RCMP were prepared to make arrests in Winnipeg police HQ construction project: briefing note

Manitoba RCMP were preparing to make arrests for alleged financial crimes in connection with the construction of the Winnipeg Police Service's downtown headquarters, documents say — but Crown prosecutors decided against laying charges.

An RCMP investigation into the construction of the police HQ, codenamed Project Dalton, lasted five years and looked into allegations of criminal activity relating to altered documents and inflated invoices. It was launched in 2014, after construction of the headquarters finished more than $70 million over budget.

Documents obtained by CBC News through an access to information request show that investigators looked into 15 of approximately 50 contractors involved in the construction project. In May and June 2017, investigators produced a thumb drive containing over 600 gigabytes of data to the Manitoba Prosecution Service to review and make a recommendation on charges.

"The reports recommended criminal charges relating to financial crimes with an estimated value of over 33 million dollars," says an RCMP briefing note.

Initially, Crown attorneys recommended investigators conduct "non-custodial" interviews with people named in the report who the police report had recommended for charges, the note says. 

In December 2017, Crown attorneys gave a preliminary response to the RCMP, saying charges were not recommended — but said that position could be reviewed if more evidence came to light through interviews, the note says.

In April 2018, Crown attorneys gave another preliminary response concerning charge approval for "planning purposes only." Final approval to lay charges was going through the internal approval process, the note says. 

Project Dalton concluded in December 2019 — but no charges were laid.

"There had to have been something to allow the investigators to obtain search warrants, judicial authorizations — which implies there's some evidence that they've gathered of wrongdoing," Kenneth Molloy, a former Winnipeg Police Service fraud investigator, told CBC News after reading a copy of the briefing note.

But the threshold to obtain a search warrant differs from the threshold a Crown prosecutor must meet to lay a charge or present a case at trial, he said.

"All of that combined would lead me to say that, definitely, there's something there. But it doesn't meet the threshold, or the standard, that we feel confident to be able to take it into a criminal courtroom."

Molloy couldn't speak to how often this sort of situation occurs in police investigations, but it does happen, depending on what information is gathered, he said.

Province stands by prosecution service

John Sliter, the former head of the RCMP white-collar crimes unit, also read a copy of the briefing note. He suspects some information gathered in 2018 or 2019 must have affected the investigation drastically, because it appears charges were imminent until that point.

The briefing note says investigators and the Crown attorneys were preparing evidence disclosures for defence attorneys, Sliter points out, suggesting they thought charges were imminent.

RCMP had also sought the services of the Forensic Accounting Management Group to corroborate the findings of the investigation. The final report issued by FAMG confirmed the findings of the investigation, the briefing note says.

Sliter says that also suggests charges were coming.

"They were fully prepared for charges. Everyone was ready, right up to the midnight hour, and then, for some reason, the Crown declined to lay charges," he said.

"That's what made me sad — to see another case in Canada where the RCMP invested significant resources only to be met with a 'no charge.' In other words, that is a failure."

To Sliter, this suggests the Crown prosecutor became risk-averse and couldn't guarantee a "slam dunk" conviction, or information came to light about a misstep in the investigation. There are, however, "unlimited possibilities" of what could've gone wrong, he noted.

Crown prosecutors have to ensure they have enough evidence for conviction, and that they can explain their case in a simple way without wasting the court's time. In complex cases such as this, that becomes harder to do, which may have been a factor too, said Molloy.

Manitoba RCMP declined to give further information or comment on the investigation.

In a written statement to CBC News, Manitoba Justice Minister Cameron Friesen stood by the decision of the Manitoba Prosecution Service.

"Our government has confidence in the process that was undertaken by the MPS," said Friesen.

"MPS engaged in a significant process in respect of the issues surrounding the new police headquarters.… That process concluded with the determination that a threshold was not met to proceed to charges."

That process "included requests to clarify aspects of the material provided as well as requests for follow up investigation, while ensuring appropriate legal obligations were followed throughout the review," a Justice spokesperson wrote in the same statement.

Mayor renews call for public inquiry

The City of Winnipeg is now pursuing a civil lawsuit against over two dozen companies and individuals involved in the police HQ project, including contractor Caspian Construction and former city chief administrative officer Phil Sheegl.

The city accuses the defendants of a scheme of fraud, embezzlement and kickbacks that inflated the cost of overall construction.

None of the allegations have been proven in court.

Going to civil court was the best move, says Molloy, because there the burden of proof for fraud in civil court is lower than in criminal court.

Winnipeg Mayor Brian Bowman told reporters Thursday that he's been working to repair trust with citizens,through greater government transparency and improved oversight.

He said the RCMP briefing note raises new questions, and he renewed his call for the Manitoba government to conduct a public inquiry into the police HQ construction. The province has previously rejected that request.

"I think a lot of Winnipeggers are scratching their heads, wondering why our provincial government would not call a public inquiry," Bowman said Thursday.

"Winnipeg taxpayers deserve answers," he said, adding that he would consider supporting the costs of a public inquiry.

Asked if the Manitoba government would reconsider its decision against a public inquiry, a Justice Ministry spokesperson repeated that the government has confidence in the prosecution service's process.

Manitoba Liberal Leader Dougald Lamont echoed Bowman's call for a public inquiry during a scrum Thursday.

"It's outrageous that this isn't the subject of a public inquiry," said Lamont.

"It's long overdue because it was a colossal squandering of public dollars. And the fact that no one's faced any consequences of it sums up everything that's wrong with politics in Manitoba and in Winnipeg."

NDP justice critic Nahanni Fontaine called the information in the documents concerning.

"This was a long and complicated investigation involving very serious allegations. The province must be 100 per cent certain that charges should not be pursued," Fontaine said in a statement. 

"The minister of justice could have, and still can, review this case and seek out a second opinion from experts to ensure the best application of the law is taken."