Police HQ report ‘outrageous’: Kinew

Premier Wab Kinew says public inquiry findings that taxpayers were overcharged more than $40 million for the Winnipeg Police Service headquarters project and two city leaders broke the public trust are “outrageous.”

Inquiry commissioner Garth Smorang’s report, which was released Monday, concluded former mayor Sam Katz “violated the public trust” and council code of conduct, while the city’s former chief administrative officer Phil Sheegl suffered from a “complete lack of a moral compass.”

Smorang also found the city was overcharged $43.3 million for the project, with $42 million of that going to key contractor Caspian Projects.

“It’s outrageous that people who were elected betrayed the public here in the city. It’s outrageous that there were people in business who ripped you off, ripped me off — I was paying property taxes in Winnipeg at the time — and ripped all of us off to the tune of $43.3 million. That’s crazy,” said Kinew.

The report addressed problems related to the headquarters at 245 Smith St., which plagued the city for more than a decade. The building’s initial $135-million price tag rose to about $209 million, the commissioner found.

An external audit found the project had been severely mismanaged. RCMP completed a lengthy investigation into fraud and forgery allegations but no criminal charges were laid.

“It’s outrageous that there were people in business who… ripped all of us off to the tune of $43.3 million.”

Kinew said his government will help prevent such problems from being repeated by implementing all provincial recommendations from the inquiry.

“There’s going to be a lot of action across government in the coming months and years to make sure we don’t let that happen again,” he said.

Inquiry recommendations for the province include that it require a five-year term for the city’s integrity commissioner, provide that person immunity from being sued over action taken in their duties and extend the role’s mandate to cover senior members of the city’s public service.

Kinew declined to weigh in on a Manitoba Prosecution Service statement Monday that new evidence from the public inquiry is being reviewed to determine whether criminal charges could be pursued.

“You guys are going to have a field day if I say anything about the prosecution service,” Kinew told reporters, adding there’s “a line between the prosecution service and anything political.”

Previous prosecution service reviews on the headquarters ended in 2019 and 2025 without charges. Last year’s decision found “the Crown would be unable to obtain a criminal conviction beyond a reasonable doubt,” the statement said.

The service declined an interview request Tuesday.

Brandon Trask, an associate law professor with the University of Manitoba, said details about why criminal charges were previously ruled out would help the public.

“There may be very good reasons that the Crown decided to not proceed with prosecution but we haven’t heard what those are. For the longest time, (it seemed that) nothing was happening on the criminal side. I think that has a risk of breeding cynicism amongst members of the public. If we don’t give people explanations for why the system generates particular outcomes, then that invites the public to come up with their own reasons and that is problematic,” said Trask.

Smorang’s report recommends the prosecution service “seek to be more open and forthcoming in its media releases regarding its decisions not to lay charges” in the future.

Trask welcomed that recommendation.

“If they decide that they’re still not proceeding with prosecution, I think the public is owed a full explanation as to why there were no recommendations for prosecution here, especially in light of the very damning report from commissioner Smorang,” he said.

While there is no time limit on proceeding with potential charges, pursuing them so long after key decisions on the headquarters project were made, largely between 2010 and 2013, could create challenges, such as concerns about the delayed filing of charges and potential evidence being lost over time, said Trask.

Testimony witnesses provided at the inquiry can’t be used against them in future legal proceedings, though some inquiry documents may be admissible, the commissioner’s office confirmed Monday.

Trask said not all inquiry documents would fall into that category, either.

“One of the big principles in our law of evidence says that an individual should not be compelled to provide evidence against themselves. So, if they were compelled to provide documentary evidence to the commission, the public inquiry that took place, then it’s highly, highly unlikely that those documents would be able to be used against them in a criminal prosecution,” he said.

The city has secured millions of dollars from civil legal challenges it raised over the headquarters project.

Following a judge’s ruling that Sheegl had accepted a $327,000 bribe from Caspian, the city received $1.15 million in compensation.

Both Sheegl and Katz have said a payment from Caspian owner Armik Babakhanians was solely due to a land deal. They deny the allegation a bribe took place.

Earlier this year, Caspian Projects paid a $28-million settlement for fraud and construction deficiency lawsuits to the city.

Babakhanians strongly denied allegations his company overcharged the city during the inquiry but acknowledged Caspian turned in hundreds of false invoices to ensure it was fully paid for its work and earned a profit.

Sheegl, Babakhanians and their lawyers did not grant interview requests Tuesday.

joyanne.pursaga@freepress.mb.ca

X: @joyanne.pursaga@winnipegfreepress.com