Phil Sheegl's lawyer calls claim his client was 'in on it' false, stupid and ill-informed
Mounties claim police-HQ contractor said he tried to influence former CAO, others to get $156M job
The lawyer for former Winnipeg chief administrative officer Phil Sheegl says allegations about attempts to influence the award of a major Winnipeg construction contract are false, stupid, ill-informed and defamatory.
The RCMP investigation into Winnipeg's police headquarters has unearthed emails that officers suggest show Caspian Construction owner Armik Babakhanians said he tried to curry favour with Sheegl and others to obtain the $156-million construction contract.
The information was provided to a judge in February 2016 in order to obtain bank records and represents a snapshot of a two-year-old RCMP investigation, dubbed Project Dalton. Before police are allowed to search financial records, they are required to present evidence to support their request for institutions to produce documents.
According to prior information presented to a judge in order to obtain a search warrant, the police-HQ investigation originally involved fraud and forgery allegations.
Last year, the investigation expanded into allegations the principal engineer and architect on the project, as well as Caspian's owner, conspired to offer project director Ossama AbouZeid a $600,000 secret commission.
AbouZeid said he never asked for one, was never offered one and he never received one.
"In all my working life I have never asked for monies outside my contractual entitlements," AbouZeid said in a statement.
- RCMP launch criminal probe into Winnipeg police HQ project
- RCMP investigate offer of secret commission to Winnipeg police HQ project director
In the information provided to the judge, the Mounties allege Babakhanians claims he tried to curry favour with Sheegl and influence AbouZeid in late 2010 and early 2011 to gain access to construction work Babakhanians said his firm did not have the resources to conduct.
Sheegl was Winnipeg's deputy chief administrative officer at the time. He later became CAO and left the city in 2013.
AbouZeid is a construction consultant who had worked on Investors Group Field before he was named project director for the police headquarters in the middle of 2011.
The police-HQ construction contract was awarded in two phases. The first phase involved $50,000 worth of pre-construction services. The request for proposals for this component closed on Jan. 18, 2011.
Const. Haskins states in his sworn affidavit that "Armik further said Phil Sheegl (Sheegl) is in on it and and if he could get AbouZeid's help with the proposal it would be appreciated. AbouZeid responded 'Nice! Of course I will do what I can ...'"
Lawyer: Stupid to say Sheegl was 'in on it'
Robert Tapper, legal counsel for Sheegl, described the statements as Babakhanians "running off at the mouth" about his client.
"As little as he [Sheegl] had to do with this transaction, he was never pressured by anyone to do anything and that had somebody come to him and said 'I want you to do this for me as a favour,' the answer would have been, 'You will not be doing this deal, period,'" Tapper said in a telephone interview.
"He would never have abdicated his duty or been irresponsible to his duty."
Tapper further said, "The suggestion he was, quote, 'in on it' is false, it's stupid, it's ill-informed and, I say this advisedly, defamatory."
Claims of influence
The information provided by RCMP in a sworn affidavit includes sections of emails where Caspian's Babakhanians asked consultant AbouZeid for help in securing the police-headquarters construction job.
"I asked you one thing though if you can help me prequalify and get Police station that will make my day," the construction-company owner emailed future police-HQ project director Ossama AbouZeid on Dec. 20, 2010, according to the information provided by the RCMP to the judge.
Construction consultant AbouZeid rejects the claims attributed to Babakhanians in the emails unearthed by the RCMP.
"Any help I provided Caspian in early 2011 regarding this contract never exceeded providing professional references of their strength based on my previous experience," AbouZeid said in a statement to CBC.
In his sworn affidavit provided to the judge, Const. Haskins said he believes Babakhanians claimed to attempt to use a connection between Sheegl and Danny Akman, a property manager and former director of Akman Construction.
Akman Construction briefly partnered with Caspian Construction on the police-HQ job.
On Feb. 10, 2011, the city awarded the $50,000 pre-construction contract to a joint venture between Caspian Projects Inc. and Akman Construction Ltd. The city called the joint venture CAJV.
