The Black Rod

The origin of the Usher of the Black Rod goes back to early fourteenth century England . Today, with no royal duties to perform, the Usher knocks on the doors of the House of Commons with the Black Rod at the start of Parliament to summon the members. The rod is a symbol for the authority of debate in the upper house. We of The Black Rod have since 2005, adopted the symbol to knock some sense and the right questions into the heads of Legislators, pundits, and other opinion makers.

Location: Winnipeg, Manitoba, Canada

We are citizen journalists in Winnipeg. When not breaking exclusive stories, we analyze news coverage by the mainstream media and highlight bias, ignorance, incompetence, flawed logic, missed angles and, where warranted, good work. We serve as the only overall news monitors in the province of Manitoba. We do the same with politicians (who require even more monitoring.) EMAIL:

Sunday, September 30, 2012

Mayor Katz: Up to his neck in the quicksand of scandal and sinking fast.

Sam Katz, Mayor of Winnipeg, made the worst mistake of his political life last week.

Instead of stifling suspicions over the odd circumstances of his purchase of a house in Phoenix, Arizona, Katz managed, with a disingenuous answer to a simple question, to stoke the mystery to new heights. Ooooh, so not good.

Confronted by aggressive reporters, Katz was peppered with questions about how he came to be buying a house at a discount from the sister of the Chief Finance Officer of Shindico Realty, the company at the heart of not one, but two, audits of how the city conducts its real estate business and whether Shindico gets preferential treatment.

Visibly nervous, he dismissed any suggestions of impropriety, often with a prepackaged answer: "I purchased a home in Arizona. I paid fair market value." The scrum running out of steam, one reporter threw out a softball question. When did the mayor buy the house?

"I purchased a home in Arizona. I paid fair market value." said Katz, avoiding the question. 

Now why would the mayor be ducking such a simple question? It makes you wonder. Or, as Columbo would say, "Just one more thing, Mr. Mayor..."

Taking a broad overview of the known facts, we have...

* A woman living in Colorado buys a newly built house in a suburb of Phoenix, Arizona in October, 2008, for $1.5 million. Cash, no mortgage. Her husband signs off on any financial interest in the house, which, we repeat, sold for $1.5 million. Isn't that what husbands do? Turn a blind eye to the wild purchases their wives make without checking the Visa bill item by item? Yeah, sure.

* The woman fills out an affidavit where she swears to a notary public that the house will "be occupied by (the) owner or family member."

* But the very next year, a man who is not her husband is listed in the city directory as living in the house, a man who has an ex-wife living about 15 blocks away.

* And by 2011 the tax bill is sent, not to her husband's home, but to the home of the other man in Winnipeg, so that he, presumably, will pay it even though it's in her name.

* Four years after buying the house, the woman from Colorado accepts $10 from the man in Winnipeg and transfers ownership of the Phoenix house to him for that "and other valuable consideration." The deed is recorded as "payment in full."

Oh, no, nothing suspicious here, Lt. Columbo.

Well ... maybe that part about when the man in question, Sam Katz, Mayor of Winnipeg, actually paid for the house and why he's being so evasive about it.
Katz told reporters he paid a million dollars for the Phoenix house. Asked where he got so much money to buy a house without resorting to a mortgage, Katz said he was a self-made millionaire who raked it in when he sold his Winnipeg businesses, apartment blocks, and other investments after being elected as mayor. He presumably meant in 2006, not the byelection in 2004.
So Katz was sitting on a mountain of money, slightly dented following his divorce from his first wife, Baillie, in early 2007. And sometime during the next five years he decided to drop a million smackers cash on a house in Phoenix, a house that somebody else also bought for cash.


A professional cynic like Columbo might look at the timeline and ask whether the woman in Colorado was acting as a cutout to buy the house for Sam Katz without leaving a paper trail with his name on it. The fact that she is the sister of the wife of Sam Katz's business partner in the Winnipeg Goldeyes ballpark doesn't do anything to dampen suspicion.

And speaking of suspicion, million dollar cash purchases in the United States often attract the attention of police agencies whose job it is to track money laundering or illicit asset transfers. Especially if there appears to be an effort to avoid leaving a paper trail by the principals.
Luckily there's no hint of money laundering or illicit asset transfer in Katz's purchase of a house in Phoenix, although the lengths to avoid a paper trail might require some explanation.

Just as the claim that the Phoenix house would be occupied by the buyer or a relative might require some explanation. Given that Katz is not a relative, if he was the sole occupant, then the claim on the notarized buyers' affidavit might be seen as perjury. But that wouldn't involve Katz except peripherally, as a witness against his partner's sister-in-law.

Not that the mayor needs more embarassment.

Katz was mortified at Thursday's session of city council when he was forced to stand and vote in favour of a motion from Councillor Jenny Gerbasi --  calling for a thorough audit of the city's real estate dealings starting with the past five years, and extending to ten if the auditors choose. The vote was unanimous and Katz would have looked the right fool if he hadn't joined the 'aye side.

The shamed mayor knew, if reporters didn't, this was sweet revenge by Gerbasi for an insult Katz hurled against her in 2008 when he was pushing the city to hire his best friend Phil Sheegl as Winnipeg's chief operating officer, effectively the most powerful job in the city with more power to hire and fire and negotiate contracts than even the mayor holds.

Gerbasi questioned Sheegl's qualifications, leading an exasperated Katz to sneer,
"When it comes to ability, intelligence and integrity, Coun. Gerbasi wouldn't even qualify to be in the same building, let alone the same room, as Phil Sheegl."

Thursday, a humbled Katz had to grovel before Gerbasi and support her motion, which everyone knows paints a bullseye on Sheegl. Sheegl himself sat frozen behind his benefactor, knowing full well that his remaining time at city hall is probably measured in months, not years.
Sam Katz's personal credibility is in shreds. Like Humpty Dumpty he will never be put together again and everyone knows it.

He tried for a month to control the scandal swirling around him, then to distance himself from it, and finally to pretend he's leading the charge to get to the bottom of it. Nobody's buying a word.

How could they?

Katz was nonplussed when CBC broke a story Aug. 23 that Shindico Realty had a city property, a dis-used fire hall, up for lease---even though the site has never been declared surplus. It wasn't the first time Shindico put a city property on the market before it was declared surplus and suspicion was raised that maybe Shindico owner and Katz friend Sandy Shindleman was getting a gentle assist in business from somebody on the inside. Hint hint.
Nobody at city hall seemed perturbed. The listing was pulled; Shindleman said it had been up in error.

Winnipeg's property director Barry Thorgrimson said the land was "technically" surplus anyway because the firehall on it had already been replaced. The Fire Chief revealed the land was part of a land swap he had personally negotiated with Shindico in exchange for some land Shindico owned on which a fire station in River Heights had been built.
Say what? City councillors began asking about this other firehall and discovered an unknown Shindico connection to the construction of all four new fire stations dating back to 2010.
Katz jumped in then with his own take. Everybody, he said, knew that two of the fire stations that had been replaced were going to be declared surplus. So what was the big deal?

