Contractor denies bribery allegations at Winnipeg police HQ inquiry
Posted February 21, 2026 2:44 pm.
The second week of the public inquiry into cost overruns at the Winnipeg Police Service headquarters wrapped Friday with a firm denial from the contractor at the centre of the controversy.
Armik Babakhanians, owner of Caspian Construction Co., rejected allegations he paid a bribe to a senior city official to secure the project.
“Have you ever accepted a bribe in any one of your projects? No sir. Have you ever offered a bribe to anyone on any project you’ve been involved in? No sir, as I said, I work hard enough that I don’t need to offer anybody anything,” said Armik Babakhanians, owner, Caspian Construction Co.
The inquiry is examining how the police headquarters project ballooned to $205 million, roughly $70 million over its original $135-million budget, when it was completed in 2016.
Babakhanians said he was “disheartened and dismayed” by a judge’s ruling in a 2022 civil lawsuit that concluded a land sale to Phil Sheegl, the city’s former chief administrative officer, was used to conceal a $327,000 bribe paid as a thank you for help securing the contract.
Responding to questions from his lawyer, George Orle, Babakhanians described the emotional toll of the findings.
Earlier this week, Phil Sheegl acknowledged he was in a conflict of interest when awarding the project to Caspian while having private business dealings with Babakhanians. He also admitted to sharing confidential information about the project, something he said he should have disclosed.
Court proceedings previously heard that half of the $327,000 allegedly flowed to former Winnipeg mayor Sam Katz. Both Sheegl and Katz have denied any wrongdoing.
Asked how he feels about the building today, Babakhanians said the experience has been bittersweet.
“This project is done. It’s finished. It’s operating. How do you feel about the building you constructed? I have mixed emotions. I thought I was building a legacy, unfortunately, this whole thing has become a nightmare to say the least,” said Babakhanians.
He also described the personal impact of the controversy.
“Our life had been turned upside down. We were a family welcomed everywhere. All of a sudden, we’re being ridiculed publicly … Myself included. All kinds of names. I can take it. As we age wisdom comes in, but not the boys. That’s hard. Not my wife. Not my granddaughter. That is uncalled for,” said Babakhanians.
Babakhanians said the inquiry marks the first time he has been able to publicly share his side of the story.
The commission continues next week with additional testimony. In March, proceedings will shift into Phase 2 — titled “The Money Trail” — when key figures, including Babakhanians, are expected to return for further questioning.
