Judge calls Red Pheas­ant scheme ‘cor­rupt’

Saskatoon StarPhoenix - - FRONT PAGE - HAN­NAH SPRAY

The il­le­gal ac­tions of a Saskatchewan First Na­tion chief and the gravel com­pany that agreed to pay him al­leged kick­backs are “no less cor­rupt” than the al­le­ga­tions of Que­bec civic of­fi­cials ac­cept­ing fees for award­ing con­tracts, says a Queen’s Bench judge.

W. Downer Hold­ings Ltd. took the Red Pheas­ant First Na­tion to court to try to get pay­ment on a set­tle­ment agree­ment the First Na­tion re­fused to hon­our with the gravel-crush­ing com­pany. The his­tory be­hind the set­tle­ment re­veals promised pay­ments to the chief and, ac­cord­ing to the judge, a pos­si­ble “machi­avel­lian scheme” by the First Na­tion to pre­tend to set­tle the law­suit for its own gain.

“If both par­ties come to the court with un­clean hands and par­tic­i­pate in the same or in­de­pen­dent il­le­gal­i­ties, the court should ... as­sist nei­ther,” Jus­tice Brian Scher­man said in a writ­ten rul­ing is­sued last month at Bat­tle­ford Court of Queen’s Bench.

The story be­gins in 2010 when Red Pheas­ant Chief Ste­wart Bap­tiste en­tered into two con­tracts with W. Downer Hold­ings for the crush­ing and stock­pil­ing of gravel.

The first con­tract, dated April 21, 2010, called for the crush­ing of 50,000 tonnes of gravel at the price of $6 per tonne.

The sec­ond, dated June 22, 2010, called for the crush­ing of an ad­di­tional 25,000 tonnes at the price of $8 per tonne. That one came with a “sub-agree­ment” that said Bap­tiste would be paid $1 for ev­ery tonne crushed and $1 for ev­ery tonne sold un­der that agree­ment.

Nei­ther con­tract was ever con­sid­ered or ap­proved by the band coun­cil of Red Pheas­ant, lo­cated about 30 kilo­me­tres south of North Bat­tle­ford.

Wade Downer, pres­i­dent of W. Downer Hold­ings, tes­ti­fied he saw the sub-agree­ment as a re­fer­ral fee and he didn’t see any­thing il­le­gal about it, ac­cord­ing to the rul­ing. “He said he thought that this was the way busi­ness was done with First Na­tions,” Scher­man wrote.

The gravel com­pany crushed and stock­piled a to­tal of 75,000 tonnes. Red Pheas­ant paid $215,000 to­wards the first con­tract, but noth­ing for the sec­ond con­tract. Bap­tiste never col­lected any money.

W. Downer Hold­ings then com­menced ac­tion in Septem­ber 2010 for the $285,000 that re­mained ow­ing on the two con­tracts. Red Pheas­ant took the po­si­tion both con­tracts weren’t valid be­cause they hadn’t been passed at a band coun­cil meet­ing, as re­quired un­der the In­dian Act.

Set­tle­ment agree­ment

In Au­gust 2011, Red Pheas­ant band mem­ber Gra­ham Wut­tunee — who had no au­tho­riza­tion from the band coun­cil — be­gan ne­go­ti­at­ing with Downer via text mes­sage. They agreed to set­tle­ment terms but rather than tak­ing the agree­ment to coun­cil, Gra­ham Wut­tunee ob­tained in­di­vid­ual sig­na­tures of six band coun­cil­lors and gave the set­tle­ment agree­ment to Dale Wut­tunee, the band man­ager.

Dale Wut­tunee faxed the set­tle­ment agree­ment to Downer’s lawyer with the cover page read­ing, “Agree­ment signed by quo­rum of coun­cil.” Downer signed the agree­ment.

Red Pheas­ant never hon­oured it, pos­si­bly be­cause it never in­tended to, Scher­man found.

At the time the set­tle­ment was ne­go­ti­ated, a ru­ral mu­nic­i­pal­ity wanted to buy some gravel from Red Pheas­ant, but it ap­pears the RM “may have been con­cerned that the gravel would be sub­ject to some form of lien if the lit­i­ga­tion con­tin­ued,” Scher­man wrote.

Af­ter Red Pheas­ant got a copy of the set­tle­ment, it sold some gravel to the RM but never made any pay­ments to W. Down­ing Hold­ings.

Scher­man said he was “trou­bled” by ev­i­dence at trial that sug­gested at least some of the Red Pheas­ant mem­bers were “well aware” of the In­dian Act’s pro­vi­sion about the ne­ces­sity for band coun­cil meet­ings and that they con­spired to de­liver the non-valid agree­ment.

“This sug­gests a machi­avel­lian scheme of mak­ing the lit­i­ga­tion re­spect­ing the gravel seem to dis­ap­pear for a time so as to per­mit the band to make an avail­able gravel sale and then re­pu­di­ate the agree­ment,” Scher­man wrote.

Nev­er­the­less, he found the set­tle­ment agree­ment is not bind­ing on Red Pheas­ant be­cause it wasn’t agreed to at a band coun­cil meet­ing.

How­ever, the judge went one step fur­ther, com­ment­ing on the il­le­gal­ity of the June con­tract and the im­por­tance of con­tracts be­ing awarded on the ba­sis of merit “as op­posed to be­ing in­duced by the con­se­quence of the pay­ment of bribes, kick­backs or other un­der­the-ta­ble ben­e­fits.” Scher­man drew a com­par­i­son to the on­go­ing Char­bon­neau Com­mis­sion In­quiry in Que­bec.

“It is no less cor­rupt to agree to pay Chief Ste­wart Bap­tiste and for Chief Ste­wart Bap­tiste to seek to re­ceive a fee of $1 per tonne of gravel crushed than it is for Que­bec con­trac­tors to pay, as al­leged, a fee of one per cent to the city en­gi­neer and/or a 3.5 per cent fee to the mayor’s po­lit­i­cal or­ga­ni­za­tion for con­tracts awarded to them.”

Bap­tiste was re-elected as chief at Red Pheas­ant in March. He made head­lines at that time be­cause he learned of his vic­tory while in a po­lice cell on charges of vi­o­lat­ing a pro­ba­tion or­der.

He is also sched­uled to go to trial on a drunk driv­ing charge in Au­gust 2013.

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