It seems the deal was that the city built a firehall (Fire Station #12 to be precise) on land it didn't own, the land swap had been a secret from city councillors, and nobody was sure that the value of the land we were giving Shindico was equal to the land under the fire station. And the contract to Shindico was untendered. And had been structured to keep city councillors from knowing who the contractor was.

Katz rushed to get ahead of the steamroller. He went on CJOB and disowned Sandy Shindleman, declaring he hardly knew the man who just happened to own some shares in the Goldeyes. And, he said, he wasn't happy with the land-swapping fire chief, either. He deserved a good fingerwagging.
Then, on Aug. 31, Katz's handpicked CAO joined five other city bureaucrats in an unprecedented news conference to declare everything about the firehalls was on the up and up. And city councillors should zip it because he, the mighty Phil, would tell them what they needed to know, maybe in September, maybe in October.
By coincidence this is the very day Katz took ownership of the house in Phoenix. Did he know something nobody else in Winnipeg did?

When, in early September, Jenny Gerbasi called for an audit of the real estate division going back at least three years, Katz declared nothing of the kind was warranted.

Instead, he announced a review of the land swap would be conducted by, guess who, Phil Sheegl and the city's financial officer, Mike Ruta, two of the bureaucrats who had already cleared the department of wrongdoing at the strange gang-newser.

There's a story about that "review" we haven't been told yet.

But before it could be presented to city council, leaks out of city hall revealed that it was being scrapped and in its place the city auditor was launching his own audit of the firehall construction and land swaps.

The mayor, still leading from behind, rushed to announce that he was fully in agreement with an official audit rather than the whitewash review he was expecting.

But by then, nobody was listening to anything he had to say. They were talking about the news that back in February Phil Sheegl had sold Katz one of his defunct companies in Phoenix for one dollar.

Problem was, as the mayor himself said, it would have cost him $3000 or $4000 to hire a lawyer and set up a company on his own. So, in effect, he got a $4000 financial benefit for $1 from his best friend Phil Sheegl, the man he assigned to examine how his other friend Sandy Shindleman got a sweetheart deal on the firehalls contracts.

And then, this latest news. Sandy's wife's sister bought a house for $1.5 million in 2008 and turned it over to Sam Katz in August for $10. Cash. No realtor. The bare minimum paper trail.

If Katz escapes with only two audits, he will be lucky.

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Monday, September 24, 2012

Killing the messenger. "I don't read the paper."

What's the penalty for unnecessary roughness?

An unsuspecting journalism student walked into a buzzsaw of devastating criticism Sunday after innocently accepting an offer to write a column for the Winnipeg Free Press about the impact on her, the future generation of reporting, of the latest round of layoffs at the newspaper.

Her crime? Honesty.

Honestly. The daylong stomping she got in return was totally unwarranted. Honestly.

Stefanie Cutrona is a student in her third week at Red River College's Creative Communications program. She stepped up when somebody at the FP thought it would be a great idea to ask what students looking to enter the profession thought when they saw newspapers laying off their youngest staffers. It was a great idea.

But 19-year-old Stefanie never imagined the backlash that would be unleashed when she gave her honest opinion. She still may not realize that it all stemmed from her very first sentence: "I don't read the paper."

Anything she wrote after that was lost in the cacophony and vitriol raised and thrown her way, starting with a verbal assault by mainstream reporters.
Steve Lambert, of the Canadian Press, tweeted:
I find it weird that a column titled 'what's wrong with the newspaper" inadvertently displays what, imo, is wrong with current trend...a column devoid of hard facts or stats, just musings in the first-person.

James Turner, of the Winnipeg Sun, jumped in:
@stevelambertwpg from a person with zero actual authority to make predictions.

Even Alison Mayes, one of the laid-off seven, thought she should pile-on:
" I just wrote a very long reply to Stefanie and then deleted it. What can you tell an entitled, uneducated 19-year-old who thinks she has journalism figured out? All you can do is laugh."

It went downhill from there.

What was lost in the verbal stomping being delivered was that Stefanie was only speaking the truth as she knew it.

She wasn't pontificating about the future of news delivery. She was laying out the challenge to newspapers---the next generation, her included, doesn't get their news from the papers.
But that doesn't stop her from wanting to be part of the news revolution whatever it might be.

She may not have realized that the assault on her was also born of honesty -- reporters honestly scared of that future. They know she's right. They see that the industry they are part of is dying. And when you're suffering the death of a thousand cuts, you don't know which cut will be the final one. If it's not this one, will it be the next?

It's that fear that precipitated the over-the-top attacks on a 19-year-old student who was excited at getting into print for the first time.

The one thing her column managed to do was take the heat off two of the veterans at the Winnipeg Free Press who had written their own columns about the layoffs of seven of their colleagues. Gordon Sinclair and Dan Lett.

Sinclair's column commiserating with the laid off seven was especially ironic given the reaction from the strongest supporters of the dismissed employees that the newspaper should have gotten rid of its "deadwood" before its youngest staffers. And by deadwood they invariably mean Junior.

But what they don't know is that Sinclair -- and Lett, too -- will never be laid off. They have a lifelong guarantee of their jobs. It's in the contract. Life or retirement, whichever comes first. So columns filled with crocodile tears don't cut it.

Lett, on the other hand, used the layoffs to lecture readers about the economics of the newspaper business. Advertising is down, societal forces are driving newspapers to offer their product on the Internet for free, and they can't make money giving away the news for free.

He said the latest layoffs were not done to save the newspaper money.


They will save the paper more than half a million dollars, though. Melissa Martin, the only news reporter to get the axe, was making more than $73,000 a year and due to get a raise on Oct. 1st. (Lett and Sinclair make $80,598 a year.)

There's a more likely reason for the layoffs.

The union contract expires Oct. 1, 2013. Was this a shot across the bow of the union? Go on strike again and watch every job added in the last decade disappear? The layoffs went back to 2004; there's still a good cushion before the staff list dates back to the last century.
As for the future, nobody seems to be discussing that two of the seven layoffs were from the much-touted Free Press News Cafe.

That experiment has been gutted. It was intended to lure new and younger readers by letting them meet and mingle with actual reporters doing actual reporting from the cafe. A bold idea that obviously failed to live up to its goal.

" These layoffs only further reinforce the sentiment that journalism is a dying profession, instead of reinforcing what it should be: that it is an evolving one." wrote Stefanie Cutrona.

What will that evolution look like?

Perhaps the answer lies with one of Canada's most famous thinkers, a media philosopher with a Winnipeg connection. None other than Marshall McLuhan.

Not his most famous dictum, that "the medium is the message."

But his other observation which we paraphrase as "when one technology supercedes another, the older technology becomes an art form."

News reporting as an art form. There's a thought.

