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Competing Interests?

Introduction

From the beginning of his first term as Winnipeg's mayor, when he declined to put his financial affairs in a blind trust, Sam Katz has been criticized for mixing private and public business.

His controversial dealings, particularly involving Shindico Realty, initially aroused little public interest. But in the past year, a series of controversies appears to have cost the mayor support, both on council and among the public.

Here is a review of the mayor's most contentious actions.

Photo Credit: John Woods/Canadian Press

Walker Theatre

What the mayor did:

In March 2005, Katz took $50,000 from partners for his stake in the Walker Theatre. Then six months later, he introduced a motion to give his former partners $220,000 in city grants. When it came to the council floor, Katz did not recuse himself and voted on the same motion.

Why this has raised eyebrows:

At the time, Katz said he was doing nothing wrong because he had cut ties with his partners in the Winnipeg Consortium six months earlier. But critics argued that any mayor who cared about maintaining an image of scrupulous incorruptibility would avoid promoting, and then voting on, a motion to give $220,000 to former business partners only six months after severing the relationship.

Photo Credit: Google Maps

The parking lot

What the mayor did:

From the time he was elected mayor until April 2008, Katz remained president of Riverside Park Management, a company that negotiated lease arrangements for city-owned land used by his baseball club, the Winnipeg Goldeyes. Between 2005 and 2008, Riverside was involved in a dispute with the city over a revised property assessment on city land Riverside had leased for a parking lot beside the ball park. Ultimately, the city administration asked council to retroactively change the lease and reduce Riverside's back rent by $233,000. At the time, Katz said he had ended his daily involvement in Riverside following his election, and he recused himself when council voted in 2008 to approve the request.

Why this has raised eyebrows:

Katz argued throughout the affair that he had done nothing improper. But his refusal to separate himself from Riverside after his election, and the lack of transparency in Riverside's dealings with the city and the baseball club, left him vulnerable to accusations of conflict of interest.

Photo Credit: Google Maps

The party

What the mayor did:

In December 2010, the mayor hosted a Christmas party for city staff -- paid for by taxpayers -- at Hu's Asian Bistro, a restaurant that he owned at the time. The tab was $2,915. Then in 2012, the Winnipeg Free Press obtained expense reports showing the mayor's office spent about $10,000 at Hu's on First, an eatery owned by his brother, between 2006 and 2009.

Why this has raised eyebrows:

Joe Chan of Cathay House, another local restaurant, has taken legal action against Katz, accusing him of violating Manitoba's Municipal Conflict of Interest Act. If Katz is found to have breached the act, a judge could order him removed as mayor.

Duddy Enterprises

What the mayor did:

Katz bought an Arizona-based company from Phil Sheegl, who is currently the City of Winnipeg's chief administrative officer. The mayor did not list the purchase in his statement of assets and interests, which has to be filed under the conflict of interest act. Katz has said he did not need to declare it because it happened outside the province. To many, it appeared he was taking advantage of a loophole in the legislation. Facing public pressure, Katz sold the company back to Sheegl.

Why this has raised eyebrows:

Critics argue that a business relationship between a city's mayor and its chief administrator creates a potential to put their private interests ahead of their public responsibilities.

The house

What the mayor did:

In August 2012, Katz paid more than $1 million for a house in Scottsdale, Arizona. The seller was Teri Nordstrom, the sister of Shindico chief financial officer Diane Shindleman and sister-in-law of company president Sandy Shindleman. Katz refused to give more details about the purchase, other than to say that he paid fair market value for the home.

Why this has raised eyebrows:

When confronted with the sale, Katz refused to offer much by the way of details. He refused to describe his relationship with Nordstrom, he would not say when he took possession of the 4,500-square-feet house, and he would not disclose the price, only saying that he had paid market value. The deal raised questions about Katz's long-held claim that he has no connection with Shindleman, beyond the developer's shares in Katz's baseball team, the Winnipeg Goldeyes.

Photo Credit: Google Maps

The land swaps

What the mayor did:

Without city council approval, Winnipeg fire Chief Reid Douglas gave Shindico Realty three pieces of city-owned land in exchange for property on Taylor Avenue to be used for a new fire hall. When CBC News reported the swap in August 2012, the new fire hall was already built on the Taylor land, which was still owned by Shindico. Katz initially defended the transaction, but under public pressure, he ordered an internal review. But it wasn't enough for city council. The following month, councillors unanimously voted to conduct an external review of all city real-estate deals dating back at least five years.

Why this has raised eyebrows:

Councillors and citizens alike wondered why the city's fire chief, rather than the property department, was negotiating land deals with Shindico Realty. Councillors said taxpayers were calling them, raising questions about Shindico's relationship with the city and the mayor. Critics also began questioning why Shindico seemed to receive an inordinate share of the city's real estate business.

Photo Credit: Google Maps