Winnipeg Free Press - PRINT EDITION

Where there's smoke there may, or may not, be fire

Police probe no guarantee crimes committed, charges warranted

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Mayor Sam Katz asks questions July 9 when council was grilling consulting firm EY over its review of city real estate transactions.

JASON HALSTEAD / WINNIPEG FREE PRESS FILES Enlarge Image

Mayor Sam Katz asks questions July 9 when council was grilling consulting firm EY over its review of city real estate transactions. Photo Store

When asked to comment on the news Manitoba Justice had asked the RCMP to review audits of city real estate transactions -- reports that showed rampant rule-breaking and patronage -- Mayor Sam Katz said he hopes this latest chapter in one of the longest city hall soap operas ever will accomplish one thing in particular.

"I hope this brings closure."

That has to be one of the understatements of the year. Not charged with any crime or confronted with any specific evidence of wrongdoing, the mayor, who is not running for re-election, has nonetheless been at the wrong end of the sharp stick for many months now.

One can imagine at this point, Katz would like his critics to either bring charges or leave him to enjoy a life away from politics.

Just about everyone who follows civic politics in this town knows Katz and his good friend Phil Sheegl, the former chief administrative officer, have become the poster boys for morally and ethically questionable behaviour. So much so that Sheegl left his job last year and Katz announced a hasty retirement from politics in July.

The reference to the RCMP should bring closure, but it would be dangerous to read too much into the decision by the province to involve the police.

Manitoba Justice became involved in early July when council asked the province to review the results of the audits.

It's not surprising or unusual the materials sent from the city have been forwarded to the police for further review. The Crown has the final say on any criminal charges, but it is not an investigatory body. The Crown now needs the help of investigators to figure out where to go next.

Unfortunately for Katz and Sheegl, the mere fact of the RCMP review is damning in the court of public opinion.

Their critics will no doubt take every opportunity to portray this as an official police investigation. The legal and administrative nuances of what's really going on are destined to get lost in the rhetoric of politics.

We've seen a scenario like this before. In the 2006 federal election campaign, then-NDP MP Judy Wasylycia-Leis reported to media the RCMP had agreed to investigate a complaint she made about sensitive tax information being leaked from the office of then-finance minister Ralph Goodale, a Liberal.

The allegation was made prior to the campaign. However, for reasons that are still not entirely clear, the RCMP confirmed around Christmas it was investigating.

The news had a devastating impact on the Liberal campaign. Already straining under the weight of the Quebec Adscam scandal, this new allegation of unethical, possibly illegal, behaviour was the straw that broke then-prime minister Paul Martin's back. The Conservative Party won a minority, and the Liberals have languished in opposition ever since.

The punchline to this political narrative is the RCMP ultimately found no evidence of wrongdoing or "illegal activity on the part of anyone," including Goodale himself. That finding, however, was in 2007, a full year after the mere presence of a police investigation helped bring down a government.

Katz is not running for re-election, so is at no risk of having his political aspirations derailed by the RCMP review. It's also very unlikely that the review will be completed before the fall civic election, meaning by the time we have a result of some sort from the RCMP review, Katz will be a private citizen with no obligation to comment on the findings.

Unless of course that review finds more than the audits revealed. The one thing we know for sure about the audits and reviews done to date is they are, in a legal sense, quite incomplete.

Key people were not interviewed and key information was left unexamined. The audits did not have the power to compel evidence or testimony.

This was in part a result of the limited, even naive, mandate given to the auditors at the outset. Many of those who supported these reviews wanted a full forensic audit. What they got was more of a "management review," which identified shortcomings and concerns but never tried to identify who might have benefited from the rule-breaking and patronage.

If the audits accomplished anything, it was to raise a long list of unanswered questions that, in their essence, deserve the attention of police. There is definitely smoke here; the RCMP review, we hope, will attempt to establish whether there was ever a fire.

It's important to remember that the police, and the Crown, are not interested in unethical or immoral activities. The range of possible criminal charges that would typically accompany allegations of these types -- breach of trust, fraud -- are very difficult indeed to prove. All that means the likelihood of criminal charges is remote indeed.

There is a good chance we'll get closure on this sorry tale. It remains to be seen, however, whether we'll get any real answers.

dan.lett@freepress.mb.ca

Republished from the Winnipeg Free Press print edition August 16, 2014 A4

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