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13505A storm is brewing over Hartley Bay band money

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  • Don
    Jul 6 12:51 AM
      A storm is brewing over Hartley Bay band money

      Joey Thompson
      The Province

      Sunday, July 06, 2008

      In a Province exclusive, columnist Joey Thompson speaks with Hartley Bay band member Brian Robinson over allegations of possible financial improprieties, including breaches of trust and fiduciary duty to the 700 on- and off-reserve band members. Several administrators and former elected councillors may have double-dipped on travel expenses and received hefty pay raises and retroactive pension cheques, which they or someone in the inner circle approved


      Hartley Bay native Brian Robinson concedes the hereditary custom of the Gitga'at people is to mask internal transgressions from visitors, not showcase them in a white man's newspaper.

      But that was before mistrust of a few influential band officials had time to fester, before the village was paralyzed by suspicion that trusted native leaders had acted out of personal gain, rather than for the collective good.

      At the request of Robinson and fellow natives, an evaluation team from Indian and Northern Affairs Canada flew west two months ago to review the dissidents' claim that in-house financial irregularities were tearing apart their proud little community, that a chosen few were prospering while the majority were forced to do without.

      The solitary reserve called Hartley Bay Village -- 7,500 square kilometres of land and water nestled in the belly of a bay 630 km up the craggy coast from Vancouver -- first surfaced on the nation's radar screen in spring 2006, when the native settlement rushed to rescue stranded passengers from a sinking B.C. Ferries vessel, a selfless, tender gesture that earned them vast respect and a Governor-General's Award for exceptional service.

      Now Ottawa's attention had changed course; the INAC team returned to their federal offices with a thousand documents salvaged from the drawers, computer discs and trash cans of elected councillors, band-treaty and housing employees and officers of the Gitga'at Development Corporation and its little sister, Gitga'at Forest Products.

      The INAC team soon informed the band it was set to hire an outside forensic audit firm to comb through the band's books. Evidence of wrongdoing could trigger either civil or criminal prosecutions. The probe continues.

      Robinson, one of about 500 Hartley Bay natives who live off reserve, said it became clear that the lives of his people weren't getting any better. "What we wanted was transparency and accountability."

      But native protocol demanded he seek the counsel of his hereditary elders, among them his dad, Simoyget (Chief) Wii Diis, before discussing his village's fall from grace.

      "At first my dad and I were at each other's throats," he said frankly.

      "I told him if the elders hadn't been so quiet, we wouldn't be in this trouble. It felt like two worlds colliding."

      The chiefs recognized change was imperative if they were ever to see harmony and oneness restored to the troubled Indian village Ottawa deemed a reserve 119 years ago.

      They also accepted that the journey forward entailed unearthing the past.

      Because the elders lacked the expertise to wade through a sea of paperwork and computer files, 46-year-old Robinson, with their blessing, brought several professional consultants to the table who were skilled in financial statements and computer databases.

      Unannounced, they dug through desk drawers, copied e-mails and accessed spreadsheets. Robinson even applied under freedom-of-information legislation for reports.

      They persevered despite the many roadblocks; documents had either vanished or been destroyed after a band office break-in; computer discs had been deleted. Business folders had made their way to the homes of an influential few or their supporters.

      Clerical staff were warned to hush-up if they valued their jobs, said Robinson, whose Tsimshian name is Ukst-aamts'u Waanxl.

      "An inner circle controlled the purse strings. If you said anything, you risked being cut off welfare or refused funds for your kids' education or whatever."

      After gathering up the files and soliciting the aid of a systems data recovery company, the dissenters arrived at Vancouver law firm Ratcliff & Co. armed with stacks of materials they wanted assessed for legal implications.

      What resulted were letters of opinion outlining concerns of possible financial improprieties, including breaches of trust and fiduciary duty to the 700 on- and off-reserve members.

      The legal beagles advised the villagers that several administrators and former elected band councillors -- some of whom also held key positions in the treaty office, housing program or GDC or were married or directly related to someone who was -- may have double-dipped on travel expenses and received hefty pay raises and retroactive pension cheques, which they or someone in the inner circle approved.

      They also found evidence office employees had been directed to set up handsome "transitional" employment contracts and severance packages for the officials, who did not put these deals to council for a vote or recuse themselves when it came to a show of hands.

      The law firm found one councillor had helped himself to more than $200,000 for construction of a massive new home, well above the $40,000 per-member maximum outlined in the housing agreement between the village and Ottawa.

