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The Firehalls Scandal: It ain't the crime, it's the cover-up that gets you.



A majority of Winnipeg city councillors decided Wednesday that the way to recapture the public's trust was to appoint as the city's top administrator a man who deserves to be fired for his role in the gross mismanagement and blatant favoritism that characterizes the Firehalls Scandal that's consuming City Hall.
Way to go, team.

Eleven councillors voted to appoint Deepak Joshi, the current Chief Operating Officer, as acting Chief Administrative Officer (CAO) to replace his mentor, Phil Sheegl, whose disastrous term ended last week when he quit just days before he would have gotten the axe.

It's okay, they said, because Joshi will only be in charge of the city for a few months until a permanent CAO is picked.  And who wants to dwell on the past, when we can look forward to building a better city, blah blah blah.

Well, to quote Shakespeare, what's past is prologue. An audit into the disastrous project of building four new fire stations for Winnipeg found that Joshi was involved up to his neck in the lies and deception fostered by Sheegl.

One developer that never won a single tender got the job to build all four firehalls with a nod and a wink from former CAO Phil Sheegl.  Joshi was keep abreast of every major step of the process and helped keep the deals with developer Shindico secret from city council despite a clear directive from council to be informed of who got the contracts for the job.

Now he's being rewarded with the top job though he's barely less guilty of deceiving council than his predecessor.  And his role in the cover-up is just as great.

Ahh, the cover-up.  It's been all but glossed over in the reaction to the audit's findings. 

But the perpetrators deserve to be named and shamed and held accountable.  Here goes...
*  The Firehalls Scandal was almost uncovered first in July, 2012, by St. James councillor Scott Fielding.

One of the four new firehalls, Station No. 11, was being built in his ward and residents were upset at the loss of greenspace in the area.  City officials suggested a proposed shift in location of the station would "reduce the overall footprint of the station by about 600 square feet," to quote the only newspaper account in Canstar's The Metro weekly.

Fielding sat on Assiniboia community committee which had to approve the location change. The newspaper said he "noted a letter sent by the hotel (the Viscount Gort...ed) to the community about the hearing misled residents into believing the station was expanding in size and taking up more greenspace inside the cloverleaf when the opposite was true."

The Firehalls audit offers this information: " The original RFP specified a station of approximately 10,000 sq. ft. To meet the specification requested in the original RFP, Shindico’s response included a station design that was 11,564 sq. ft. The final design for Portage - Station #11 was 14,459 sq. ft."

In other words, the letter circulated by the Viscount Gort was accurate. The fire hall was significantly larger than local residents were told it would be.  Fielding was completely wrong when he accused them of misleading the public.

Wednesday, Fielding claimed he had been misled by city officials on the size of the station.  The cover-up had started.

Fielding was not interviewed by the auditors.  They spoke only to one councillor, Paula Havixbeck, the former chair of the protection committee, and only because she approached them.  Fielding never informed the auditors of being lied to by city officials and never identified who they were. He's still keeping that information to himself.

Had he pursued the information given to him by area whistleblowers, he could have stumbled onto part of the secret that Sheegl, Joshi and others were hiding from the public.

*  Instead, that distinction goes to CBC reporter Sean Kavanagh.  In August, 2012, he broke a story that developer Shindico was advertising to lease an abandoned firehall. The problem was that the land were the firehall sat had never been declared surplus by the city.

This looked like an interesting story because this was not the first time that Shindico had offered land that hadn't yet been designated surplus. It looked like the developer was getting tips from inside City Hall.  CBC didn't yet know how big the story was or would be.

But within days, it snowballed.

*  Barry Thorgrimson, the city's director of property, planning and development, revealed that the fire department had itself arranged a "land swap" with Shindico, and he had been left out of the negotiations. But, he said, "...the property was declared surplus and we are in a position to transfer titles over."

Not.

City sources quickly pointed out that the land had never officially been declared surplus. How could the director of property get it wrong?

*  A few days later, Mayor Sam Katz stepped in to explain, and further the cover-up.

It was no big deal, he said. "Everybody" knew the land Shindico was advertising was or soon would be surplus.  After all, it had been stated three years earlier in the city decision to start the process of upgrading fire stations that the cost would be partially offset by selling the land where the old stations stood. "Everybody" knew that, he said.

But "everybody", especially city councillors, sensed there was something odd and wrong about the land swap, and kept asking questions. A couple of days later, ‎Barry Thorgrimson, Director of Planning, Property and Development for the City of Winnipeg, popped up again, in the company of Fire Chief Reid Douglas.

"City Officials Insist Land Swap Above Board" read the headline in the Winnipeg Free Press.

