Winnipeg Free Press - PRINT EDITION

Developers' cash wanted like a sore thumb

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Have the developers been driven out of municipal politics in Winnipeg?

Developers -- a catch-all term that encompasses real estate developers, management companies, builders and construction contractors -- have always played a prominent role in funding municipal political campaigns.

In fact, developers are responsible for pumping more money into the coffers of prospective councillors and mayors than any other segment of the business community. And not just here; developers are big players in municipal politics across Canada.

In this election, however, that could change. In the wake of two damning audits of real estate transactions -- reports that revealed preferential treatment to firms with close personal and business ties to soon-to-be-former-mayor Sam Katz and former CAO Phil Sheegl -- developers have gone from sugar daddies to political liabilities.

Several mayoral hopefuls have already said publicly they will refuse donations from anyone connected to firms implicated in the real estate audits. Given the owners of one of those firms -- Robert and Sandy Shindelman of Shindico -- are arguably the most active donors in municipal elections, that certainly means less overall developer influence in this election.

"Nobody really wants to be seen taking money from developers," said a prominent member of the business community and a fundraiser supporting one of the mayoral hopefuls. "It's not worth the hassle after what we've been through."

All in all, it's not hard to see why developers have been so keen to fund municipal political campaigns.

Local government controls huge inventories of real estate while overseeing all kinds of rules for land use and development. This is a multibillion-dollar industry in Canada, and with stakes that high, developers cannot afford to sit on the sidelines.

That is not to say it's easy to prove a quid pro quo between developers and the politicians they support. Only that it would be fair to characterize these donations as not entirely altruistic. In some instances, great expectations come with those political donations.

Calgary Mayor Naheed Nenshi is still fighting in court with Cal Wenzel, one of that city's most prominent homebuilders. Wenzel made headlines two years ago when a secretly recorded video showed him instructing 150 members of the Calgary development industry on how to "thwart" Nenshi in the next municipal election by throwing their support behind candidates for council that will "swing our way."

Stories like that, and Winnipeg's real estate audits, have done a lot to expose the murky relationship between developers and municipal politicians.

How do these heavy hitters wield their influence in an era where corporate and union donations are banned in most Canadian elections?

Like organized labour, developers spread their support by using employees or family members to make maximum individual donations. In this system, there is no way to prove whether each individual used his or her own money, or whether the company they worked for provided the funds.

If developer money has become scarce, we won't know for sure until after the election, when candidates are required to report all donors. In the mayoral race, however, we will get an advance look at the cheque-writers.

One mayoral candidate (Robert-Falcon Ouellette) has already released a list of his donors, and three other candidates (Brian Bowman, Paula Havixbeck and Judy Wasylycia-Leis) have promised to release a donors list before the election in October.

What we can say is if developers are still pumping money into the campaign, they are getting very little back for their investment. To date, there has been precious little talk about development issues among the mayoral candidates. The one exception so far has been Gord Steeves.

Overlooked in the maelstrom that last week surrounded his wife's angry Facebook post was a pledge by Steeves to "streamline" the development process at city hall by eliminating layers of permits and public hearings. It was a remarkable announcement given the findings of the real estate audits, which revealed a decided lack of due diligence, oversight and deliberation over real estate transactions.

Has Steeves benefited from a glut of donations from developers shut out of other mayoral campaigns? A spokesman would not comment on how many developers had donated to his campaign. The spokesman would only repeat Steeves' pledge to release a list of his donors after the election has concluded.

Are developers sitting this election out? Or are prominent firms, including those named in the real estate audits, focusing their funds on one candidate?

Unfortunately for voters, we will not know the entire story until after all the votes are counted.

Is it good for city politics for developers to sit this one out? Join the conversation in the comments below.

Republished from the Winnipeg Free Press print edition August 22, 2014 B1


Updated on Friday, August 22, 2014 at 6:48 AM CDT: Fixes headline, adds byline, adds question for discussion

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