Ottawa Report

Page 2

If tehre was a hall of fame for Native communications, Josepi Padlayat and Paul Lumsden would have been in it a long time ago. After all, they built the northern Quebec Inuit broadcast organization and they ran it for years. The organization is Taqramiut Nipingat Incorporated (TNI). Josepi Padlayat used to be the TNI president. Paul Lumsden used to be the administrator. Together, the two men built TNI into a $2-million-a-year operation.

The trouble is that a lot of that money stuck to their fingers. As a result, yesterday's heroes have become today's crooks. They were convicted in an Ottawa court recently of swindling the organization they helped to build. They're probably on their way to prison.

The story begins in 1981 in northern Quebec. Padlayat and Lumsden arranged a housing deal that made a $98,000 profit for TNI. But they didn't want the profit to show up on the TNI books. They were afraid the Government would force TNI to return the money because TNI is a non-profit organization.

So Lumsden had an idea. He convinced Padlayat that a dummy housing corporation should be set up to handle the money. They then persuaded the TNI board of directors to approve the plan. But they apparently did not say anything to the board about the $98,000 and they apparently didn't say that the money would be handed over to the dummy corporation.

The president of the dummy corporation was Josepi Padlayat. The administrator was Paul Lumsden. After the dummy corporation received the money, Padlayat signed a $7,000 cheque to Padlayat. Neither payment was approved by TNI or the dummy corporation. The two men eventually explained the payments by saying they were "loans".

In addition to the housing scam, Lumsden was also convicted of defrauding TNI on another matter. He overcharged TNI $8,000 for charter aircraft flights he arranged for the organization. In one case, he arranged to have the charter company send a phony invoice to TNI to cover up the fact that it was his own airplane that was used for the flight.

After the TNI board learned about the $98,000, a bitter power struggle erupted. One lawyer called it a dogfight. TNI spent almost two year trying to get the money back. Before the fight was over, a half-dozen staff members were fired or forced to resign. The beginning of the end finally came when some of the staff complained to the Government and to the police.

The verdict was sad news for those people who respected and admired Josepi Padlayat and Paul Lumsden. But it was a day of celebration for those people who had struggled for years to break the stranglehold the two men had on TNI. Lumsden's and Padlayat's opponents were happy because they say the cloud that's been hanging over TNI has finally been lifted. They say the verdict has finally placed the blame for TNI's tarnished reputation where it belongs ? on two men whose greed overcame their principles.

All in all, the trial and the verdict was a healthy development for the Native movement. The frightening thing about the case, though, was not the fraud itself. It was what Padlayat and Lumsden said to defend themselves. Here's a list of some of the things their lawyers said on their behalf:

1)They said they didn't read legal documents before they signed them. 2) They said they didn't ask to see the financial records. 3) They said they intended to pay back the "loans". 4) They said they did what they did for the good of the organization. 5) They said that the people who testified against them were biased and out to get them. 6) They said they might be guilty of a conflict of interest but they said that wasn't a crime. 7) They said they might have committed a mistake in judgement but they said that wasn't a crime either. 8) Lastly, they said that since they built the organization there was no reason why they would want to steal from it.

There whole argument scared the hell out of me. Why? Because over the years I've heard exactly the same excuses from a lot of othr Native people involved with a lot of other Native organizations.

Maybe that's the lesson that should be learned from this whole episode ? that too many Native groups take too many shortcuts and trust too many people. And that not enough Native groups demand the highest level of performance and the strictest standard of accountability.

I think, therefore, that every Native organization should now take a long, hard look at their own operation. The people who should be doing the looking are the people on the board of directors. Being a member of a board of directors means a lot more than just going to a meeting and sticking up a hand to second a motion. It's a serious responsibility. Just as the name implies, the directors direct the affairs of the organization. But they also have a duty to protect the organization from theft and fraud, among other things.

The mess from the TNI affair is finally being cleaned up and I'd like to think that the lesson won't be wasted. I'd like to think that other directors in other organizations will clean up their act too, but somehow I doubt it.