Prosecutors taking another look
Review of new evidence from police HQ inquiry could lead to criminal charges
Severe mismanagement of the Winnipeg Police Service Headquarters project led to cost overruns and costly design changes, an inquiry has ruled. (Ruth Bonneville / Free Press)
PROSECUTORS are reviewing new evidence from the public inquiry into Winnipeg’s police headquarters project to determine whether criminal charges could be pursued.
The Manitoba Prosecution Service said Monday the review, launched in July, is examining whether evidence presented during the inquiry could change previous decisions not to lay charges in the scandal-plagued project.
The $2.1-million public inquiry took place over 27 1/2 hearing dates between February and May, and commissioner Garth Smorang released his final report Monday.
The prosecution service has twice previously explored criminal charges stemming from the project.
Mayor Scott Gillingham said at a news conference Monday he welcomed the additional review and any findings that may emerge.
Mayoral candidate Kevin Klein said he was happy to see prosecutors take another stab at pursuing charges.
Former mayor Sam Katz (left) and former chief administrative officer Phil Sheegl both denied wrongdoing, but Manitoba’s top judge ruled a payment to Sheegl, shared with Katz, constituted a bribe. (Ruth Bonneville / Free Press Files)
“The Manitoba Prosecution Service is taking the right step by reinvestigating this case,” Klein said at a news conference.
“I think any individual that has broken the law should be held accountable and should have their day in court. I think that’s important to all taxpayers in Winnipeg. Absolutely.”
Klein had previously voted against paying for legal services to pursue a lawsuit when he was a city councillor.
He said Monday he did so because he was not provided with any information, including what law firms would be retained, what they would do and what the money would be used for.
“And I think we’ve learned today that the commissioner has said, the city does a terrible job at informing councillors and informing the public of what’s actually happening,” he said. “So I didn’t vote against the fact that we should be pursuing these individuals. I voted against the fact that there was lack of information for that money.”
The conversion of the former Canada Post office building and warehouse on Smith Street into police headquarters was beset by allegations of fraud, bribery and mismanagement. The project was completed in 2016, two years behind schedule and nearly $80 million over its original $135-million budget.
Former mayor Sam Katz (left) and former chief administrative officer Phil Sheegl both denied wrongdoing, but Manitoba’s top judge ruled a payment to Sheegl, shared with Katz, constituted a bribe. (Ruth Bonneville / Free Press Files)
An external audit found the project was severely mismanaged. A lengthy RCMP investigation into allegations of fraud and forgery resulted in no criminal charges.
In 2022, former city chief administrative officer Phil Sheegl was found civilly liable for accepting a $327,000 bribe from Armik Babakhanians, owner of Caspian Construction, which was awarded the headquarters contract. Sheegl was ordered to repay more than $1 million to the city.
The city also pursued civil litigation against Caspian and other defendants over alleged fraud and construction deficiencies, ultimately recovering a $28-million settlement earlier this year.
Despite the civil court findings, prosecutors concluded in 2019 that criminal charges could not be proven beyond a reasonable doubt. A second review by a retired prosecutor reached the same conclusion in February 2025.
The prosecution service said additional evidence emerged during the inquiry, prompting the latest review.
However, it cautioned that public inquiries operate under different rules than criminal trials, which require a higher standard of proof and stricter rules governing admissible evidence.
The commissioner’s office said Monday that individual testimony can’t be used against a person in future legal proceedings, but other evidence and documents from the inquiry could be.
Winnipeg Mayor Scott Gillingham (left, with chief administrative officer Joseph Dunford): pleased the prosecution service is reviewing. (John Woods / Free Press)
The review is ongoing. The prosecutions branch has promised to publicly explain its findings once complete.
— With files from Matthew Frank