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Wednesday, September 19, 2012

Heritage Minister Moore talks of CMHR compromise --- and mismanagment

Infuriating tales of board mismanagement and government malfeasance that cost taxpayers more than $70 million peppered a recent update on the jinxed Canadian Museum for Human Rights by Heritage Minister James Moore.

Only a tiny audience of 16 showed up to hear Moore at the Winnipeg Free Press News Cafe, and it's hard to say how many could separate the eye-opening inside stories from the pure falsehoods being peddled to justify the federal government's blank cheque to save the failed project from insolvency.

One person who certainly needs to listen to the interview with Moore
is Canada's auditor general who should be curious about questionable, if not fraudulent, government spending on the CMHR.

Moore started by floating the idea that there were two main reasons why the budget for the museum has ballooned from $265 million in 2009 to $351 million today, enough to derail the project without an emergency government financial transfusion.

First, said Moore, a few years ago the museum's board of trustees decided to be greener-than-thou and to build the museum to a Gold LEED standard. (That stands for Leadership in Energy and Environmental Design.)

"That came with a price tag -- if memory serves -- a $37 million price tag."

That decision was made, he said, "without identifying the source of the funds" needed. The board just assumed
"taxpayers will pay for it". That wasn't "exactly a wise or prudent move," Moore said.

The second reason for the giant cost overruns, claimed Moore, was the unexpected rise in the price of steel.
"When the cost of steel goes up, we can't foresee that," said Moore.

That, to put it bluntly, is a flat-out lie.
It was a lie we addressed in The Black Rod more than 3 years ago. Note the title of the piece.

At the time, May, 2009, we pointed out that Arni Thorsteinson, the chairman of the board of the Canadian Museum for Human Rights, had been quoted in the newspaper more than a year earlier -- in January, 2008 -- warning about the skyrocketing cost of construction.

"...soaring construction costs, which, Thorsteinson said, have increased by 40 per cent in the last two years"."

So the cost of steel was a known factor to the museum board BEFORE construction of the museum had even started.
Why is Heritage Minister James Moore trying to justify the museum's cost overruns?

The CMHR revealed last December that the cost of construction had climbed another $41 million. Moore told his audience that the federal government had by then, so little confidence in the museum board, that it went to the auditors Price Waterhouse Coopers to ask for a third party validation of the numbers. The feds wanted their "absolute honest assessment" for the cost to finish the museum.

"We want an absolute number to finish this building in 2014," was the way Moore put it.

The answer came back five months ago -- $351 million with contingency built in, an echo of the figure put forward by the CMHR in December. It's unclear whether Price Waterhouse included the $6.5 million it will cost for a theater and temporary gallery which the CMHR excluded in its $351 million cost.

"And we said 'there's no budging from that'," said Moore, trying to act like a fiscal hardliner.

Remember that when the CMHR comes back for more money.

The CMHR was $61 million short of the money needed to finish the project by the new estimated opening date of 2014 (two years behind schedule). Moore was quite proud of the solution proposed by his office to give the museum another $35 million while pretending the federal government wasn't breaking its pledge to taxpayers not to increase its original commitment of $100 million in funding.

The answer, he told his audience, was to pretend the government was giving the museum an advance on its own money.

Ottawa had promised $21.7 million a year to the CMHR for operating expenses. The government would now cut that in half for the next three years, with half going for operating costs and the other half going towards construction costs. When the museum finally opens, in 2014 if all goes as planned, the full $21.7 million in operating funds will be restored.

But here's the problem.

The museum has never received $21.7 million in operating funds
. Last year it spent $11 million. And it seems it will only get about $11 million a year for the next three years, which is apparently sufficient.

The $21.7 million was only, repeat "only", going to be provided after the museum was officially opened. If the government is saying it was prepared to give the CMHR $21.7 million a year for three years before the museum was open, what were they going to spend the extra $10 million a year on?... Ten million dollars they didn't need for expenses.  
The auditor general should be interested in why the Harper government was about to hand over $21.7 million a year to the CMHR to cover $11 million in expenses.

More to the point, there is no extra $10.7 million or $11 million or $12 million a year to go towards construction. That money was never going to go to the CMHR in the first place.

That means the $35 million the government is giving the museum project is NEW money, money that certainly is a new cost to taxpayers.

Oh, and the CMHR still isn't paying its share of property taxes.

And speaking of budgets ... there isn't one, have you noticed?  
The CMHR is legally obligated to produce an annual report which includes a budget. There is no annual report for 2011-2012. At least, the federal government doesn't have one and the CMHR doesn't have one posted on its website. 
How bad are the numbers they're hiding? 
Heritage Minister Moore did have some interesting news on the outstanding controversy eating at the CMHR over its decision to elevate the Holocaust over all the other ethnic genocides in history in the promotion of human rights.

Leaders of ethnic groups across Canada have called on the CMHR to treat the story of all genocides equally, without favouring one over the others. Supporters of the CMHR, including board member Gail Asper, reacted by launching a smear campaign against Canada's Ukrainian community with false allegations of anti-Semitism. The campaign backfired badly, with donations to the CMHR dropping like a stone to barely $3 million last year from $10 million two years earlier.

Moore said the board of the museum made a big mistake back when it was trying to convince the federal government to come up with $100 million to fund the CMHR. To prove it had the support of Canada's ethnic groups, the museum board was auctioning off square footage in the museum to whatever groups came up with the most money, Moore revealed.

The solution since adopted is to devote space only to the five genocides officially recognized by the Canadian Parliament---the Armenian genocide, the Holodomor, the Holocaust, the Rwanda genocide and Srebrenica.

The compromise is to treat the Holocaust equally with other ethnic genocides in one gallery, ‘Breaking the Silence’, while still giving the Holocaust a separate gallery 'Examining the Holocaust’, complete with artifacts and first-person accounts.

Winnipeg Free Press columnist Dan Lett asked a long, leading and convoluted rhetorical question, something about whether a separate gallery looking at the Holocaust in the context of international human rights law was a fair use of space and not divisive.

Moore replied that anyone who draws that conclusion "is somebody looking for a fight."

But, knowing it or not, it may be Heritage Minister James Moore who could wind up looking for a fight.

Moore said he has told museum president Stuart Murray "many times" that:

 "this museum is NOT going to be --- CANNOT be --- a source of division in this country. Because taxpayers are not going to pump in $21 million per year to operate this museum if they see it as a perpetual source of division for the people of Winnipeg, the people of Manitoba and the people of Canada."

He ordered Murray to come up with "a formula" whereby matters that risk becoming divisive are addressed.

Tough talk, but its no different than what was written in letter to the former Liberal Heritage Minister in 2008 where an appointed Advisory Committee on the Canadian Museum for Human Rights pitched the project, including this recommendation:
33.Develop a Protocol to Respond to Criticism –Develop an explicit policy and procedures for dealing with criticism, which will allow critics to be heard, their views to be considered, and to find win-win alternatives when possible.

