Winnipeg's mayor renews calls for public inquiry after judge rules former city CAO accepted $327,000 bribe

Winnipeg police headquarters in Downtown Winnipeg. March 16, 2022. (Source: Josh Crabb/CTV News)

The City of Winnipeg has won a court case against its former Chief Administrative Officer Phil Sheegl, prompting Winnipeg’s mayor to renew calls for a public inquiry into the matter.

A judge ruled Sheegl took a bribe from the owner of the company building the downtown Winnipeg Police Service Headquarters.

The project went tens of millions of dollars over budget and has been the focus of both a criminal investigation and a lawsuit brought forward by the city.

“This is one of the biggest scandals in Winnipeg’s history,” Brian Bowman, Winnipeg’s mayor, said Wednesday in response to the ruling.

The Manitoba Prosecution Service announced in 2019 there wasn’t sufficient evidence to charge anyone criminally and Bowman reiterated the lawsuit was a last resort to seek accountability.

“The decision handed down yesterday by Chief Justice Joyal is a historic decision for Winnipeg taxpayers,” Bowman said.

The provincial government previously brushed aside the city’s push for a public inquiry into the matter but Bowman is now renewing those calls.

“I would say that there is a cost to inaction and the summary judgment handed down yesterday is confirmation that there are very real and valid reasons for a public inquiry to be called,” Bowman said.

The city still has an unsettled lawsuit against Caspian and various other defendants and the province’s new Premier Heather Stefanson won’t commit one way or the other while that matter’s before the courts.

“Obviously before we make any decisions on whether or not to call any public inquiry we need to make sure that all avenues are exhausted,” Stefanson said.

In a 129-page summary judgment, Manitoba Court of Queen’s Chief Justice Glenn Joyal ruled Sheegl accepted a $327,000 payment from the owner of Caspian Construction, the main contractor on the project.

“The theory of the city as it relates to the bribery and breach fiduciary duty allegations have been made out,” Joyal wrote.

“To the extent that Sheegl has responded with an explanation, I say simply that his response is not credible or congruous in the circumstances of this case.”

The city argued Sheegl was using his influence to help Caspian get the police headquarters contract.

Sheegl’s lawyer argued the money he was paid was part of a 2011 land deal in Arizona and had nothing to do with the construction project.

Joyal sided with the city.

“I have determined that the elements of the tort of bribery have been established and that the explanation provided by the Sheegl defendants as to the purported real estate transaction is incredible and in my view, fictional,” the Chief Justice ruled.

Joyal also found Sheegl breached his fiduciary duty by not disclosing the payment to the city.

“Put simply and starkly, this was a breach of trust and a breach of loyalty,” he wrote.

The city has been awarded legal costs, $250,000 in severance paid to Sheegl and punitive costs of $100,000. Joyal also ruled Sheegl can’t keep the $327,000 payment and will seek further submissions on what should happen with it.

CTV News Winnipeg has reached out to Sheegl’s lawyer and Caspian’s lawyer for comment.

The city said the lawsuit against the other defendants is still making its way through the courts and they’re unable to provide any timeframe on its conclusion.

The city also said it’s still working on finalizing its legal costs and isn’t able to provide an estimate at this time.