In the information provided to the judge, Const. Haskins states in his sworn affidavit that he believes Babakhanians and AbouZeid spoke after the contract closed about Sheegl's connection to Danny Akman.
Danny Akman is an official with Akman Management, a property-management company that is separate from Akman Construction. Danny Akman was an Akman Construction company director from October 2007 to September 2011, corporate records state.
Const. Haskins said in his sworn affidavit that AbouZeid wrote Babakhanians on Jan. 27, 2011, and stated, "You know him and Danny Akman are best buddies. The same for me and Danny …"
"In the contexts of this e-mail, I believe that 'him' referred to Sheegl. I believe that Armik [Babakhanians] wanted to use Danny Akman's association with Sheegl to gain consideration for the Phase 1 construction contract," Const. Haskins stated in the affidavit provided to the judge.
"Danny Akman was the representative on behalf of Akman's. He was involved in discussions of setting up the joint venture with [Caspian] for the main construction contract proposal."
Const. Haskins further stated that Babakhanians wrote to his son Shaun via email on Feb. 6, 2011, "and reminded him that Danny Akman and Sheegl are best buddies. Armik [Babakhanians] also commented that they need them (Akman) as they do not have adequate staffing to do this project without them."
Lawyer says Mounties are confused
Tapper, representing Danny Akman, said the RCMP are mistaken.
"Danny has never been involved in construction, he was not involved in the negotiation of the joint venture or any aspect of it whatsoever," Tapper said.
"Statements about him attributing involvements with the joint venture or Armik Babakhanians are absolutely inaccurate."
Tapper also said Sheegl has never spoken about the police-HQ construction contract with Danny Akman or his brother Richard Akman, who is president of Akman Construction.
"Danny, as he knows, has nothing to do with construction," Tapper said.
The RCMP say their investigation into the police headquarters is ongoing.
"The information contained within the production orders obtained by CBC is a snapshot of the Project Dalton investigation up to February 2016," RCMP 'D' Division communications director Robert Cyrenne said in a statement.
"As in any investigation, extensive follow-up work has been done by investigators since that date."
Joint venture splits
On June 14, 2011, the joint venture between Caspian Projects and Akman Construction asked the city to award the contract to Caspian alone, according to a 2014 KPMG audit of the Winnipeg police headquarters construction project.
The city approved this request and formally assigned the contract to Caspian, according to the KPMG audit and the RCMP information provided to the judge.
Const. Haskins also stated that the departure of Akman Construction caused concern for former City of Winnipeg project manager Abdul Aziz, according to the affidavit.
Aziz told police in a statement "that the loss of one of the joint venture partners could affect the resources and capabilities available to complete the complex reconstruction project," Const. Haskins said.
Audit raised concerns about contract award
In July 2011, city council delegated authority to Phil Sheegl, who had been promoted to CAO, to award the full police headquarters construction contract.
Four months later, Caspian was awarded a $137.1-million contract for construction and post-construction services, according to the KPMG audit, published in 2014. The initial price was determined through talks between Babakhanians and city officials, including AbouZeid.
The contract was later increased to $156.4 million.
"We observe that the winning proponent of [the request for proposals for police-HQ construction services] was CAJV — we note that Caspian did not submit a proposal, and that Caspian was awarded the construction contract," according to the KPMG audit.
Caspian's claim of influence
In the information RCMP provided to the judge, Const. Haskins stated Caspian owner Babakhanians wrote his son an email on Jan. 22 to express his views on the project.
"Remember who designed the Jv [joint venture] with Akman to prequalify, Then break it up for good of ur company."
The RCMP constable further stated "I believe that he explained to Shaun how he used the CAJV (Danny Akman's relationship with Sheegl to gain favour) for the main construction contract then break it apart for sole [Caspian] control."
In his statement to CBC News, AbouZeid said he is angered by the RCMP allegations, which he described as outrageous, slanderous and damaging to his reputation and integrity.
"Furthermore, my own project management contract took additional 5 months beyond its nominal starting date (from June till Nov 2011) to settle the scope, the compensation and the source of the funds."
No allegations have been proven in court. The RCMP have laid no charges in the police-headquarters investigation.
Babakhanians did not respond to requests for comment.