But the board of trustees believes it ultimately has full autonomy from government which is reflected in this mission statement:

"Directly related to the need for Board autonomy is the fact that there is a public expectation that the CMHR will address controversial issues in a proactive, engaged and balanced manner. This social responsibility will bring with it specific governance challenges which will require distance from government yet engagement with all interested stakeholders."

"The CEO and senior management team of the CMHR will need to have the courage to act with conviction and independence while remaining diplomatic and inclusive. They will require tremendous support in their roles from the Board of Trustees."

It remains to be seen how Moore and the CMHR will fare in a clash of wills.

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Friday, September 14, 2012

Seen... Phil Sheegl sitting in Shindico's corporate seats. Hmmm

Six months ago it was a piece of gossip posted on a message board for architects and urban design enthusiasts.

Today, it's another notch in the noose tightening around Winnipeg mayor Sam Katz.

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Posted: Mar 1, 2012, 4:59 PM
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42 posts - 20 authors - Feb 8BKB. Mar 1, 2012, 4:59 PM.
Seen at a recent Jets game: Phil Sheegl sitting in Shindico's corporate seats. Hmm..

So the mayor's best friend, and the most powerful administrator in the city, is enjoying the hospitality of the mayor's longtime friend and business partner at the most sought-after sporting event in town
Titillating, sure, but it would be of passing interest only --- if it wasn't for the scandal sweeping the city which involves preferential treatment in city business for the mayor's friend and business partner and a cover-up of that relationship, which may include the mayor's best friend, and maybe even the mayor himself.

Sam Katz is rapidly running out of cards to play to kibosh the scandal behind how Shindico Realty got four non-tendered contracts worth a total $15 million to build four new firehalls, including one built on land that's still owned by Shindico.

He tried putting distance between himself and Shindico owner Sandy Shindleman. Shindleman, he told CJOB, owns some shares in Katz's ballpark and is hardly a close friend. He implied they would have at most a nodding acquaintance if they passed on the stairs.

Nobody believed that for a second.

A couple of days later, six city administrators held an unprecedented joint news conference to say everything done regarding the firehalls deal was done completely properly and according to the rules. Front and centre were chief financial officer Mike Ruta and Chief Administrative Officer and hockey fan Phil Sheegl.

The team press conference failed to convince anyone. The stench of scandal still hung over City Hall.

Katz decided that if a little whitewash didn't work, maybe a lot of whitewash would.

He announced he was ordering CFO Mike Ruta to review the one aspect of the firehall deal still outstanding---the verbal deal to swap three city owned properties for the Shindico land on which a new fire station in River Heights had been built.

His pal Phil Sheegl would help Ruta investigate how his pal Sandy Shindleman got preferential treatment on one of the four firehalls contracts.
The absurdity of this Hail Mary review escaped no one. Ruta and Sheegl had already declared the deal was clean as the proverbial hound's tooth.

Were they now going to do a total reversal and discover that the City of Winnipeg had been snookered into overpaying Shindico for its land?


But, but, but, said Katz, there's more. The "review" had grown like Topsy.

Originally struck to look at the balancing values of the land swap, it was now going to include "the processes that led to the deal", according to the Winnipeg Free Press. Oh, and the city auditor was going to be involved and external appraisers. And it was going to be finished really, really quickly, in 10 days or so.
Katz wasn't convincing anyone. You can see right through the gambit.

1. Whip up a report about one small corner of the scandal.
2. Have the report clear everyone but with lots of recommendations to "tighten up" procedures.
3. Involve the auditor.
4. Then wave the report around and declare that the auditor has investigated the scandal, found nothing and it's time to move on.

Nope. Not gonna happen.

The whole Firehalls Scandal needs to be investigated by an independent tribunal which doesn't include any close personal friends of Sam Katz, especially when they may be targets of the investigation.

Let's start with the phony review ordered with such great fanfare by the mayor.

A)  What are the written terms of reference?
B)  Have they changed since the review was first announced last week?
C)  What is Sheegl's role?
D)  How will Sheegl's involvement in the scandal be treated by the Ruta/Sheegl review?

His what?

Well, Sheegl told reporters last week he was aware of the secret negotiations involving a land swap for the new River Heights fire station. It was at "50,000 feet" he joked, implying he was far removed.

Well, we need someone with an altimeter to determine exactly how many feet away Sheegl was
from the knowledge that Shindico had an untendered contract to build not one, not two, but four firehalls.

And who did he tell? His pal Mayor Sam Katz?

And if Sheegl knew of Shindico's involvement in the River Heights station, why didn't he inform city council?
As CAO he would know that council told the fire department they wanted to know the identify of the contractor who would be building the new fire stations. Or does Sheegl think he's above the will of the elected representatives, too?

The Ruta/Sheegl "review" won't come close to answering the vital questions of the Firehalls Scandal:

-  WHY did then-Deputy Fire Chief Reid Douglas give an untendered contract to Shindico Realty to build four new fire halls?

City Council approved funding in July, 2010, through a federal infrastructure program. Construction of the  new fire station in Sage Creek didn't begin until more than a year later. And the other 3 firehalls were built using the first as a template, reducing their need for time-consuming design work.

Even if Shindico got the first, why weren't any other contractors allowed to bid for the other three?

WHY did Douglas disobey city council's direct order to bring the name of the winner of the contract back to council? Did he consult with anybody in the city administration or city legal department about his obligation to follow council's order?

WHEN did Douglas decide to deceive City Council by dividing the firehalls project into four smaller projects, each with a budget under the limit that required him to get council's approval to proceed? Let's see the emails and memos regarding that decision.

-  WHO helped Douglas keep Shindico's name secret?

Douglas used city appraisers and city lawyers to make his deal with Shindico, but Property director Barry Thorgrimson says he knew nothing about it. Even when there were public meetings about the new fire stations, nobody was told Shindico had the contracts for all four. Why the secrecy?

-  WHEN did Phil Sheegl find out about the discussions for a land swap with Shindico?

How did he find out? Why didn't he ask for more information? Why didn't he tell anyone on council?

Or did he?

Did he discuss the firehalls mega-project with Sandy Shindleman over a friendly beer? With Sam Katz while carpooling?

WHAT did Sam Katz know about the Shindico Realty involvement in the firehalls projects and when did he know?

Right now, nobody believes Katz knew nothing. The deal involved $15 million and his longtime friend and business partner. They never spoke about it in two years? Did they even speak in those two years, or is Katz hinting they had a falling out? Is the romance gone?

On Oct. 7, 2011, Katz appeared at a news conference with Public Safety Minister Vic Toews at the site of the Sage Creek fire station to announce infrastructure loans for the firehall projects.

He didn't learn then that Shindico was involved?

Because if Katz ever knew that his friend Sandy Shindleman had the contracts, he was obligated to follow council's instructions and bring that information to city council.

Was he part of the cover-up?

