A leaked internal Assembly of First Nations' memo reveals that about two-thirds of the organization's 2003-2004 core budget has been frozen until after the annual general assembly in July.
Dan Brant, the chief operating officer for the AFN, told Windspeaker the decision came directly from the minister of Indian Affairs. He also said he believes the minister is trying to influence the outcome of the election for national chief with the move.
National Chief Matthew Coon Come has resisted the minister's First Nations governance initiative and relations between the two men have soured. Speculation in Ottawa is that the minister would not be upset if Coon Come loses the election for national chief in July. A move to withhold a significant amount of money from the AFN until after the chiefs decide who will lead the organization for the next three years could be seen as a threat, a pressure tactic telling the chiefs not to send Coon Come back for a second term.
The confidential memo to the AFN executive board, authored by the AFN's chief financial officer Frederic Tolmie, is entitled "Briefing Note on 2003-2004 DIAND Budgets." It was written on May 29. DIAND is an acronym for Department of Indian Affairs and Northern Development.
Tolmie advised the political leaders of the AFN that they have been put in a tough situation.
"The minister of Indian Affairs has decided to postpone approval of AFN's core-like budget until he receives AFN's audited financial statement for the current year ended March 2003. Audited financial statements are not normally distributed externally until after they are approved at the annual general assembly," he wrote. The core-like budget is discretionary, not statute mandated.
The chief financial officer reported that the dollar amount agreed on for core-like funding by AFN and DIAND officials and awaiting ministerial approval was $4,220,000. That includes an inflation increase of $250,000 over previous years. A $2.1 million core budget from DIAND was made available to the AFN at the beginning of the fiscal year.
"The discussions on [the core-like] budget concluded over three weeks ago. Since then we've been waiting for the minister's approval which is required prior to final sign off on the funding agreement. On May 28 we were informed of the minister's decision. We do not have his exact decision in writing, but we have requested it. We've been informed that the minister believes that current DIAND funds have been inappropriately spent on a 'Command and Control Centre' and wishes to await the outcome of our current audit to determine if material improprieties have occurred," Tolmie wrote.
He added that the minister's decision could lead to "possible insolvency of AFN leading into its election process" and the "perception of inappropriate DIAND interference in AFN's election process."
He told the executive members that the AFN annual general assembly (AGA) scheduled for July 15 to 17 in Edmonton would not be jeopardized.
"As for AFN operations, existing cash resources plus our $1 million line of credit plus outstanding accounts receivable plus interim DIAND funding should ensure that AFN has the necessary resources to continue through the AGA," Tolmie wrote.
Brant also said the AGA was in no danger. He told Windspeaker the minister's decision is clearly an attempt to pressure the chiefs who will vote for national chief.
"Friday (May 30) we hear that he's taken this decision, that he's just said, 'I want to look at the audited statements.' To me, that's code for 'I want to wait until after the election' because our audited statements are not approved until they're ratified on the floor of the general assembly. That has been the process for the last 24 years," Brant said.
He was asked if he was certain the minister knows this.
"Oh, absolutely. There is no mistake that he could think otherwise," he replied. "If we sent interim statements, I'm sure the response would be, 'Well, these havent been approved.'"
Brant said the organization is in solid financial shape and is not making use of its $1 million line of credit. But he can't spend money he might not receive, he said, and that could paralyze the AFN for several months.
"We are definitely not in a deficit," Dan Brant said. "We are in the black, but the problem is that we have a huge number of activities that have been planned between now and the annual assembly which are going to have to be put on hold. The spin that the minister is going to put on it, I'm sure, is that we're not undertaking the work. Well, I can't undertake the work say, for example, on education. There should be a chiefs committee on education to advance the issues on education and it's not going to happen because, as a prudent manager, I cannot take the risk that we're not going to get reimbursed. The minister has proven to us in years past that he's more than willing to say, 'You didn't have an agreement. Why did you spend the money?' He has said that to us in years past."
During negotiations, Brant said, departmental officials commented that the minister is concerned the AFN improperly used money allocated for programs to fight the First Nations governance package. He flatly denied it.
"I would challenge him to make some specific allegations. He will not find in the audited statements that we've taken money from other programs to fund this activity. They just won't find it. It's just not there," he said.
When reached for comment on June 5, Nault insisted he's not targeting the AFN.
"It's not just AFN's core-like budget, it's every [provincial, territorial organization (PTOs)]. We have changed the policy. They know that," he said. "As I understand it, everyone else is complying with that across the country. What's a little more surprising than that is that we just flowed over $2 million to the AFN as of April. Am I being told that a million dollars a month isn't enough? That's what you're basically telling me. Not onlythat, we've flowed money for education already. So part of our process is to make sure that we're accountable to taxpayers and we want an explanation of last year's spending on the core-like, just to protect the transparency of my role as the minister of Indian Affairs."
Dan Gaspe, the AFN's parliamentary liaison, provided information to MPs while leading the fight against the governance legislation and at the same time, AFN staff suspect, angering the minister. The minister was asked if he had a problem with the parliamentary liaison or with the command and control centre set up at AFN headquarters to fight the governance legislation.
"In a conversation with the national chief, he made it clear to me that they weren't spending taxpayers' money on this implementation committee because it was not part of a work plan," Nault responded. "I understand there's even a public record of that at one of the confederacies where he made it very clear that funding that came to the AFN from the department was not going to be used for the implementation committee because there's no work plan that allows that. So certainly I said to Matthew that I was concerned if they were spending the lion's share of their money because discretionary funding and the core-like was intended to allow for the AFN and ourselves to work on major initiatives. So if someone in the memo was saying I have a concern with that, I certainly do."
He was asked if he suspected government money was being used improperly.
"Well, I'd like to know. That's part of the reason why I want the audit. I want to know what the money was spent on last year. The other concern I have is that they've had a series of confederacies above and beyond the normal amount that we fund. We normally fund the general assembly every year and I think it's two confederacies. There's been probably five or six this year. If you recall, Matthew had been suggesting to the chiefs that they put together a war chest for fighting the FNGA and t was supposed to come from the communities and they were asking for $10,000. The reason for that is because, obviously, they know that there was not to be taxpayers' funds used for that purpose," he said.
As for Brant's charges that he's interfering with the AFN election by withholding money, the minister said it's just not so.
"Well, I have to say that's totally, factually wrong. We just moved $2 million," he said. "We sent that as of the new fiscal year. That was based on our normal process of keeping the organization flowing and then waiting for the audit, which usually comes in June. And we look at it and there's no difficulties we accept the agreement on the core-like and away we go. That's the way we're operating with all the PTOs. Plus, I'll repeat again, we've moved money for education. So I think there's no merit to the accusations that somehow we're interfering. I'm not the only funding agency, by the way. I understand they get a significant amount of money from other departments of this government. So to suggest that somehow Bob Nault is affecting the AFN election in some way is, I think, a gross exaggeration and not factually fair, really."
Brant said the parliamentary liaison position and the command and control centre were "areas where we have to find other sources of funding as we do for economic development and housing and international."
They are funded partly by money from the internal administrative charge the AFN takes from budgets, by savings realized when the department created an in-house legal department, by accumulated surpluses and by monies raised through donations, fund-raising and own-source revenues, he said.
Brant said the minister's suggestion that the AFN is getting a million a month was more than a bit off target.
"Let's see, April to August, where does he get two months?" he asked. "This million dollar a month thing. It's catchy but it's wrong. After they receive the audit, which is the middle of July, then they will take s