Ottawa renewed third-party manager’s contract after it issued 15 bad cheques: court docs

An Algonquin First Nation has launched a $30 million court action alleging the third-party managers appointed by Aboriginal Affairs to handle its books treated the community with “disdain,” kept the band in the dark about its finances and even issued bad cheques.

Story updated with quote from Aboriginal Affairs Bernard Valcourt’s office

APTN National News
An Algonquin First Nation has launched a $30 million court action alleging the third-party managers appointed by Aboriginal Affairs to handle its books treated the community with “disdain,” kept the band in the dark about its finances and even issued bad cheques.

The Algonquins of Barriere Lake are also seeking to terminate the current third-party manager contract with Aboriginal Affairs.

Barriere Lake, which sits about 300 kilometres north of Ottawa, filed the court action with the Ontario Superior Court of Justice in Toronto on Friday. The court action names Ottawa along with firms Atmacinta Hartel Financial Management Corporation and BDO Canada.

Hartel is the current third-party manager for Barriere Lake. Hartel is also third-party manager for Health Canada’s funding to the band. BDO was third party-manager from March 1, 2010, to Mach 31, 2013.

Aboriginal Affairs Minister Bernard Valcourt’s office said the department was “in communication” with Barriere Lake last November discussing how the band could emerge from third-party management.

Valcourt’s office said First Nations are only put into third-party management “as a last resort.” The minister’s office said it could provide no further comment because the matter was before the courts.

Barriere Lake alleges that the third-party managers set the community up to fail and kept the band in the dark about its own finances.

“At no time has either BDO or Hartel attempted to involve Barriere Lake or its community members in the financial management of the First Nation,” states Barriere Lake’s statement of claim.

The claim also alleges that the federal government refused to direct the third-party managers, which it contracts, to work with the band.

Barriere Lake singles out Hartel and claims the firm “actively damaged the financial stability” of the community. The claim also alleges that Hartel issued 15 bad cheques in 2013.

Despite the bad cheques, Aboriginal Affairs renewed Hartel’s contract, the statement of claim said.

“These bounced cheques have and continue to have a negative effect on Barriere Lake’s relationships with the suppliers,” stated the claim. “With some suppliers simply refusing to provide services to Barriere Lake.”

The claim said Barriere Lake banned Hartel from the community.

Aboriginal Affairs Minister Bernard Valcourt and department officials, including senior negotiator Walter Walling, have been aware of the actions of the third-party managers, but did nothing to intervene, the claim alleges.

“Walling and others within (the department) have made many excuses for both BDO and Harte’s conduct, behaviour and mismanagement,” said the statement of claim.

Third-party managers have collected $6 million worth of fees from Ottawa for managing Barriere Lake since 2006, according to the statement of claim.

Aboriginal Affairs appoints third-party managers as a last resort if officials believe a band has lost control of its finances and falls into deficit under its comprehensive funding agreement.

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 Statement of Claim

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