None of this is going to be explored by the Ruta/Sheegl whitewash report.

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Friday, September 07, 2012

The Firehall Scandal.What did Sam Katz know, and when did he know it?

Winnipeg Mayor Sam Katz is playing a dangerous game by intervening personally in the Fire Hall Scandal that's swirling around his friend and business partner Sandy Shindleman.

You would expect a politician to put as much distance as possible between himself and a career-ending financial controversy. Instead, Katz has jumped into the fire with both feet by ordering a blatantly biased, deliberately narrow, suicidal "investigation" of allegations of impropriety in the awarding of building contracts to his friend.

The "investigation", to be conducted by another of Katz's close friends, won't convince anyone. But it will raise questions about whether the mayor had any involvement in the conspiracy and cover-up that's at the heart of the scandal.

The Fire Hall Scandal can be divided into two parts:

* the secret land swap with Shindico Realty, and
* the secret awarding of a $15 million contract to Shindico to build four new fire stations

When the City of Winnipeg took out a loan from CMHC in 2009 to build four brand spanking new fire-paramedic stations, they told the fire department to report back with who got the contract. Instead, the deputy fire chief kept the information secret, splitting up the contract into four, one for each firehall, effectively keeping the project off city council's radar. Since each contract was worth less than $10 million, the deputy fire chief had the technical authority to spend the money on each firehall without council's approval and without telling them who was getting paid.

One fire station, in River Heights, was built on land owned by Shindico. The fire chief made a verbal deal with Shindico to swap that land for three city-owned parcels of land, a deal that wasn't known to anyone until last month.

Katz, trying to head off calls for a broader investigation, has asked the city's Chief Financial Officer Mike Ruta and the Chief Administrative Officer Phil Sheegl to allegedly determine if the land swap is a good deal for the city or if we got snookered.

Given that Sheegl and Ruta took part in an unprecedented news conference of top city administrators last Friday in which they announced that everything city officials did regarding the Fire Hall Scandal was on the up-and-up, we can guess with 100 percent accuracy their conclusion about the land swap.

On paper, Sheegl might look like a perfect candidate to weigh the relative merits of a land swap.

Sheegl has made a career in real estate and property development for almost 30 years. Before being appointed to CAO of Winnipeg, he was head of the Board of Revision, the tribunal that hears your appeal of your property assessments.

But he's a close, personal friend of Sam Katz's. He even sold Katz's house in the Eighties. They socialize together. They play sports together. Sheegl had business connections in Phoenix, Sam Katz's second home.

To have one friend "investigate" another friend just doesn't fly. In fact, how can Sam Katz be involved in any way in the Fire Hall Scandal except as a suspect? It involves his business partner. He has to recuse himself from all discussion by councillors on how to handle the scandal simply on the basis of conflict of interest.

Complicating matters even more is the comment by Sheegl this week that he was aware of the land swap before it was revealed to the public. He joked that his awareness "was at 50,000 feet", implying he was far removed from the information. Are we to take his word for it? The public suspicion is so great that Sheegl must do more than joke about what he knew, he must be specific, provide dates and witnesses.

A $15 million secret contract between friends is no joking matter.

Since our last examination of the details of the scandal, we think we've developed a better understanding of the dynamics of how it unfolded:

-  In 2009, Winnipeg originally considered building the four firehalls as private-public partnerships under which private developers would build and own the stations and lease them to the city.

-  The project was being handled by Deputy Fire Chief Reid Douglas. The Chief, Jim Brennan, was a paramedic not a firefighter and would retire in 2011, so you can see why Douglas got the task.

-  A request for proposal was issued to a group of pre-selected contractors in 2010. But by the deadline in May, only one---Shindico Realty---had responded.

-  The issue became moot two months later when city council approved taking a loan for $9.7 million from CMHC to build the four firehalls. (The city and province would top up the $15 million budget.) However, the money came from an infrastructure stimulus fund created by the federal government, and carried a stipulation that all projects be finished by March 31, 2012.

This is their out. They will argue that faced with this deadline, they didn't have time to put the contract out for new bids. They reached into the drawer, took out Shindico's RFP response, and gave them the contract.

Or, rather, contracts.

Because Douglas split the big project up into four smaller projects.

Did he deliberately defy city council by denying the knowledge of who got the project? Or will he argue that it was an oversight, again because of time constraints?

Nevertheless, there seems to have been a deliberate conspiracy to hide the details of the replacement for Fire Station No. 12 in River Heights. While you can find news stories telling where the other 3 firehalls were going to be built, there's never any location for F.S. 12 until after.

It didn't matter when the firehalls were going to be 3P. In fact, building the River Heights station on their own Shindico land gave them an edge in bidding. But once the rules changed, the land issue became touchy.

Maybe Shindico didn't want to sell the land on Taylor where the fire hall was eventually built. Maybe they tried to hang onto the idea of owning the land and leasing it. That wouldn't fly. The city couldn't build a fire station on land it didn't own, could it? Ha ha.

So is that when the land swap entered the picture? But land swap was a dirty word, especially when wedded to Taylor Avenue.
City council faced an unexpected wave of opposition in 2009 when it revealed it had approved a land swap with a developer under which he got 25 hectares of land near Taylor and Waverley, in exchange for four hectares he owned along the Fort Rouge railway yards. The developer was planning to build 3,500 townhouses, which the city's property manager at the time, Phil Sheegl, thought was a great idea because of all the taxes it would bring.

And, wouldn't you know it, during the 2010 civic election, the issue was raised all over again. You wouldn't want to raise another land swap when one land swap controversy already threatened to swamp the mayor, would you?

By late March, 2011, Reid Douglas told the press there were "ongoing negotiations" regarding the River Heights firehall. In September, 2011, he said construction was expected to start by "the end of the month", although where, he didn't say.

Interestingly, it wasn't until November, 2011 that Shindico got the contract for Fire Station No. 12, and not until August, 2012 that that contract was made public on the city's website.

But somebody was getting nervous in late '11. On February 2, 2012, a caveat was filed by the city on the land where the fire station was being built binding the city to buy the land for $990,000.

Reid Douglas now says that if city council rejects the land swap, they've got to pay Shindico its asking price for the land holding the firehall.

How much of this did Phil Sheegl know? How much did Sam Katz know?
Was his business partner involved in a $15 million project and they didn't have a beer and talk about it, mano a mayoro? Did his other close friend find out about it and not mention it over a hot dog at the ballpark?

The Sheegl-Ruta investigation is designed to ward off questions like that.
Katz will wave the final report around and say "look, we investigated, everything was kosher."

No. Not good enough.

There needs to be a complete examination of how Shindico got preferred treatment and how city council was kept in the dark.

But who will conduct the inquiry?

At first glance, the obvious choice is the city's Standing Committee on Protection. But look at the members. Thomas Steen, so low-key as to be invisible and speaking broken English; Harvey Smith, crippled by his age and health problems; Ross Eadie, saddled with his own ethics questions arising from the 2010 election campaign and his involvement in O'Learygate. 

