Documents show Ottawa knew of MANFF troubles more than a year ago

By Melissa Ridgen
APTN Investigates

Alarm bells went off in Ottawa a year ago that there was trouble with a Manitoba Aboriginal aid agency. The Manitoba Association of Native Fire Fighters (MANFF) is currently under investigation for financial mismanagement. In 2012 the federal government knew there were problems with the organization but did little to stop the financial bleeding.

New documents obtained by APTN Investigates through freedom of information, also seem to confirm what a whistleblower said — that there was little scrutiny of MANFF’s use of more than $85 million until it was too late.

In the spring of 2011 the Manitoba government intentionally flooded Manitoba’s Interlake area to spare Winnipeg from high water. It resulted in a handful of reserves being evacuated. Little Saskatchewan and Lake St. Martin First Nations were essentially written-off. Thousands of people had to be put up in hotels around the province.  MANFF was put in charge of caring for evacuees while they waited to go home.

In late 2012, Aboriginal Affairs (AANDC) hired Hallux Consulting. It was to conduct a review of MANFF’s operations. A work agreement between the two suggests concerns that MANFF was in over its head 19 months into the evacuation.

“The length of evacuation has been unprecedented, placing considerable strain on the capacity of MANFF to provide required services to the evacuees and to meet requests for information from AANDC,” the agreement says at one point.

Emails between AANDC staff and Hallux reveals concern over how allegations of misspending by MANFF were playing out in the media earlier this year.

A media line considered was that MANFF would not be provided additional funding to help evacuees “until fully satisfied that the organization can manage these funds appropriately.” However, the AANDC’s Emergency Management Coordinator Brock Holowachuk toned down the response to say that a decision on how benefits to evacuees were to be delivered had “not yet been made.”

Emails also suggest that AANDC was anticipating another organization would replace MANFF. In a May 30, 2013 letter, Holowachuk writes that the federal government would “work with MANFF to establish a transition plan so there is minimal disruption to evacuees.”

Back in June Aboriginal Affairs Minister Bernard Valcourt did announce that MANFF would hand over the reins to the Canadian Red Cross. That hasn’t happened and nothing in the email trail suggests that the plan has been acted upon. Evacuees like Bertha Travers speculate it was AANDCs attempt to get the media heat off of MANFF.

Travers said all the Red Cross did was listen to complaints about the inter-governmental wrangling that has left them homeless, and MANFF’s treatment of evacuees.

“We told (the Red Cross) about the devastation we went through. How we have been treated. We told them everything,” she said, expecting the international aid agency would take over. But they haven’t. For its part, the Red Cross said it only committed to do an assessment for the feds of the evacuee situation — not take over from MANFF.

Even MANFF seemed to think they were. On the heels of Valcourt’s announcement MANFF released a statement saying it “welcomed the transition, from its organization to the Canadian Red Cross, of services relating to the 2011 flood evacuation. As part of this process, MANFF is committed to ensuring a smooth changeover.”

“It was useless. Pointless. Just absolutely useless and a waste,” Travers said of the announcement and the Red Cross’ assessment.

Some 2,000 people remain displaced 31 months later as band, provincial and federal governments wrangle about relocating and rebuilding the reserves. MANFF is still in charge of them. And has refused repeated requests for interviews with APTN.

Meanwhile, most evacuees have since been moved out of hotels and into private residences. Misty Lake Lodge is for sale and a Winnipeg man is hoping to turn it into a treatment facility for recovering drug and alcohol abusers, pending zoning approvals to do so.

A former MANFF staffer who came forward last spring with an armload of damning documents, told APTN Investigates back then that MANFF knew how to exploit cracks between the provincial and federal governments, and did. The province, through its Emergency Measures Organization (EMO), pays MANFF to care for evacuees and is reimbursed by Ottawa. The whistleblower said EMO basically rubber-stamped all expenses MANFF submitted, because in the end, EMO was getting reimbursed by Ottawa.

By the time Ottawa started questioning where the money was going, mountains of bills were unpaid and media was all over the story of a $1-million tab for late-night snacks, a romantic trip taken by two MANFF staffers on the company dime, and outrageous overtime and mileage claims by senior MANFF staff, and in some cases, their kids. Those claims are part of an audit by KPMG into allegations of financial mismanagement.

MANFF has faced a barrage of criticism over its handling of the 2011 flood file. Evacuees claim they’re bullied by staff, hotels complained of hard-core partying by MANFF workers, non-payment of food and lodging bills by the aid agency, including a $2.6-million tab MANFF didn’t pay to two hotels.

“We sent all the information to (AANDC), they had independent auditor looking through all our invoices, an investigator going through all the emails, and after going through all the documents they agreed we were 100 per cent in the right and that’s why they paid us,” said Retha Dykes, manager of both Misty Lake and the Ashern Hotel. “Again, (AANDC) paid us — not MANFF. MANFF received the money already but Aboriginal and Northern Affairs were the ones that paid the invoices. So I’d like to know where that money is because taxpayers have paid that bill now twice.”

Internal emails now show at the time, AANDC was concerned that Misty Lake and Ashern were charging full rates instead of discounted rates for long-term guests.

Dykes, however, provided APTN Investigates with a copy of an email sent to MANFF in November 2012 offering to discount the room rates. MANFF never bothered to reply, she said, and so they continued billing at the full price. That was eight months before the ‘unpaid bill’ story blew up.

Dykes says it’s just one example of blatant mismanagement at MANFF.

The agency has fallen behind again, not paying invoices since April 22, 2013, Dykes said, adding it sits at about $2-million.

In a statement to APTN Investigates, MANFF said “payment on these accounts will only be made once MANFF, lawyers, AANDC, EMO and (independent accountants Meyers Norris Penny) all agree that the payment is correct and Disaster Financial Assistance eligible.”