Former mayor Katz's upcoming appearance raises expectations for public inquiry into Winnipeg police HQ

Former Winnipeg mayor Sam Katz is scheduled to testify under oath this coming week as the first hearings are held in the public inquiry into the procurement and construction of Winnipeg's police headquarters.

Katz, who served as Winnipeg's mayor from 2006 to 2014, is slated to serve as a witness on Thursday and may speak on Friday as well, said Heather Leonoff, the legal counsel for the provincial public inquiry.

The presence of Winnipeg's well-known former mayor "guarantees high public interest" in the first public hearings of the provincial public inquiry, said Paul Thomas, professor emeritus of political science at the University of Manitoba.

Thomas also believes Katz's appearance "probably leads to exaggerated expectations about what will be revealed" during public hearings about a troubled project that has already been the subject of two external audits, a five-year RCMP investigation and a pair of civil lawsuits initiated by the city.

The saga dates back to February 2008, when the Winnipeg Police Service first started looking into moving its headquarters from the then-crumbling, now-demolished Public Safety Building on Princess Street to a former Canada Post office tower and warehouse complex on Graham Avenue.

City council first approved the purchase-and-renovation project in 2009, at a budget of $135 million. By the time the police service moved into the building in 2016, construction delays, change orders and flood damage had increased the project cost to $214 million.

A project audit conducted in 2014 concluded it was not managed properly. A real estate audit completed the same year found the city did not look at moving into any other property.

And an RCMP fraud and forgery investigation that began in December 2014 with a raid on the offices of Caspian Construction, the police headquarters project contractor, later morphed into allegations about secret commissions.

While that investigation wrapped up in 2019 without any charges, mountains of documents unearthed by the Mounties led the city to sue former chief administrative officer Phil Sheegl and Caspian principal Armik Babakhanians.

The lawsuit against Sheegl concluded in 2022, when Glenn Joyal, the chief justice of Manitoba's Court of King's Bench, found the former CAO accepted a $327,200 bribe from Babakhanians in exchange for showing favour to Caspian in the police headquarters tendering process.

Sheegl has since paid the city $1.15 million in damages, while Babakhanians settled with the city and has paid $500,000 toward a settlement payment that could total $28 million.

Although Katz was not a party to the Sheegl lawsuit and is not accused of any wrongdoing, Manitoba Court of Appeal Justice Christopher Mainella said in 2023 the former mayor can be considered a material witness.

Katz "received precisely half the money" paid to Sheegl by Babakhanians, Mainella noted.

Danny Gunn, Katz's lawyer, urged the public not to draw any conclusions about his client until the inquiry does its work.