A coup from within
Frosty
Secret meetings, backroom deals, underhanded politics: Millions have
been poured into Indian Brook Fisheries yet the Shubenacadie First
Nation seems none the better for it.
By MARY ELLEN MacINTYRE Truro Bureau
TELEPHONES at Indian Brook Fisheries Ltd. have been disconnected for
weeks. The doors have been locked and creditors are lining up.
In the midst of all that, and with band council elections in the offing
Nov. 4, people on the Indian Brook First Nations reserve near
Shubenacadie are wondering what to make of things.
Most people still have no idea what happened to the two companies that
some members of council set up after the last election two years ago.
"We have had no disclosure about Indian Brook Fisheries Ltd. and Indian
Brook Marine Supply," said Alex McDonald, who just completed his first
term as chief of the Shubenacadie band. "They got $5 million in
government money and they've made bills all over the place and
that's about all we know so far."
When he was sworn in as chief of this First Nations community in 2004,
Mr. McDonald could see trouble on the horizon.
Nonetheless, in his wildest imaginings, he could never have predicted
what would take place in the ensuing months.
"Right away there was a revolt - most of the councillors said they
wouldn't work with me," Mr. McDonald recalled recently. "It was
amazing and heartbreaking."
He said newly minted councillor Stephen Michael wasted no time letting
him know he didn't trust him, didn't like him and wouldn't work
with him.
"I guess I should have known what kind of ride it was going to be on
that very first day," Mr. McDonald said.
The ride was more like a free fall.
Two years hence, Mr. McDonald, Mr. Michael and seven others are now
vying for the band's top position. Close to 100 people are running
for the 12 council seats.
Earlier this year, the band's finances were in such bad shape that
the Indian Affairs Department decided a co-manager was needed.
Arbuthnot, McNeill, Douglas and Associates Ltd. and Moccasin Trail
Consulting are handling the band's finances on their own until after
the elections, when they will work with the new council.
But it's the events involving first eight, and then nine, band
councillors and their venture into the fishing industry that is
uppermost in the minds of the electorate.
How did a company known as Indian Brook Fisheries Ltd. and the
short-lived Indian Brook Marine Supply Inc. come to be? Who made money
off the deal and what part did a tripartite negotiations group and two
federal government departments - Indian Affairs and Fisheries and
Oceans - play in the deal?
Moreover, why would a $5-million deal be signed with a group of
councillors (albeit a majority) without the consent of the chief and
other members of council and in defiance of two community referendums?
More importantly, in the end, what is the community left with? The
answer to that question is not so easy to provide.
Some believe Mr. Michael, a former RCMP officer, shunned the new chief
because of Mr. McDonald's reputation as an activist with a bad temper
and a longtime member of the Mi'kmaq Warriors Society.
Some say Mr. Michael was primed by bureaucrats who abhorred the thought
of dealing with Mr. McDonald, known for his outspokenness and his
delight in taunting bureaucrats.
Mr. Michael says nothing. In fact, neither he nor any of the seven
councillors who have lined up behind him have been anxious to speak on
the issue. With few exceptions, Mr. Michael has refused comment on
these matters over the past two years.
If there is any truth to the old dictum that actions speak louder than
words, then Mr. Michael's actions were in stereo.
With eight of the 11 other councillors in his corner (some community
wags initially dubbed the group the Crazy Eights, then the Crazy Eights
Plus One), Mr. Michael approached the federal, provincial and
aboriginal negotiators who were charged with working out treaty issues.
Called the Made in Nova Scotia Process, this group put together a
fisheries agreement with the eight councillors. The Department of
Fisheries and Oceans facilitated the deal with the quorum of
councillors.
This agreement was put together in the face of opposition from the
chief and the other band councillors and in spite of the community's
long-standing refusal to sign.
A LITTLE BIT
OF HISTORY
UNLIKE 10 other bands in this province, the people of Indian Brook
refused to sign a commercial fisheries agreement with DFO. The
communities of Bear River and Paq'tnkek (formerly Afton) also opted
not to sign.
"It is our inherent right to fish, guaranteed by the treaty, and we
always said we want to fish in a way that guards the stocks for future
generations, but it is our right and we will regulate it," Mr. McDonald
said.
Over the past six years, there have been two community referendums,
court battles and seizures of boats and equipment, but people remained
unmoved in their commitment to the battle.
Some called them stubborn. Some said they were foolishly depriving
themselves of jobs in a job-starved economy, cutting off a source of
much-needed income, but still they stood in firm commitment to their
beliefs.
Even some DFO workers admitted a grudging respect for their
determination.
"There were potentially millions at stake and yet they kept refusing to
sign - on principle," one DFO source said. "You had to admire them
some."
The somewhat circuitous story behind this First Nation's venture into
the fishery over the last year is best brought into focus by casting
back over 200 years ago to peace and friendship treaties signed between
the British government and native tribes.