That leaves chairwoman Paula Havixbeck, who can be challenged because she received a campaign contribution from Sandy Shindleman.

A better choice would be Gord Steeves, the former chairman of Protection Committee
, who resigned to run (unsuccessfully) in the 2010 provincial election.

As an 11-year veteran of city council, he knows the rules and the players. He was there when council ordered Reid Douglas to bring the winner of the firehall contract to them for approval. He's out of council now, so he doesn't have a stake in the outcome of any investigation.

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Wednesday, September 05, 2012

Wuskwatim costs are driving Manitoba Hydro to the poorhouse

The brand-new Wuskwatim power station is pushing Manitoba Hydro into insolvency.

It's no wonder that Hydro went running to the Pubic Utilities Board for a rate increase less than six months after the first of Wuskwatim's 3 generators went on line in February.

And Hydro has warned the PUB that if it goes into the abyss, the Province may follow.

All this is found within the convoluted language of the reasons, posted on the PUB website, for a 2.5 percent rate increase that was granted in August to start Sept. 1. This increase is hard on the heels of a two percent increase announced in the spring.

Wuskwatim is the first of three megaprojects being developed by Hydro between now and 2020 to be followed by a glorious period, named Soviet-style, the Decade of Returns. The plan was to build power stations before they were needed for Manitoba users, sell the power to American customers, rake in big bucks from premium prices for "clean" electric energy, and use the export profits to pay the construction costs while keeping Manitoba rates low.

Instead, the cost of building Wuskwatim was double what was estimated and the power is selling for less than half of what was expected. In fact, it costs so much more to produce the power from Wuskwatim than we're selling it for, that Manitobans have to pay higher rates to subsidize the price.

The PUB estimated last year the addition of the new Wuskwatim generating station would add $150 million a year to Manitoba Hydro's annual costs in interest and carrying charges on its $1.6 billion cost.

"The need is urgent to avoid continuing losses on operations..." Hydro argued before the utilities board.

"The Board finds that new Wuskwatim operating expenses are a material expense impacting MH’s current financial projections ... and which results in MH coming forward with the interim rate increase request at this time." the PUB concluded.

"MH reports that it has suffered a substantial net loss on electricity operations in the first quarter of 2012/13. The Board has real concerns about the deteriorating financial position of MH and the negative turn in the financial ratios that will follow based on the projections filed by MH if the requested interim increases are not granted."

Manitoba Hydro, it seems, is running to stand still.

"It does not appear that there has been a material improvement to MH’s net income position since the Board granted the 2% interim increase effective April 1, 2012." said the PUB.

"MH restated that without the September 1st increase, it will return zero net income under current projections..."

Isn't that great? We spend $1.6 billion on a new power plant and we get to pay higher rates for electricity so that the utility can maybe break even. That's New Democonomics.

In its most hair-raising observation, the PUB stated flatly:

"MH notes it is concerned about the projected decrease in its interest coverage ratio and the potential impact of the ratio deterioration on the credit rating of both the Province and MH."

Like you, our eyes glazed over.

Up to the point when we looked up the definition of "interest coverage ratio".

Holy mackeral, it means the point where Hydro won't be able to cover even its interest costs. When that happens, the credit rating of Hydro will race Greece's to the bottom, and Manitoba's credit rating may not be far behind.

Hydro tried to spin this as a revenue problem, not a spending problem. They even tried to blame it on drought -- until the PUB discovered the low water volumes in the spring had become average water volumes by late summer.

But though Hydro has the electricity to sell, it still can't make enough money to cover the costs of Wuskwatim. The Obama Recession has kneecapped the American economy and dried up demand for Manitoba power. And the expansion of cheap and plentiful shale gas has undercut the price so much Manitoba is almost giving away electricity just to stay in the market.

The Public Utilities Board does not have any good news for Manitoba consumers.

"... MH continues to spend significant amounts on the combined ‘pre-building’ phases of Keeyask, Conawapa and Bi-Pole III transmission line. Regarding the financing of these projects, less consumer revenue means greater debt financing than planned to fund this stage of these mega-projects, affecting MH’s debt/equity ratio."

Hydro is already spending so much money preparing to build the next two megaprojects, they'll soon be back asking for even higher rates for Manitoba customers.

Monday, September 03, 2012

The Winnipeg fire hall scandal dissected

How did a good-news story about the timely and well-executed replacement of four outdated fire stations degenerate into a sleazy tale of conspiracy and coverup involving politicians and public servants?

How did the fire department, the goodest of the good guys, get entangled in a plot to deceive Winnipeg's elected city council over who was being paid millions of dollars to build the new firehalls?

Look at the big picture, and the story doesn't look so sinister. Look closer, and here's what you see...

It starts in 2009 with the fire department, now carrying the clunky name of the Winnipeg Fire and Paramedic Service, convincing city officials that it was long past time to bring the city's firefighting infrastructure into the 21st century.

Scattered fire stations were too old, too small and too poorly positioned to answer calls quick enough in the sprawling city.

The timing wasn't great. The economy had just tanked. But the project had to be done. The City decided to explore the possibility of using a 3P approach---a public-private project.

In the spring of 2009 the city issued an RFQ --a request for qualifications -- to developers to narrow down the pool of those who were interested and able to do the job. Prospects were asked if they could design, build, finance and maintain four new fire-and-paramedic stations in Charleswood, St. James, River Heights and Sage Creek.
It was, according to Reid Douglas, the Fire Chief, and city property director Barry Thorgrimson, at this point that the idea of a 'land swap' originated.

The 'land swap' lies at the heart of the current controversy.
The fire department, through Reid Douglas, then the deputy chief, made a verbal agreement to swap three parcels of land for the one on which the new River Heights station was going to be built. Two of the three lots would be firehalls being abandoned when new ones were built, and the third was riverbank property on Mulvey Avenue. Nobody knew about the proposed land swap until last week -- or of the penalty the city will have to pay if the swap is rejected.
The declaration of the origination of the land swap is found in a story in the Winnipeg Free Press. It's important to note that it's a paraphrase, not a direct quote.

They may have said a lot more that wasn't reported. They may have been quoted out of context. But if the statement attributed to them is accurate, it's like saying that this was the moment Eve saw the snake in the Garden. And we know how that story turned out.

There's something that gives the land swap claim credence. Around the same time, in July, 2009 to be exact, city hall was in an uproar over a land swap involving developer Andrew Marquess.

In a closed door meeting of Winnipeg's property and development committee, a motion was introduced --  with no notice -- to swap nine acres of land owned by Marquess along the Fort Rouge railway yards for 25 hectares of city land in the Parker neighbourhood, described by the Free Press as a vacant triangle east of Waverly Street, hemmed in by rail lines. The value of both sections was set at a million dollars.

