Financial documents that allegedly show an $85,000 “bribe” paid by real estate developer Shindico to disgraced city administrator Phil Sheegl in 2009 will remain out of the public eye, for now.
In a civil trial that began this week, lawyers for John Pearson, a former business partner of developers Robert and Sandy Shindleman, tried on Thursday to introduce financial statements as evidence that, it was alleged, would confirm a “bribe” was paid to Sheegl, when he was chief administrative officer of the City of Winnipeg.
Pearson, president of ICI Properties, is suing the Shindlemans for $5.1 million, money he says he is owed from the dissolution of a two-decade partnership that resulted in the creation of many of Winnipeg’s largest retail centres.
In testimony on Wednesday, Pearson said one of the reasons he wanted to end his business relationship with the Shindlemans was mounting concern about news reports that alleged “political corruption” between Shindico, then-Winnipeg mayor Sam Katz and Sheegl.
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John Pearson, who is suing the Shindlemans, outside of the law courts on Wednesday.
Pearson said he was concerned the growing allegations about improper business dealings involving Shindico and the city during Katz’s term in office would harm ICI Properties’ reputation.
Pearson told court his concerns were substantiated in preparation for the civil trial, when he obtained financial statements that showed a 2009 loan from Shindico to Financial Support Services, a Sheegl-owned company. Pearson also said that as of 2023, the loan had not been repaid, which suggested it was a “bribe” instead.
This allegation has not been proven in court and both Sheegl and the Shindlemans have declined to comment.
Provincial court Judge Sadie Bond determined the financial statements were not germane to the primary issues raised in the civil proceeding. After arguments made by lawyers for Shindico, Bond denied a request by the defence to enter the statements as evidence.
Even with that decision, there is good reason to believe the alleged bribe to Sheegl will be raised at some point in future proceedings, particularly when Shindico principals are called to testify.
The allegation of a bribe comes at a delicate time for Sheegl and Katz, who are awaiting a final decision by the NDP government to hold an inquiry into the contracts that were awarded to build the Winnipeg Police Service headquarters downtown.
The headquarters project has been the subject of a criminal investigation, which did not result in charges, and a high-profile civil case in which it was determined that Sheegl accepted a $327,ooo bribe by Caspian Construction, the project’s general contractor.
The project — which involved the purchase and retrofit of the former Canada Post building on Graham Avenue — was plagued by delays and cost overruns. Originally estimated at $137 million, the project cost $214 million and was immediately the subject of speculation about fraudulent billing.
Last year, Premier Wab Kinew said his government would hold an inquiry to get to the bottom of both the police headquarters scandal and the decision not to lay criminal charges.
To date, there has been little progress.
“We are laying the groundwork for an inquiry into the Winnipeg Police Service headquarters scandal, and have set aside $500,000 in this year’s budget,” a government spokeswoman said in an email.
“Manitobans should be able to trust that governments at all levels are using taxpayers funds in the public interest. We are currently working on appointing a commissioner to lead this inquiry in addition to setting a terms of reference.”
MIKAELA MACKENZIE / FREE PRESS
Robert (front) and Sandy Shindleman of Shindico Realty Inc. leave the law courts Wednesday.
However, even before scrutiny of the police headquarters project, Sheegl, Katz and the Shindlemans had been the subject of numerous allegations of patronage and corruption.
Pearson told court the $85,000 loan from Shindico to Sheegl took place in 2009, a critical year in Sheegl’s history at Winnipeg city hall and his involvement in contracts awarded to Shindico.
Katz hired Sheegl in 2008 — less than a year before the Shindico loan — to serve as the city’s director of planning and property, and the same year as the controversial deal between the city and Shindico on the Winnipeg Square Parkade.
The city-owned parkade generated more than $1.8 million annually for the city. When it was first listed, Shindico obtained a sole-source contract as the listing agent, but halfway through a deal to sell the property, Shindico began representing the buyer. Despite that, the city still paid Shindico a $400,000 broker fee.
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Former City of Winnipeg Chief Administrative Officer Phil Sheegl.
In 2011, Sheegl was promoted to the position of CAO. It was the same year the city agreed to sell the former Winnipeg Stadium site to Shindico for $30 million, a deal that was revealed later by an audit to have been compromised. Specifically, the audit found Shindico received more information than other bidders that were trying to buy the site.
In 2012, without a bidding process, Shindico was awarded four separate contracts worth $15 million to build four stations for the Winnipeg Fire and Paramedic Service.
An audit later determined the contracts — which ended up costing the city $3 million more than anticipated — were awarded through a compromised bidding process in which Shindico was given inside information that wasn’t available to other contractors. It was also learned that a fire hall on Taylor Avenue was built on Shindico-owned land, even though the city owned land nearby.
The civil proceeding continues.
Sheegl resigned in October 2013, days before the release of the audit into the fire hall project.
Katz didn’t seek re-election in 2014, after 10 years as mayor.
dan.lett@winnipegfreepress.com
Dan Lett
Columnist
Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986. Read more about Dan.
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