In 1999, the Supreme Court of Canada agreed the peace and friendship
treaty of 1760 guaranteed the Mi'kmaq's right to hunt and fish.
Of course, in a clarification that became known as Marshall II, the
court further determined that for conservation purposes, the government
still had the right to regulate the industry.
Other First Nations communities accepted regulated access to the
commercial and food fisheries, along with millions of dollars in boats,
gear, training and economic development opportunities related to the
fishery. Indian Brook kept refusing.
THE AGREEMENT
BECAUSE THE CHIEF and three other councillors wouldn't sign on to the
deal, Mr. Michael and the other councillors avoided council meetings
like the plague. Instead, they would have meetings themselves at Tim
Hortons or at hotels near Halifax and Truro.
"Nothing was getting done in the band office," Mr. McDonald said. "We
had funding in place to build a new school but couldn't get anything
done because they wouldn't come to meetings. We had to make decisions
about land and business opportunities in Hammonds Plains and we
couldn't get it done.
"Our only gas station went out of business because we couldn't get
gas, our hardware store went under and our finances were so bad, we
went into co-management.
"The majority of council wouldn't show up for meetings, and when they
did it was to push through resolutions that would serve their own ends
- nothing to help the community."
The group of councillors formed a company known as Indian Brook
Fisheries Ltd. in 2005 and another company called Indian Brook Marine
Supply in May of this year. They appointed themselves directors of both
companies.
The contribution agreement with DFO promised the group $5 million for
training, boats, vehicles, property, equipment and fishing gear.
The group had to sign a legal document before any money was disbursed.
To get the document signed, the group asked Indian Affairs to hold a
special council meeting. No signature could go on any document with any
government department without a band council resolution.
A meeting, chaired by an Indian Affairs representative, was promptly
arranged at a hotel last October.
Jim Maloney used to work as safety co-ordinator for Indian Brook
Fisheries Ltd. He's not the first to wonder why Indian Affairs was so
anxious to facilitate the request.
"You have to wonder why, when they knew damn well the community was not
in agreement with this," he said.
Spectators were treated to the rare sight of a community's chief
being cut out of the process, publicly pleading with members of his own
council and then breaking down in tears when the resolution was passed
to accept DFO's offer.
In the meantime, a training program had already started months earlier
and about 150 band members were being trained. They received a weekly
salary of $500.
Mr. Maloney said he was privy to some of the meetings in the beginning
and he kept asking questions.
"I was worried about liability and had a number of questions about who
gave these councillors the authority to set up a company and appoint
themselves as directors," he recalled.
"They were beginning to get annoyed with my questions."
Another man who started to ask questions was Keith Paul, a band
councillor.
Initially, he was listed as a director of the company but he soon left
the group because he had so many questions.
Since then, Mr. Paul has said he believes the community should be
fishing but he was concerned about the lack of answers to his
questions.
Meanwhile, employees were hired, offices were set up, equipment was
purchased and lobster and crab licences were being fished - all of
which cost money, and no money would be forthcoming from DFO until the
legal document was signed.
ENTER REG LEBLANC
MANY WHO MAKE their living in the fishing communities across the
Maritimes feared the Marshall decision would mean First Nations people
would be horning in on an industry already suffering from a lack of
resource and dwindling stocks.
Instead, First Nations fishing agreements with DFO seemed to have
represented a virtual cash cow for many in the non-native fishing
industry over the past few years.
Boats and licences had to be bought, equipment purchased, training
taken and bait bought. And since few native communities had experienced
fishermen, captains and well-trained crews in non-native communities
would be busy for years.
In short, there would be lots of money to be spread around.
Since Indian Brook Fisheries Ltd. operated from August 2005 until
sometime in early 2006 before getting one dime of DFO funding, it
required what might be referred to as interim financing.
Enter Wedgeport businessman Reg LeBlanc.
Mr. LeBlanc has had Indian Brook Fisheries Ltd. pretty well wrapped up
since last year and he makes no bones about it. Mr. LeBlanc speaks
openly about the deals he made with the fishing company.
"They came and interviewed three or four lobster buyers in the area and
they liked me," said Mr. LeBlanc, who is a close friend of former
federal fisheries minister Robert Thibault.
The group hired Mr. LeBlanc's ex-wife's uncle, John Amero, as a
fisheries consultant but Mr. LeBlanc said the family relationship was
not why he was chosen.
Mr. Amero, a former Kentville police officer, did not return calls made
to his home over the past two weeks.
The contribution agreement signed with DFO allowed $104,000 for a
fisheries consultant's salary.
Mr. LeBlanc, meanwhile, owns Wedgeport Lobsters and International
Marine Brokers and is a partner in Gerret Enterprises. He freely admits
he lent money to the company to tide it over until funding came in from
Fisheries and Oceans.
"That's between me and them how much I lent them," he said.
