A group of southern chiefs is under fire for allegedly squandering more than a quarter million dollars on expenses, including a vehicle, unauthorized travel to Las Vegas and traditional healing -- described by one source as the removal of a curse.
Officials in Ottawa have imposed a Friday deadline for the Southern Chiefs Organization (SCO), representing 33 Manitoba First Nations, to clarify the charges or return $261,587 in expenses from 2010 to 2013.
None of the allegations has been proven.
The organization's current head, Grand Chief Terrance Nelson, said he had co-operated with the investigation. The auditors, he said, had not even spoken to any of the leaders alleged to have misused funds.
The money is part of an annual $500,000 federal grant to the chiefs to promote their treaty interests and most of the alleged misspending was laid at the feet of Nelson's dismissed predecessor, Murray Clearsky, and his chief of staff, Mike Bear. Some was attributed to the chief who preceded Clearsky, Morris Swan Shannacappo.
Chiefs removed Clearsky last October amid allegations he took $10,000 of SCO funds for a gambling trip to a Minnesota casino and amusement park. The federal audit said the total sum associated with unaccountable travel really stood at $28,772, charged to an unauthorized debit card between July and September 2013 for the grand chief and his chief of staff. A separate claim of $5,444 was made for trips to Las Vegas and Minneapolis.
Expenses also covered a widely publicized "awareness ride," a horseback caravan taking an undisclosed number of supporters to northern Saskatchewan for a treaty meeting that ultimately played a role in challenging the authority of the Assembly of First Nations and the resignation this spring of national chief Shawn Atleo.
"The investigation identified a number of transactions totalling $261,587 of AANDC (Aboriginal Affairs and Northern Development Canada) funds that were inappropriate or questionable," said a summary of the audit's findings examined Tuesday by southern chiefs. "If no additional information is provided by (Friday), AANDC will consider the amounts to be liabilities of the Southern Chiefs Organization and subject to recovery," the department said in a July 25 letter.
Nelson, elected in the turmoil that followed the spending scandal that cost Clearsky his job, defended the actions of his predecessors.
"Some of that information in the audit is not true and it needs to be clarified... and the people who are accused of these things have a right to defend themselves," Nelson said by telephone.
Investigators pored over receipts, funding authorizations and cellphone records for three weeks. Nelson said he had opened the books, but investigators had spoken to none of those accused of abuses: "They did not interview Morris Shannacappo, Murray Clearsky or Mike Bear. They are just going by what they have on paper and some of that is not validated."
Shannacappo said the expenses for traditional healing were no different from claims submitted by other organizations, even government, for non-traditional treatment.
"On healing practices, that's done by other leadership, as well," he said by telephone.
"Government does the same thing... . This is no different than going to Billy Graham," he said, referring to the high-profile U.S. evangelist.
In 2012, the former grand chief said, he fell ill owing to what he described as bad medicine, tantamount to a curse, lost 36 kilograms and underwent treatment in St. Boniface Hospital.
A spiritual leader was called to his bedside and paid a fee -- a small portion of the $50,000 being questioned by auditors. "She came to help me get better and she gave me some (herbal) medicine and she did a ceremony."
He recuperated enough for surgery to remove his gall bladder.
Clearsky didn't return a call for comment. Other allegations focus on the purchase of a $25,000 company vehicle -- described by Shannacappo as a donation -- severance pay for Shannacappo, and nearly $100,000 in payouts to two former employees. That payout involves a pending human rights complaint against former chief of staff Bear, who also received a payout.
Other First Nations groups are also being subjected to audits. Federal officials confirmed they had ordered an investigation of Manitoba's northern chiefs, known as MKO.
"AANDC received allegations that federal funding provided to Manitoba Keewatinowi Okimakanak Inc. (MKO) was not being used for intended purposes," said a federal statement.
Northern Grand Chief David Harper welcomed the audit and said he wanted it expanded to include $1.1 million in questionable employment-and-training spending going back to 2005.
"I'm very glad KPMG is on board," he said by telephone, referring to the auditing firm.
"I'm confident it'll be given a fair analysis. It will put me in a position to defend myself."
Harper has weathered calls from northern chiefs to step down over purchases of guitars as gifts and trips with his girlfriend.