is no question about what you think is right," he said of his decision to order the review. "It has nothing to do with liking or disliking somebody and having an acquaintance or friendship."

When asked what he thinks about the optics of his purchase of a company from Sheegl, Katz said he's not concerned.

"It's an invitation to those who basically have a plan -- if they have a plan to discredit people," he said.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 12, 2012 A4

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