Nonetheless, over the course of a year, Mr. LeBlanc sold the company a
boat for $210,000 and brokered the sale of nine other boats through his
company International Marine Brokers.
He also sold Indian Brook Fisheries used lobstering equipment and,
through Gerret Enterprises, he sold the company a piece of land in
Clark's Harbour.
His partner, Terry Zinck, described the landlocked property as a
1.2-hectare parcel of land with a metal office building on-site.
"It's a piece of land and a building. . . . It's a modern office
building that will be renovated into housing for the fishermen," Mr.
Zinck, president of Gerret Enterprises Inc., said during a recent
telephone interview.
The property sold for $185,000.
"Plus $52,000 for renovations to the building," Mr. Zinck said.
He said the fishing company's lawyer, D. Bruce Clark, is holding back
the $52,000 until the renovations are finished. It's not known when
the deal will be completed but Mr. Zinck said the property is now in
the name of the Shubenacadie band and not Indian Brook Fisheries Ltd.
According to the agreement with DFO, all assets must be listed in the
name of the band, not the fishing company.
Meanwhile, Mr. LeBlanc said he had an exclusive "gentleman's
agreement" to buy all the lobster and crab the natives were licensed to
fish.
"I made some money, sure, that's what I'm in business for," he
said.
Other boat brokers in the area complain Mr. LeBlanc's deal with the
natives - lending them money - meant they were shut out of the boat
deals.
"I showed Mr. Michael a boat and he liked it but he told me he was
obligated to someone else so he couldn't buy it," one broker said.
Nonetheless, some boat captains who worked with Indian Brook Fisheries
Ltd. say they believe Mr. LeBlanc probably gave the natives fair value
for their money.
"I don't believe Mr. LeBlanc ripped them off," said one captain who
did not want his name published. "Sure, he had them all sewn up and
nobody else could do business with them, but I think he paid them a
decent price for their catch."
Mr. Maloney said the councillors were tied to Mr. LeBlanc.
"He bridged them the money and they had no other means of getting money
until the DFO cheques arrived," Mr. Maloney said.
"I don't know what these guys had in mind; I know those councillors
and most of them were acting because they really wanted to help the
community.
"But I told them, if this whole thing goes sour, it'll come back and
bite you bad.
"You got to remember, people in Indian Brook are destitute. Everybody
up there needs work, so I guess they thought they were doing the right
thing."
Where was the money going? Mr. Maloney wondered.
"The thing is, who was getting the lion's share from all that lobster
and crab? Who was making the real money?
"It was the first mates on the boats, the captains and the non-native
crews and Reg LeBlanc. We had this big, land-based administration staff
and we were only getting about 30 per cent of the take."
On the subject of honorariums, many people in the community figure the
$36,000 annual salaries would have been enough for the councillors but
that might not be so.
Despite the band's conflict-of-interest guidelines, which forbid
councillors from collecting income from band-owned businesses,
councillors admitted during a rare full council meeting in the spring
that they were getting what they called honorariums.
Mr. McDonald, Mr. Maloney and many others in the community are
convinced some councillors were profiting handsomely on a weekly basis.
Recent revelations indicate Mr. Michael made between $1,900 and $2,100
a week after he appointed himself fisheries manager of the company.
According to the agreement signed with DFO, the manager's salary is
supposed to be $54,000 a year. Some of the other councillors took home
lesser amounts each week as fisheries advisers.
Neither Mr. Michael nor the councillors had any experience in the
fisheries.
"The proof will come out. It's just a matter of time," Mr. McDonald
said.
Meanwhile, community members wait to find out how money was spent and
what assets the community now owns.
The 10 boats brokered through International Marine Brokers are still in
the names of the previous owners.
DFO hired a Newfoundland boat brokering company, TriNav, to check out
the vessels and take care of the paperwork. Osbourne Burke, a TriNav
spokesman, said recently that when a new band council is elected, a
band council resolution is all that's required to have the ships
registered in the band's name.
Meanwhile, companies owed money by Indian Brook Fisheries Ltd. are
getting antsy.
IMP of Dartmouth has started legal proceedings in Nova Scotia Supreme
Court to recover $35,000 in goods sold to the fishing company. Another
marine supply company called Rainbow Nets and Rigging had marine
supplies for sale at Indian Brook Marine Supply Inc., which is now
closed.
Kathy Stewart, who heads up aboriginal fisheries in the region for DFO,
says despite all that has gone on in Indian Brook over the last year,
she believes the community will benefit in the long run.
"They'll have assets and they'll have trained crews and they'll
be able to have an industry that will benefit the community."
'The thing is, who was getting the lion's share from all that
lobster and crab? Who was making the real money?
It was the first mates on the boats, the captains and the non-native
crews and Reg LeBlanc. We had this big, land-based administration staff
and we were only getting about 30 per cent of the take.'