Ousted over ginger beef?

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The former Hu's Asian Bistro, which was owned by Mayor Sam Katz. (WAYNE.GLOWACKI / WINNIPEG FREE PRESS ARCHIVES) Photo Store

Given his victories by wide margins in three mayoral elections, it would be remarkable to see Sam Katz leave office over $2,915 worth of Chinese food.

As weird as it is, Winnipeg’s democratically elected mayor faces a possibility of losing power simply because public funds paid for a party at a restaurant he owned.

It all depends on whether a judge decides Katz violated a set of provincial rules governing municipal councils.

Back in December 2010, Katz’s office held a Christmas party for city councilors, department heads and their families at Hu’s Asian Bistro, a Katz-owned restaurant that occupied the Ellice Avenue space now home to Danny’s BBQ & Smokehouse.

The $2,915 tab came to light in February 2011, following a Free Press access-to-information request for the mayor’s spending records. At the time, the mayor’s office and city councilors were not required to post their expenses online, so routine requests for the spending records were made every year.

The results of the request for the 2010 expense records revealed spending chestnuts such as a Community Connections Guide printed up by River Heights Coun. John Orlikow at a cost of $11,325 and an odd accounting entry that made it look like Point Douglas Coun. Mike Pagtakhan ate 15 separate business meals and bought four Facebook ads on the same day.

Katz’s Christmas party didn’t seem like much at the time. When asked about his decision to spend taxpayer funds at his own restaurant, the mayor suggested the Polo Park-area haunt was a favourite among city councilors.

"They love Asian Bistro. Talk to them. Some of them actually take food home from those events. I don’t know why you’d ask that one," Katz told reporters in February 2011. "It’s one of many. That one was picked for that particular event."

What Katz did not say was who precisely made the Hu’s decision. This is important, given that the mayor faces a complaint under the Municipal Council Conflict of Interest Act.

As city hall watchers are aware, Cathay House manager Joe Chan, who has claimed to be an assistant of Daniel McIntyre Coun. Harvey Smith, tried to file a conflict-of-interest complaint against Katz earlier this year. Chan initially claimed the mayor prevented other restaurants from getting a crack at city business.

Chan managed to do a poor job and ended up paying $750 in court costs. But his complaint was kept alive when human-rights lawyer David Matas entered the picture and took on the case.

On April 2, a judge will consider the question of whether the 2010 Christmas party violated the provincial conflict-of-interest legislation. If the judge sides with Matas, Katz will automatically lose his seat, as the legislation offers little leeway in terms of punishment.

Robert Tapper, Katz’s lawyer, maintains the provincial act is intended to apply to decisions made on the floor of council or during a subcommittee meeting. Previous interpretations of the act support this view, according to one legal scholar and a legal argument provided by Tapper.

Since minor spending decisions made by the mayor’s office do not come up for debate on the floor of council, Katz could not have violated the act, if the judge accepts this view.

Legal scholars say a technical argument could be made that Katz did in fact vote for a Christmas party during council’s debate over the 2010 operating budget, which covers all city departments, including the mayor’s office. But that seems like quite a stretch for a judge to accept, especially when the future of an elected official is on the line.

What may prove more important is Section 16 of the provincial act, which covers pecuniary matters, or questions of financial gain. One legal scholar says an argument could be made this section does not apply to committee or council votes.

Section 16 reads as follows: "No councillor shall, himself or through any other person, communicate with another councillor or with an officer or employee of the municipality for the purpose of influencing the municipality to enter into any contract or other transaction, or to confer any benefit, in which the councillor or any of his dependants has a direct or indirect pecuniary interest."

According to the act, the term "councillor means a member of a council, and includes a mayor or reeve." Therefore it’s possible Matas will attempt to use Section 16 to argue Katz told someone in his office to arrange the Christmas party at his own restaurant.

According to the same lawyer, that could prove a compelling argument. The case could then hinge upon who precisely gave the direction to hold the party at Hu’s.

But even if a judge sides against Katz, he may not automatically lose his seat. There’s a concept called "inadvertence" that could result in the mayor being declared in conflict without actually suffering a penalty.

According to several lawyers’ opinions, inadvertence wouldn’t apply because Katz obviously knew he owned Hu’s Asian Bistro. The mayor certainly would not deny he owned the restaurant.

Tapper also argues the court must consider the severe penalty for violating the act — the loss of a seat, which several legal scholars have described as Draconian. Tapper has provided precedents suggesting the court should consider this while making a decision.

Two legal scholars suggest the penalty should not factor into a judge’s decision in any municipal conflict of interest case. While the penalty may be severe, they argue judges cannot ignore the legislation.

Legal scholars say the act was intended largely to govern the decisions made by elected officials in small municipalities, who do not work as politicians full time and do not have advisors.

Mayor Sam Katz is not a small-town mayor. It will be interesting to see what happens next year.

bartley.kives@freepress.mb.ca