Chief’s lawsuit claims conflict of interest

First Nations leader says he lost job after campaigning to expose alleged problems within health authority

A lawsuit filed by a First Nations grand chief is raising allegations that the First Nations Health Authority is mismanaged and that its former CEO was involved in a conflict of interest.

Grand Chief Doug Kelly, president of the Sto:lo Tribal Council, claims in the lawsuit that he lost his job as chairman of the First Nations Health Council after his “persistent” campaign against the alleged mismanagement and conflict of interest at the health authority.

The health authority plans, designs, manages, advises and funds the delivery of First Nations health programs across B.C. It gets about $600 million in funding every year, most of that from the federal government. The First Nations Health Council, comprised of 15 members, is a political and advocacy organization that represents and is accountable to B.C. First Nations, with its members also being members of the authority.

Kelly, who acted as chairman of the council from June 2010 until he was removed in July, claims that in 2017 the authority’s then-chief executive Joe Gallagher recommended to the authority’s board the creation of a new senior management position of vice-president of policy, planning and quality.

Gallagher suggested his former wife, Harmony Johnson, take up that role on an acting basis and without holding a competition, and the board approved Johnson’s appointment, says Kelly’s lawsuit.

Johnson’s appointment involved a large salary increase and “significant” new responsibilities within the authority and Gallagher did not make a formal disclosure of his interest in Johnson’s appointment for the purposes of the Societies Act or otherwise, it says. Kelly claims that in March this year the authority advertised the new vice-president position with a view to filling it permanently, but that the position has not yet been filled and Johnson remains in the role.

He says that at various times in April he raised concerns over Gallagher creating the new position that reported directly to him and filling that position with his former wife.

“Grand Chief Kelly raised these concerns in meetings and emails with the CEO and other officers of the authority,” says Kelly’s notice of civil claim.

The authority’s board of directors in late June directed Gallagher in writing to terminate Johnson, but he refused to comply with the direction and the board’s chairperson later advised the authority’s members that it had rescinded the directive with the board proceeding with a “comprehensive” investigation of the allegations, it says.

In July, council members voted to remove Kelly and the council’s deputy chairman, Allan Louis, from their positions without notice to Kelly and Louis and with the two men remaining as council members, says Kelly. The dismissal amounted to a repudiation of his contract and came after the campaign to expose the alleged problems at the authority, he says.

Gallagher was dismissed as CEO on Oct. 9 with the authority naming an acting CEO in his place, according to the lawsuit.

No response has yet been filed to the lawsuit, which contains allegations that have not been tested in court. In an email, the health authority said it would respond to Kelly’s claim of an alleged breach of contract in due course.