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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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