The lawyer for former Winnipeg mayor Sam Katz and former City of Winnipeg chief administrative officer Phil Sheegl said news reports linking the pair to land investments in Arizona are "scurrilous" and inaccurate.
Robert Tapper said there was nothing illegal or improper with a Scottsdale, Ariz., investment — known as Toybarn — Katz made in 2015.
"The Toybarn (investment) is well after Sam and Phil were involved with the City of Winnipeg, and I don’t think Phil was an investor, he was just an advisor," Tapper told the Free Press.
The CBC reported Tuesday that Katz was involved in two investments in Arizona that also involved the U.S. division of local industrial developer Terracon Development Ltd.
Terracon has been involved in Winnipeg civic infrastructure and development projects, including as part of the consortium that constructed the Chief Peguis Trail extension. The company is also suing city hall after council decided in 2015 to terminate a joint venture to develop a city-owned industrial park.
The Toybarn investment — which became a luxury condominium project — occurred in early 2015, the CBC reported.
Katz was mayor from 2004 to 2014, when he did not seek re-election. The new council took office in November 2014. Sheegl quit his post as CAO in October 2013.
The CBC referenced a second investment deal it alleged involved Katz and Terracon that occurred sometime in 2014. It said Katz’s Scottsdale home was listed as the business address for the investment group.
However, the CBC said a Terracon official had told it in 2016 Katz’s involvement in the 2014 deal was the result of a clerical error made by a U.S. lawyer, explaining Katz was never involved in that deal. The CBC reported Katz's address was removed from the paper work shortly afterwards.
Tapper said there should be no grounds to ask questions about Katz’s business dealings — either while he was in office or when his time as mayor was over, explaining there are no legal prohibitions involving the business arrangements of an individual elected as mayor.
"Whatever you might think about the ethics of that, there is no blind trust issues with being a mayor and being a businessman. (Katz) was elected as a businessman. The people knew he was a businessman," Tapper said.
"There was no obligation on him to park his assets and business interests in a blind trust. That’s true for certain elected officials — not for the mayor of Winnipeg, or any other mayor that I’m aware of."
Katz’s Arizona business dealings surfaced in early 2017, when it was explained as a defence against allegations he had shared a secret payment for awarding a construction contract.
In January 2017, Katz and Sheegl became linked to an RCMP investigation into the downtown Winnipeg police headquarters project when a police affidavit filed in court alleged Sheegl had accepted a secret $200,000 payment from Armik Babakhanians, owner of a construction company that had been awarded the headquarters contract.
The RCMP alleged the $200,000 payment to Sheegl had been made in exchange for his help in awarding the contract to Babakhanians’s firm, Caspian Construction. Police allege Sheegl then shared those funds with Katz.
Tapper said, at the time, the $200,000 payment between Babakhanians and Sheegl was a business arrangement stemming from a 2011 Arizona real estate deal. Tapper said Babakhanians had bought a share in an interest in property held by Sheegl and Katz.
The RCMP investigation has been ongoing since December 2014. There has been no indication when, or if, charges will be brought against any of those under suspicion.
Updated on Tuesday, April 9, 2019 at 3:15 PM CDT: New photo.