City's legal department says it needs another $1.2M to fight legal case over Winnipeg police HQ project - Action News
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Manitoba

City's legal department says it needs another $1.2M to fight legal case over Winnipeg police HQ project

The bill for the legal fight against former city of Winnipeg CAO Phil Sheegl and others is rising quickly, with a request for nearly $1.2 million in extra funds heading to city council's executive policy committee.
The City of Winnipeg's director of legal services says not approving a request for additional funding would 'effectively end' the city's efforts to see 'recovery and accountability' in connection with the downtown Winnipeg police headquarter project. (Tyson Koschik/CBC)

The City of Winnipeg's pursuit oflawsuits againstits former chief administrative officerandcontractors who workedon the police headquarters building isgetting more expensive.

The city's legal service department is asking members of city council'sexecutive policy committeeto approve an extra$1.2millionfor fees for external legal counsel and forensic accounting services.

If the recommendation which will be considered by the committee at itsmeeting next Tuesday is approved, the total bill for fees in fighting the case will exceed $4 million.

The city launched legal action in January 2020 against former CAO Phil Sheegl, Caspian Construction the primary contractor on the downtown Winnipeg police headquarters and a number other companies and consultants, alleging ascheme offraud, embezzlement and kickbacks in connection with theproject.

The total project cost to renovate the former Canada Post building wasset in 2009 at$135 million but ended up being closer to $214 million by the time the Winnipeg Police Service took overin the summer of2016.

In its request to EPC, the legal department says it needs the extra funds to "enable the legal services department to continue to engage the legal and expert forensic resources required for the conduct of the court actions."

The city has engaged law firmMarr Finlayson Pollock LLPand accountancy firmDeloitte LLPto do the work.

The legal department says it has "identified a significant number of transactions and matters that appear to be consistent with the allegations of fraud, conversion, fraudulent and/or negligent misrepresentation, deceit, conspiracy, unjust enrichment, negligence and breach of contract made by the city in its claim."

The department allegesdocuments from an extensive RCMP investigation into the police HQ project and from the parties named in the court actions substantiate those claims.

The RCMP investigation into the police HQ construction project concluded in December 2019, after five years. No charges were laid.

Thousands of documents, correspondence and electronic data seized from Caspian Construction form part of the forensic audit being done by legal and accountant firms hired by the city. (Brett Purdy/CBC)

None of the allegations against any of the defendants in the city's legal action have been proven in court.

The city's legal and accounting teams say they sifted through1.8 million documents in theirpreliminary work on the case.

After winning a motion to obtain the documents and electronic data seized by RCMP from Caspian's corporate offices in December 2016, the city says it received a 10-terabyte hard drive from the RCMP containing a copy ofthousands of documents.

The request for more funds would allow a forensic analysis through that mountain of data, the legaldepartment says.

"The analysis of the RCMP data is critical to the prosecution of the city's claim," wroteDougBrown, the city's director of legal services.

Brown concluded the request for funds to EPC with a caution that not getting the money could put the city's case in jeopardy.

"A decision not to provide the resources necessary to continue the court actions is not recommended as it would render useless the progress made to date," he wrote.

That, he said, would "effectively end the opportunity for the city to seek recovery and accountability as to what occurred during the WPS headquarters project."

The City of Winnipeg's legal department says it needs another $1.2M to fight case

3 years ago
Duration 1:58
The City of Winnipeg's pursuit of lawsuits against its former chief administrative officer and contractors who worked on the police headquarters building is getting more expensive. The city's legal service department is asking members of city council's executive policy committee to approve an extra $1.2 million for fees for external legal counsel and forensic accounting services.