Former city official Sheegl appeals order to pay $1.1M to cover police HQ bribe, other costs

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Former Winnipeg chief administrative officer Phil Sheegl is appealing a judge’s order that he pay the city nearly $1.1 million.

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Former Winnipeg chief administrative officer Phil Sheegl is appealing a judge’s order that he pay the city nearly $1.1 million.

The financial order stems from a March civil court decision, in which Court of Queen’s Bench Chief Justice Glenn Joyal ruled that Sheegl accepted a bribe linked to the Winnipeg Police Service headquarters construction project.

In an appeal document filed Monday, Sheegl’s lawyer Robert Tapper claims that decision was “clearly wrong and amounts to an injustice.”

MIKE DEAL / WINNIPEG FREE PRESS FILES Former Winnipeg chief administrative officer Phil Sheegl is appealing a judge’s order that he pay the city nearly $1.1 million.

“The order is contrary to the law, the evidence, and the weight of the evidence,” the document claims.

Joyal found Sheegl accepted a $327,000 bribe from a key contractor in the project, Caspian Construction owner Armik Babakhanians.

“Based on the evidence before me, were I to find that Sheegl’s undisclosed receipt of the $327,200 payment from Armik (for whatever reason), while Sheegl was an officer with the city and while he was negotiating a multi-million-dollar contract with Armik’s company, did not constitute a breach of fiduciary duty, I would in my view be sending a preposterous message,” the written decision states.

A subsequent May court decision concluded that Sheegl should pay a list of damages totaling nearly $1.1 million: $327,200 to equal the alleged bribe (plus $50,000 in interest), $250,000 to equal a severance package he received from the city (plus $32,000 in interest), $100,000 in punitive damages and about $332,500 of city court costs.

The appeal claims Joyal “erred in finding that the plaintiff had satisfied the elements of the tort of bribery.”

It also accuses the judge of “failing to consider that all decisions made in relation to the WPSHQ project were made by extensive layers of committees comprised of the plaintiff’s personnel, such that Mr. Sheegl had no ability to provide Caspian the procurement advantages vaguely alleged by the plaintiff.”

Tapper declined comment on the appeal.

Serious allegations linked to the police HQ at 266 Graham Ave. have plagued city council for years. The building opened in June 2016 at a cost of about $214 million, well above its original $135 million price tag, and an external audit found the project was severely mismanaged.

The RCMP conducted a lengthy investigation into fraud and forgery allegations, but no criminal charges were laid.

The city launched a civil suit against Sheegl and others in 2020, alleging a fraudulent scheme took place. Specifically, it alleged that in July 2011, shortly after Sheegl awarded the contract to Caspian, the company paid $200,000 to co-defendant Mountain Construction (also owned by Babakhanians), which then paid the same amount to Sheegl’s company, Financial Support Services Inc. A year later, the city says Babakhanians paid Sheegl another $127,000.

Sheegl claimed the payment wasn’t a bribe but covered a real estate deal to buy one acre of land he and then-Winnipeg mayor Sam Katz owned in Tartesso, Ariz.

Since the suit was split up into smaller components, the city is still pursuing legal action against other defendants.

The appeal will be contested by the city, a spokesperson confirmed Tuesday.

“The City of Winnipeg is aware (of) and will oppose the appeal,” said Felicia Wiltshire, the city’s communications director, in an emailed statement.

Wiltshire declined further comment.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga

Joyanne Pursaga

Joyanne Pursaga
Reporter

Born and raised in Winnipeg, Joyanne loves to tell the stories of this city, especially when politics is involved. Joyanne became the city hall reporter for the Winnipeg Free Press in early 2020.

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