Marquess said he planned to build 3500 townhouses on the Parker land. Adding spice to the controversy was the possibility that the second stage of the bus rapid transit corridor would pass right by that very stretch of land.

A prominent supporter of the Marquess swap was Phil Sheegl, then deputy chief administrative officer, who said the townhouse development would eventually bring the city $7 million in property taxes.

Sheegl, now, as CAO, defends the land swap negotiated by Reid Douglas. It's going to be interesting to see if Sheegl had any role in the 2009 negotiations involving Douglas. Douglas, in 2009, learned a valuable lesson for someone in his position---land swap, good; informing the public, bad.

But, back to the story...

Douglas and Thorgrimson said that nine firms responded to the RFQ and the city accepted the qualifications of seven. (In 2010 he told Canstar News six were prequalified, but why quibble.)

In January, 2010, the fire department issued an 11-page report detailing the need for new fire stations. The report made its way through the various city committees until it got the official approval of council Feb. 8. (Note: Protection Committee accepted the report, with the recommendations of the public service to proceed, as 'information' on that date, and the matter did not have to be formally referred to council for another vote in order for the plan to go forward).

The group of prequalified developers was sent an RFP---request for proposal---which, reports the FP, included the requirement that "the successful bidder must propose sites for the relocations."

The deadline for response was April, 2010. But then it was extended to May 26. It's now obvious why.

The national economy was still struggling. In its 2009 budget, the federal government put together a stimulus package, which included $2 billion in low-cost loans to municipalities for infrastructure like housing and, wouldn't you know it, fire halls.

It was too good to pass up. The city dumped the idea of private-public partnerships building new fire stations and went Old School---a $9.7 million, 15-year loan from the federal government at giveaway interest. The expectation for the RFP had changed.

And so did the interest. Of the companies asked to bid, only one responded---Shindico Realty.
"...and thus won the bid to build the new fire halls," Thorgrimson said.

Well, that's their story and they're sticking to it.
In July, 2010, city council approved taking the CMHR loan for the new fire halls. Gord Steeves, who was chairman of the protection committee responsible for the fire department at the time, said he never heard a thing about Shindico winning the fire station contract.

The Winnipeg Free Press reported at the time:

"Construction on the first of the four new fire-paramedic stations is slated to begin this fall, when Station 27 will rise on a parcel of Sage Creek Boulevard land the city is purchasing from developer Qualico."
"The other new stations will be built on city-owned land."

July was followed by August which was followed by the 2010 civic election campaign.

Sandy Shindleman, who owns Shindico with his brother Robert, was a generous donor to council candidates.

He backed six winners (Paula Havixbeck in Charleswood-Tuxedo, Thomas Steen in Elmwood-East Kildonan, Devi Sharma in Old Kildonan, Grant Nordman in St. Charles, Justin Swandel in St. Norbert, and Gord Steeves in St. Vital) and two also-rans (Ian Rabb in Fort Rouge and Michael Kowalson in River Heights).

It was 2011 when an odd notice appeared on the website of Journal of Commerce, described as Western Canada's Construction Newspaper since 1911.
Dated Feb. 23, 2011, it announced the award of a contract for a fire station in Winnipeg in Sage Creek.

Bid Results Shindico Inc, 200-1355 Taylor Ave, Winnipeg MB R3M 3Y9, Phone: 204-474-2000, Fax: 204-284-7115 $3,000,000
Nova-Con Projects Ltd, 200-260 St Mary Ave, Winnipeg MB R3C 0M6, Phone: 204-897-2223, Fax: 204-927-1849 $3,838,694
Gateway Const & Eng Ltd, 434 Archibald St, Winnipeg MB R2J 0X5, Phone: 204-233-8550, Fax: 204-231-0711 $3,873,246

If Shindico won the contract for four fire stations by virtue of being the only respondent to the RFP, why was it competing against two other companies for the Sage Creek fire hall?

The year 2011 was the year of construction, for the CMHC loan stipulated that the fire halls had to be finished by March 31, 2012.

There was plenty of coverage in the daily and weekly newspapers and then Deputy Fire Chief Reid Douglas was often quoted. He told the press in March, 2011, that they were still looking a two or three sites for the River Heights station. At the end of the month he refused comment on locations because of "ongoing negotiations."

It will be interesting to see if the paperwork on those negotiations is released to city councillors.

Because 2011 was also the year of coverup.
And that coverup is what makes this story so sinister.

Nowhere all year was Shindico's name attached to the project, even though it appears authorities had started negotiating with the company on a land swap as far back as 2009.

The fire station replacement project was divided into four smaller projects, one for each station, so that the cost of each was under the amount that had to be approved by city council. Something smells fishy.

Contracts were kept hidden in a drawer until forced out by press requests in 2012. Why the secrecy?

Douglas deliberately ignored council's instructions to bring the name of the contract winner to them for approval before starting work. This is outright subordination.

The battle lines have been drawn. City bureaucrats, including CAO Phil Sheegl, made in perfectly clear in their joint news conference last Friday that they run the city, not the elected councillors.
-  They have the right to use loopholes to disregard instructions from council, they said.
-  They can sign secret contracts.
-  They can approve city buildings to be built on private land if they want to.
-  They can hide their verbal deals until projects are completed, then present them to council as faits accompli, complete with penalties if councillors try to back out.

We'll see, maybe as soon as this week, if council has any backbone or if councillors will roll over and be doormats for city employees.

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Sunday, September 02, 2012

Unwrapping a three-year conspiracy and coverup at Winnipeg City Hall

Let's see if we've got this straight...

*  The second-in-command in the Winnipeg Fire Department secretly negotiated a deal worth more than $15 million with the mayor's business partner to build four new fire halls, then hid the identity of who got the contract from elected members of city council.

*  In order to circumvent instructions from council -- in writing -- that the winner of the fire halls contract be approved in advance, the deputy fire chief divided the contract into four: one for each new fire station, so that each fell under his city-approved spending limit and he could keep the secret of who got the contracts from the public.

*  After the secret deal was accidentally revealed, councillors were told they had either to rubberstamp a three-lots-for-one land swap that the deputy chief negotiated with Shindico Realty for one fire hall built on Shindico-owned land, or else pay $990,000 -- a non-negotiable price set by Shindico president and pal o' the mayor, Sandy Shindleman. 

Of course, they could always take their fire station and move it somewhere else.

The reaction to this massive, three-years-long scheme of deception and cover-up has been predictable. It universally begins with "forensic audit", moves to "special prosecutor" and concludes with "you have the right to remain silent..."

Only ten days into the premiere season of Scandal City there have been so many twists and turns in the plot that nobody can blame you for being lost already. Here's a recap to remind you of the players, the pleadings and the plunder.

Thursday, August 23, 2012
CBC breaks the story that Shindico Realty's website has a city property, a disused fire hall, up for lease---even though the site has never been declared surplus. As soon as the story ran, Shindico pulled the listing.

