Winnipeg Police HQ Contractor Reveals ‘Handshake’ Arizona Land Deal at Inquiry
At the Winnipeg police headquarters inquiry, Armik Babakhanians, principal of Caspian Construction, faced intense questioning regarding a controversial Arizona land deal. This deal was previously described by a Manitoba court as a fabricated explanation for a bribe.
Background of the Inquiry
City of Winnipeg lawyer Michael Finlayson challenged Babakhanians during cross-examination. He highlighted the absence of documentation related to the investment in Tartesso, Arizona, which Babakhanians claimed was a ‘handshake deal.’ Babakhanians admitted to the lack of formal paperwork, stating, “There weren’t many documents.”
Key Testimonies and Rulings
In 2022, a judge determined that Phil Sheegl, former chief administrative officer of Winnipeg, accepted a bribe of $327,200 from Babakhanians. Sheegl served the city from 2008 to 2013 and was involved in the renovation of the former Canada Post complex into a new police headquarters. Babakhanians, along with Sheegl and former mayor Sam Katz, denied any wrongdoing, asserting that the funds were tied to the Arizona land agreement.
- Initial Budget: The police headquarters project began with a budget of $135 million.
- Cost Overruns: By the time it was completed in 2016, costs soared to $214 million due to delays and other issues.
- Legal Findings: In a 2022 ruling, Chief Justice Glenn Joyal described the Tartesso deal as a “concocted story,” leading to orders for Sheegl to repay approximately $1.1 million to the city.
Legal Developments
The Manitoba Court of Appeal upheld the earlier decision in 2023, emphasizing that whether the Tartesso deal was genuine or not was irrelevant. Both potential scenarios implicated Sheegl and his codefendants in civil bribery.
In addition to the ongoing inquiry, Babakhanians’ payments to Sheegl and Katz—$200,000 in 2011 and $127,200 in 2012 respectively—have raised further questions. The inquiry has reviewed evidence indicating that the $200,000 payment occurred just two days after Sheegl received authorization to award the police headquarters construction contract.
Future Proceedings
The inquiry launched earlier this month at the Public Utilities Board in downtown Winnipeg is expected to continue for several months. It aims to hear testimonies from over 30 witnesses, with Babakhanians expected to remain a central figure throughout the proceedings.
The case has not only led to lawsuits against the city but also involved extensive audits and an RCMP investigation, which, as of now, has not led to any criminal charges.
