Winnipeg Free Press - PRINT EDITION

Auditor's unfinished business

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Mayor Sam Katz says he had no knowledge of the flawed civic process involved in building four new fire halls or that the search for a builder was slanted in favour of Shindico Realty, owned by his friend and former business partner, Sandy Shindleman.

The mayor told reporters he wasn't briefed about the dirty details by Phil Sheegl, another friend and former business partner who was forced to resign last week as chief administrative officer.

Like other members of council, Mr. Katz claims he didn't find out about the wrongdoing until he received the audit by Ernst and Young, which said the process breached numerous city policies and was marked by poor management, a lack of transparency and an apparent desire to hide the facts from council.

Mayor Katz and the city's 15 councillors will get an opportunity to protest their ignorance of the facts following a decision by council Tuesday to bring back the auditors so they can be interviewed and the results incorporated into the audit report.

It's not clear why they weren't interviewed by the auditors, particularly since the terms of reference asked them to determine whether council, its committees and councillors were properly briefed by the civic administration.

It seems unlikely the interviews will yield very much new information, but it's a loop that should be closed, particularly with regard to Mayor Katz, who also said he never met with Mr. Shindleman to discuss the process to build the new fire halls.

Some councillors said at Tuesday's special council meeting they found it hard to believe that Mr. Sheegl acted alone in circumventing civic rules for tendering and for disposing of city-owned property. They were also upset that Shindico appeared to have received preferential treatment and that there are no further consequences for anyone involved.

Even Mr. Sheegl's severance package, reportedly worth about $240,000, is beyond the reach of council because it is a personnel matter, according to the city's lawyers.

Coun. Justin Swandel was alone in criticizing the validity of the audit -- "who audits the auditors?" he asked -- but there is nothing stopping Mr. Sheegl from responding in detail, which he has chosen not to do. Neither has Shindico.

As a result, the judgment of the audit stands.

The controversy has ended with a bit of whimper, but stay tuned. A second audit on civic real estate transactions over the last five years will feature many of the same characters and probably the same problems.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien, Shannon Sampert, and Paul Samyn.

Republished from the Winnipeg Free Press print edition October 23, 2013 A10

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