"The two directors say the land swap originated in 2009 when the city issued a request for qualifications for companies capable of building four new fire-paramedic stations in Charleswood, Sage Creek, St. James and River Heights. Nine firms responded and seven were deemed to be qualified, Thorgrimson and Douglas said.
"The city sent those seven firms a request for proposals to build the fire halls, stipulating the successful bidder must propose sites for the relocations. There were specific geographic requirements to ensure emergency response times would be under six minutes, Douglas said."

"Of those companies, only Shindico responded and thus won the bid to build the new fire halls, Thorgrimson said."

Only that was false. Shindico didn't win a bid to build the new fire halls. Its bid was rejected along with the others. CAO Phil Sheegl personally made the decision to sole source the fire halls with Shindico.
Thorgrimson wasn't telling that story.

*  The very next day, the conspirators must have realized their version of the truth wasn't convincing anyone.
 
So they went for broke.

Phil Sheegl convened an unprecedented collection of city officials for a controlled news conference with one goal---to convince the select invited reporters that enough was enough, that "(T)here's nothing that's been done that's untoward."

Present were CAO Sheegl, Fire Chief Reid Douglas, COO Deepak Joshi, Property director Barry Thorgrimson, city solicitor Michael Jack, Materials Manager Barb D'Avignon, and Chief Financial Officer Mike Ruta. 

Here was a conglomeration of the most powerful civil servants working for the city. Would they lie to you?

"I think we followed all the procedures and policies we have," said Sheegl, and they nodded their heads.

"...they all stood beside Sheegl when he sounded the all-clear and said nothing to reporters from the Free Press and CBC Manitoba," wrote Free Press reporter Barley Kives, who was one of two journalists invited, in an angry column Tuesday. "All, in effect if not intent, lied to the public."

Perhaps the most egregious silence was from Barb D'Avignon, who had probably the lowest profile of all the faces around the table. Former Fire Chief Douglas told the auditors that the reason city council was never informed of who got the $15 million contract to build four new firehalls was because she advised him that it was "normal practice and acceptable" to split the project into four separate jobs to keep the budget of each under $10 million, the threshhold at which council had to be notified. This is why nobody knew Sheegl had given the job to Shindico.

It quickly became apparent the full court press had not worked. It was time for a new tack.

*  Four days later, a conciliatory Mayor announced he intended to clear the air over the firehalls land swap controversy. He was, he said, appointing CFO Mike Ruta to review the firehalls project and to determine if the city got value for its money. Assisting him would be CAO Phil Sheegl.

Somebody is stealing chickens from the hen house. I've appointed Mr. Weasel and Mr. Fox to investigate and get to the bottom of it.

Katz said he was against examining the processes that led to the land swap; he wanted a financial assessment first.

The Sheegl-Ruta report was ready by Sept. 21, waiting only for the signature of city auditor Brian Whiteside before it could be presented to the Mayor.

But Whiteside refused to sign on. There were still too many unanswered questions. Katz, who was in New York on city business, had to rush back. His carefully orchestrated whitewash report had been derailed.

*  A few days later, the Mayor had changed his mind again. He was now ordering the city auditor to launch an audit of the firehalls program, exactly what he had refused to do a few weeks earlier.
Katz may have known how that would turn out. The cover-up entered a vicious phase, where the best defence would be an offence. No more Mr.Nice Guy. He would lash out at anybody who challenged him, and he soon got his chance.

*  Rookie councillor Paula Havixbeck had become chair of the Protection Committee and had a seat at the table of Executive Policy Committee.  She was getting frustrated at the lack of answers she was getting regarding the escalating costs of the last of the four firehalls to be built. She did the unthinkable. She ordered Phil Sheegl and Deepak Joshi to appear before her committee.

Ordered. Nobody orders  Sheegl to do anything. And here was this rookie councillor ordering him to show up and answer her questions.

He showed up but he didn't answer much. Neither did his sidekick, Joshi. He did afterward declare to reporters, though, "For me as the CAO and the head of the administration, I have the support of Deepak Joshi and the CFO, my directors and my chiefs, who I believe have 110 per cent confidence in my leadership, as do I have 110 per cent confidence in their abilities."
* Sheegl's best friend, Mayor Sam Katz, was livid. How dare she not show the proper deference to Phil Sheegl.  Who did she think she was? He struck back immediately. Only 3 days later he removed Havixbeck from her post as head of the Protection Committee.

And two months later -- he kicked her off EPC.
It wasn't retaliation, he insisted.

It was the last gasp of the cover-up.  
 
Sure, Sheegl fired the fire chief after he got a preview of the audit and what the fire chief said about him. But his power to do much more was gone. 
 
He strong-armed a severance package and jumped out the window before he could be pushed, leaving Sam Katz to handle what was left of the cover-up. 

Joshi, and his 110 per cent confidence in Sheegl's leadership, is Katz's best shot.

He couldn`t even stop the vote to get outside legal advice into whether the audit uncovered criminal or unethical activity that should be brought to the attention of authorities.  Does aiding and abetting a cover-up fall under that direction?

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