But the story has legs because this isn't the first time Shindico jumped the gun and put a city property that it didn't own up for sale or lease. The suspicion is unescapable that Shindico is getting tipoffs from the inside on land that's on the list to be declared surplus. Given that Sandy Shindleman is a close friend of Mayor Sam Katz, you can guess where the finger is pointing.

The focus at this point is on whether the old fire station has been declared surplus, was ever surplus, or how Shindico might have thought it was surplus.

Remember the words "third-rate burglary". This will be important as the story unfolds.

Friday, August 24, 2012
Shindico president Sandy Shindleman responded to reporters via email, telling the press that the listing was a mistake by Shindico and that the company had no instructions from the city to list the property.

But Winnipeg's property director Barry Thorgrimson threw enough kindling on the fire hall story to keep it alive over the weekend. He said that when city council approved a plan in 2010 to build four new fire stations, it technically declared the fire halls being replaced as surplus.

"We have a very aggressive developer moving forward with the best intention, thinking they had the opportunity to put it up for lease," Thorgrimson told the Winnipeg Free Press.

Somebody from City Hall was going to address the matter "next week", reporters were told.

Monday, August 27, 2012
To everybody's surprise, that 'somebody' turned out to be Fire Chief Reid Douglas and not Mayor Sam Katz. Douglas dropped more than one bombshell.

Douglas said the land that Shindico had up for lease was part of a land swap he negotiated with Sandy Shindleman back when he was still the deputy chief. Shindico would trade land on Taylor Avenue, where a new fire hall was eventually built, for two fire stations that were being abandoned (one of them, 1710 Grosvenor Avenue, the aborted lease in question) and a parcel of land on Mulvey Avenue.

It was a verbal agreement, which is why there was no record of it, said Douglas. It may have been an unorthodox negotiation, he said, but the city can either approve the swap or pay Shindico for its land. "A deal's a deal."

City property director Barry Thorgrimson was as surprised as anyone. He knew nothing of any land swap, he said. His department's appraisers did, because Douglas used them, obviously without Thorgrimson's knowledge, to evaluate the lots of land before making his swap deal.

Tuesday, August 28, 2012
Mayor Sam Katz, who had been keeping an uncharacteristically low profile on the issue, entered the fray. He had no problem with the (secret) land swap, he said, and neither should anyone on council.

"Everyone knew the properties were going to be sold. That was out there in the open over two years ago. That part is black and white. There's no misunderstanding on that part."

"We have to decide on how the land is acquired, by purchase or by swap," Katz said in an interview with CBC. "In the end, as long as it's done based on fair market value, that's really what everybody should be concerned about."

Wednesday, August 29, 2012
It was a different Sam Katz who spoke on CJOB with radio host Richard Cloutier.

This Sam Katz got up early, ate his Wheaties, did his pushups and stepped out of the house primed to start throwing people under the bus.

First to get the heave-ho -- Fire Chief Reid Douglas.

"I think everybody knows, and if they don't, they should know, that, you can come up with anything, any proposal you want, which is fine, what you think the best recommendation the city'd act upon but in the end Council does approve it. That's it. That's black and white. There's no altering that in any way, shape or form."

"We do have a process and everybody follows that process. Council will make the final decision, exactly what's gonna happen. In one way, I kind of admire that there are some people out there that believe, you know, that their word is their bond and that's the way it is. It's kind of Old School. It's nice to know that's still ... is reality, but at City Hall there's a process and we all follow it."

Next to get the bum's rush, ol' pal Sandy Shindleman.

"What's your relationship with the Shindleman brothers?" asked Richard Cloutier.

"The relationship is, my relationship with them isn't much different than my relationship with you, except for one thing, okay, they do own some shares in the Winnipeg Goldeyes. End of story. So that's pretty public knowledge, you would agree."

Katz had some harsh words about the co-owners of the Goldeyes.

"The realities are, there was obviously a major blunder made by someone who prematurely put something on a website. You and I both know, you cannot sell or rent something you don't own."

And later...
"We don't need scenarios where people are making what I'm hoping is an honest mistake
and putting something on a website which was obviously not supposed to have been there. End of story.

Katz even took a shot at the bureaucrats.
"As a matter of fact, I came into play yesterday (Tuesday) when I started doing interviews with all the media because for some unknown reason the departments were not speaking on the issue."

Thursday, August 30, 2012
That departmental silence continued through Thursday. However city officials did post online, in response to repeated news media requests, some documentation on the fire halls bidding process.

Included was the request for proposal which included the declaration: "Award of the contract to the recommended bidder will be subject to final approval by council."

Friday, August 31, 2012
In an extraordinary and unprecedented news conference, seven of Winnipeg's top administrators and support staff met with reporters to present a united front on the Shindico file.

Everything was done by the book, declared chief administrative officer Phil Sheegl -- as the chief financial officer, the fire chief, the chief operations officer, the property director, the materials manager, and a city solicitor nodded like Bobble-Heads.

He had a message for city councillors who said they weren't given the relevant information about the fire halls contract -- zip it. Councillors would get all the information they said they didn't get in September ... or maybe October, said Sheegl.

As for questions about the right of administrators to sign contracts, well...."once council approves the financing for the overall project, we have the delegated authority to approve the contract."

So, let's see:
-  According to Winnipeg's top civil servants, when elected city councillors voted in favour of building new fire halls, they actually voted without saying so to change the status of the old fire halls into surplus city property and city administrators were clearly given the go-ahead to dispose of that property however they saw fit.

-  And when elected city councillors voted on an overall budget for the construction of the fire halls, they actually delegated the authority on how to spend that money to unelected city administrators who could make secret deals with land developers and keep those deals hidden from the elected councillors and the general public.

For their own good, we presume.

-  And when elected city councillors specifically instructed city administrators to inform them of who was chosen to build the fire halls, that didn't mean city administrators had to inform them of who was chosen to build the fire halls.

No, it meant city administrators had to use their wiles to figure out how to hide the fact of who was chosen to build the fire halls from the city councillors. This could be an episode of Yes, Minister -- if Yes, Minister was a foreboding drama of bureaucrats usurping the power of spineless politicians.

Apparently no one in the MSM asked Phil Sheegl "why?"

Why did the city bureaucracy conspire to hide Shindico's role in the building of four fire halls? Why was there a three-year cover-up of Sandy Shindleman's involvement in the project? Reid Douglas was actively involved in that coverup and property director Barry Thorgrimson says he knew nothing about it, so why have all the top administrators united to defend Douglas?

And, are we the only ones concerned that Winnipeg CAO Phil Sheegl has the sole authority to hire a police chief who may be called on to investigate the Shindico land scandal?

Still coming: dissecting the scandal across the years.


Every good scandal deserves a name, and this one is a whopper. The best out of Winnipeg City Hall yet.
It's about fire halls. Fire halls relate to firefighting. Firefighting involves putting water on fire.

We nominate Fire-and-Water-gate.

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