      "Some individuals lost sight of why they were elected," Robinson lamented during one of our many phone conversations, his calm composure and measured voice faltering as he ruefully described how the disloyalty of a few broke the spirit of the many.

      "Nepotism grew rampant and continues to this day. Greed and personal gain became their main focus, while neglecting the poor and our elders. Our village has become a group of haves and have-nots."

      For example, one band official kept taking a salary long after the job had been phased out. Two others appear to have shared a hotel room when travelling out of town but billed the band for separate rooms. The paper trail also suggests both band and the aboriginal organization hosting the out-of-town conference were billed for the same trip. Armed with signing authority, they were able to cut their own cheques.

      Lawyers also found evidence that an official had authorized overpayments of up to $89,000 in retroactive pension benefits, $47,000 in transitional work contracts and $18,000 in annual leave payouts. Council was unaware of many of these transactions.

      As for the Hartley Bay Village official with the big house, the lawyers said he violated the terms of the band's housing policy by failing to get council approval for vastly exceeding the allowable limit, for building it on two lots and for authorizing a $5,000 "bonus" to a housing official employed by the band.

      ". . . There is usually a long wait in having a house built," a Ratcliff lawyer wrote.

      "Band council minutes indicate a two-to four-year wait for band members just to get renovations. Yet [he] had a house built for himself within a few months [of his request]."

      Another high-ranking band official was suspended by the band after admitting he repeatedly double-dipped by billing both the band and the Aboriginal Financial Officers Association for as much as $30,000 in travel expenses to attend association meetings.

      "[His] conduct can be variously described as uncooperative, dishonest, a breach of trust, a breach of his fiduciary duty [and] a conflict of interest," the lawyer stated.

      Also noted was the secretive nature of the band-owned Gitga'at Forest Products operations. The few running the show kept a tight rein on the company's financial dealings.

      "Chief and council have a right to know how much money GDC has earned in dealing with the band's forestry resource, where the money went, how it was spent and whether any amounts are owing to the band."

      The same was true of Hartley Bay Fuels, which was pocketing the revenue from sales of fuel that the band had bought.

      "To see my own village go into free-fall, to have a select few help themselves to what belongs to everybody, is disheartening to me," Robinson said.

      "Thank goodness we succeeded in motivating Ottawa to do something."

      It wasn't easy.

      Ever since the Parliament of Canada proclaimed the Indian Act in 1876, subsequent federal governments have preferred to ignore the many governance problems inherent in the traditional clan structure of reserves in Canada, including B.C.'s 197 bands.

      Semiahmoo and Musqueam are two such recent examples of distressed communities.

      The same goes for the RCMP, who have had no appetite for sticking their noses into native affairs or butting heads with native militants.

      Robinson first tried to catch the attention of INAC's regional office for allegations and complaints more than 18 months ago.

      Like other native whistle-blowers, he and his group were advised to take their beefs to the band council and administrators.

      "Problem was, some of them were the problem," he said. "We tried to get answers, but they wouldn't listen."

      Only after Tory Indian Affairs Minister Chuck Strahl unveiled new auditing measures for Canada's native reserves recently did INAC agents jump into gear; Ottawa, for the first time, will track the $10 billion it transfers to reserves annually to ensure the money is invested in programs and services for bands with the appropriate management, financial and administrative controls in place.

      And that's the rub.

      The traditional clan system, the governance structure of the country's network of reserves, attaches almost unlimited power to those with the largest group of relatives and influential supporters. It's a who-you-know system of getting elected or hired that lower-status Indians find difficult to penetrate.

      Yet those entrusted with the control of their people are often ill-equipped and poorly educated for the daunting task of governing a community, much less directing a corporation or investments drawing millions of dollars annually.

      Reserve-based elementary schools, their teachers and curriculums, are not up to snuff, Robinson said. Many Hartley Bay kids enter high school with not much more than a Grade 3 reading and comprehension level.

      "Our education system is broken. As adults they are so easily manipulated, so easily swayed by those in control."

      INAC chief audit and evaluation executive Anne Scotton said it was too early to gauge the First Nation people's appetite for audits, but that volume has met all expectations.

      She said she was not at liberty to confirm reports her office has its sights on at least three more B.C. bands; Sechelt, Kitwanga near Hazelton and Gingolx on the Nass River.

      "Our canoe is in trouble," Hartley Bay elder Hebert Clifton (Simoyget Exu Zaa) told The Province.

      "We must work together to improve the lives of my people. There must be better communication, transparency and accountability."


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