Former Winnipeg CAO must pay $327K received as bribe to city as damages, judge rules

A judge has decided how a former head of Winnipeg's public service must repay a $327,200 bribe.

Decision made on where money Phil Sheegl received from police HQ contractor should be repaid

 A head-and-shoulders image of a man standing in city hall.
A Manitoba court ruled in favour of the city's claim against former chief administrative officer Phil Sheegl in March. In a new decision, Sheegl has been told to pay the city damages. (CBC)

A judge has decided how a former head of Winnipeg's public service must repay a $327,200 bribe.

In a decision published Wednesday, Manitoba Court of Queen's Bench Chief Justice Glenn Joyal ruled former Winnipeg chief administrative officer Phil Sheegl must pay the city $327,200 in damages.

In March, Joyal ruled the former CAO received a bribe and breached his duty as a senior city official in 2011, when Sheegl accepted $327,200 payment from Armik Babakhanians, the owner of Caspian Construction.

That payment was made days after Sheegl, acting as Winnipeg's CAO, awarded Caspian a police headquarters construction contract later set at $137 million, according to court documents.

In March, Joyal decided Sheegl must pay back $250,000 he received from the city as severance, submit $100,000 to the city in punitive costs and also cover the city's legal costs.

Joyal also ruled at that point that Sheegl had to pay back the $327,200 he received from Babakhanians, but asked lawyers for Sheegl and the city to make submissions about where that money should go.

In Wednesday's decision, Justice Joyal determined the $327,200 should be paid to the city as "damages for breach of trust, which was a constituent part of the civil bribery committed against the city."

Joyal wrote Sheegl had a contractual duty to conform to the city's code of conduct, which forbids city employees from receiving financial favours from people involved in a business relationship with the city.

The judge rejected an argument from Sheegl's legal counsel that no decision on payment could be made until Joyal rules on a separate lawsuit by the city against Babakhanians and dozens of other defendants. 

Joyal noted Sheegl's lawyers were the ones who moved to sever the former CAO's case from that of Babakhanians and the other defendants.

Joyal has yet to rule on that case.

CBC News has asked legal counsel for Sheegl and Babakhanians for comment.

In an email to members of city council on Wednesday afternoon, City of Winnipeg chief administrative officer Michael Jack expressed satisfaction with Joyal's latest decision.

"This is essentially the disposition that the city had requested and argued for, so we are very pleased with this additional successful result," Jack said.

With files from Joanne Levasseur