Winnipeg Free Press - PRINT EDITION

Katz says purchase unwise

Concedes buying firm from city CAO raised questions

  • Print

One day after complaining about being the prey in a media "witch hunt," a more contrite Mayor Sam Katz conceded it wasn't a good idea to buy a shell company from the city's top bureaucrat.

In March, Katz purchased a Scottsdale, Ariz., entity called Duddy Enterprises LLC from Winnipeg chief administrative officer Phil Sheegl. When asked about the transaction on Tuesday, Katz said the company was dormant and suggested scrutiny of the move was part of a plan to discredit him.

On Wednesday, Katz continued to insist he did nothing untoward -- but acknowledged it doesn't look great when the mayor buys a company from a senior city official, who is also a good friend.

"When you're in the world of politics, the sad statement is reality doesn't count. As you've heard the expression, perception is reality and perception appears to be extremely important. So should one exercise more caution? I think the answer is a definitive yes," Katz told reporters.

"If I had to do this again, I would have paid three or four thousand dollars, found a lawyer and, boom, done that. No doubt about that. That's a very valuable lesson learned."

Katz repeated his assertion Duddy Enterprises is inactive. "It's been a dormant company, which has been verified. It was purchased for $1. Basically, you can call it a shell company. Call it what you want," said the mayor, adding he may activate it in the future.

Katz did not say whether the company has ever had any assets or what purpose it served Sheegl, who also did not answer queries about the company.

In a statement, the CAO repeated the company is dormant and expressed regret for selling it to Katz.

"In retrospect, it would have been better for the mayor to set up his own new company," Sheegl said, via email. "As I have said before, the mayor and I are not partners in any of my businesses."

The City of Winnipeg has no bylaw that explicitly prohibits politicians from doing business with senior officials, or vice versa, the city clerk's office said. But the practice was prohibited under an old code of conduct that has no longer has any legislative teeth.

Nonetheless, Mynarski Coun. Ross Eadie called on Sheegl to resign, claiming cynicism about government increases when the public learns a senior official has sold a company to the mayor.

"If you're running a city and you're supposed to have the skills to do so, you have to know you're not supposed to do that," Eadie said, calling for Sheegl to be fired if he does not resign.

"It's perception. He screwed up and the mayor should fire him. This personal relationship they have is untenable," Eadie said. "I don't care if it was an innocent transaction. What do you need a shell company for? How can we run a city with this going on all the time?"

Eadie was among five councillors who voted against hiring Sheegl as CAO in 2011, arguing the personal relationship between him and Katz would compromise their professional relationship.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 13, 2012 A4

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Body pulled from river is missing 15-year-old girl

View more like this

Photo Store Gallery

  • A squirrel enjoys the morning sunshine next to the duck pond in Assiniboine Park Wednesday– June 27, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Two Canadian geese perch themselves for a perfect view looking at the surroundings from the top of a railway bridge near Lombard Ave and Waterfront Drive in downtown Winnipeg- Standup photo- May 01, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

What do you think of the new Blue Bombers uniforms?

View Results

View Related Story

Ads by Google