City went to Arizona court to collect $1.1M from ex-CAO Sheegl

The City of Winnipeg was forced to petition a court in Arizona to collect damages owed to taxpayers from a former chief administrative officer embroiled in the problem-plagued police headquarters construction project.

The revelation came to light on Wednesday, the second day of testimony by Phil Sheegl at the inquiry that’s probing the police HQ project.

The inquiry was told Sheegl had no assets in Manitoba in 2022. That’s when a judge ruled in a civil case that he had accepted a bribe from a key contractor involved in the project, and ordered him to pay the city about $1.1 million, City of Winnipeg lawyer Michael Finlayson told the inquiry.

“So, the City of Winnipeg caused a petition to recognize and enforce a Manitoba judgment in Arizona, correct?” Finlayson asked Sheegl.

“And you contested that. There was a contest about whether the City of Winnipeg should be allowed to have a judgment against you in Arizona. Correct?” Finlayson asked.

“Correct,” Sheegl replied.

Details about the order were revealed as Finlayson grilled Sheegl about a land deal in Arizona that he had arranged with Caspian Construction owner Armik Babakhanians. Caspian was awarded the contract to build the police HQ on Graham Avenue and Smith Street.

Records filed in the Maricopa County Superior Court confirm City of Winnipeg lawyers filed a notice of a foreign country judgment in August 2023, alerting officials there to the Manitoba ruling that ordered Sheegl to pay compensation.

In June 2024, Judge Brian Palmer issued a judgment against Sheegl and two companies that ordered payment of about US$838,300, plus US$48,500 in court costs from the Manitoba court of King’s Bench, records obtained by the Free Press show.

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In an email, a city spokesman confirmed the city took the action “through external counsel engaged in Arizona on behalf of the city.”

“As a result of these efforts, the city received full satisfaction of the judgment against Mr. Sheegl early in 2026,” David Driedger wrote.

Sheegl was the city’s top bureaucrat as it negotiated construction contracts with Caspian to complete the police HQ project, which exceeded its budget by nearly $80 million.

—with files from Joyanne Pursaga and Erik Pindera

tyler.searle@freepress.mb.ca

Tyler Searle
Reporter

Tyler Searle is a multimedia producer who writes for the Free Press’s city desk. A graduate of Red River College Polytechnic’s creative communications program, he wrote for the Stonewall Teulon Tribune, Selkirk Record and Express Weekly News before joining the paper in 2022. Read more about Tyler.

Every piece of reporting Tyler produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.