Pinehouse inquiry recommends against removing mayor and deputy mayor

Report finds fault with village and council, but says issues arose from ignorance and incompetence, not an intention to circumvent the law

Photo courtesy Tourism Saskatchewan.

A report from an inquiry into alleged irregularities in the Village of Pinehouse says the mayor and deputy mayor were not in compliance with regulations but should not be removed from office because the infractions “produced almost no consequences.”

The inquiry report, authored by former Justice William Vancise, found the village did not respond to freedom of information requests fast enough and was in violation of some elements of the Northern Municipalities Act. The report, however, said this was unintentional.

“There is uncontradicted evidence that violations … were not intentional and were the result of ignorance of the relevant statutory provisions,” Vancise wrote.

“There is also evidence the violations were remedied when the contraventions were brought to the attention of the mayor, deputy mayor and village council. It has not been demonstrated that the mayor or deputy mayor engaged in an abuse of their offices or that they violated the law in an attempt to further their own interest.”

Vancise issued a set of recommendations including that the province consider amendments to the information and protection of privacy act and to the northern municipal act. He also recommended that the minister extend a special financial audit, ensure all northern municipalities are fully informed of their responsibilities and obligations and that the local council assist and support the local administrator to achieve requirements.

He wrote that the Northern Village of Pinehouse must ensure all recommendations of the Information and Privacy Commissioner are addressed, that all financial activities are properly accounted for, that administrative processes and internal controls are improved and brought into compliance and to resolve other non-compliance issues he found in his inquiry.

“Ignorance of the law is no excuse for non-compliance, but in this instance the motivation was the betterment of (the village) including addressing the shortage of housing, fostering economic development, supporting the employment of village residents, promoting education and tackling community problems caused by an increase in crystal meth addiction,” Vancise wrote.

In a press release, Government Relations Minister Lori Carr thanked Vanscise and his team.

“This report has helped provide considerable clarity into the complex situation within the village and the many challenges it faces,” she said.

“Mr. Vancise recommends that members of council should not be removed from office. The Government of Saskatchewan accepts this recommendation.”

Carr said officials from her ministry will arrange for temporary support staff to provide assistance to the village council for up to six months. They are part of a series of actions the community must take to ensure it is meeting its obligations.

“This report is not an exoneration, nor will the province accept a ‘business as usual’ approach from the village,” Carr said.

“Clearly there is more work to do within the community.”

Vancise’s inquiry was commissioned following the report of Justice Neil Robertson. His inspection arose from citations from the provincial privacy commissioner for failing to properly respond to freedom of information requests. Robertson’s report was released publicly for the first time as an appendix to the Vancise report. Robertson recommended that the mayor and deputy mayor be removed. He also agreed with the information commissioner’s findings that the village’s inability to comply with legislation was intentional.

According to Vancise, the inspection and inquiry were called when the village failed to respond in a timely fashion “or at all” to requests for information. In addition to reviewing documents from the information commissioner, Vancise interviewed the mayor, deputy mayor, information and privacy commissioner and others involved in the saga.

The reports of the privacy commissioner came out of a series of access to information requests submitted by a group led by Saskatoon’s D’arcy Hande, Vancise wrote.

Hande and a group were concerned about the village’s relationship with companies such as Cameco and AREVA, which later became Orano. Those requests morphed from requesting information relating to correspondence with nuclear energy organizations to requesting information on the governance and financial issues of the village, Vancise said.

Vancise wrote that in June of 2016, Hande and “a group frustrated with the village’s delay in responding to requests endeavoured to ‘blitz’ the village with several access to information requests sent in quick succession.”

Eight requests were submitted between January and December of 2016, seeking a wide range of information such as salaries of council members, several years of financial statements and details of transactions “that potentially raised concerns of conflicts of interest.” The village received 24 requests between 2013 and 2019.

The subsequent inspection report, and a forensic audit, turned up other concerns with the village beyond its failure to comply with timelines.

It found, amongst other things, that the mayor and deputy mayor were being paid as employees of the village and its development corporations while serving on council, something forbidden in the Northern Municipalities Act.

Concerns were also raised surrounding a housing program that issued forgivable loans to community members. Some of the members who received loans were related to the mayor, and council minutes did not indicate that a conflict of interest declaration was made. Additionally, bylaws such as one setting out councillor remuneration, and other required operational bylaws, did not exist.

While several of those details were learned in Robertson’s inspection report, Vancise was tasked with hearing from those implicated — such as mayor Mike Natomagan —as to how they came about and where the blame should be placed.

According to Natomagan, the village’s development corporations were not set up with the Northern Municipalities Act in mind, and he wasn’t told he couldn’t serve on council while also working for the development corporations.

Vancise also learned that Natomagan wasn’t hired because he was mayor, but rather because of his qualifications, connections and experience.

When Natomagan was alerted to the issue regarding his role with the development corporation, he stopped taking a salary so as to not be in conflict with the legislation.

Vancise also spoke to Martine Smith, the village’s administrator. Natomagan put her in charge of responding to access to information requests. She was also involved in the housing program, tax enforcement, administration, council meetings and request.

Vancise wrote that the village “did not treat access to information requests as a priority” initially and that Smith was “overwhelmed” by the number of requests.

“In the inspection report, Robertson was highly critical of Ms. Smith,” Vancise wrote.

“In my opinion, the difficulties she faced in responding to access to information requests in a timely manner were not due to a deliberate attempt to obstruct the process or to a lack of competence. Rather, they were caused by mayor and council overloading her with a number of different tasks.”

Smith and Natomagan also commented on the conflict of interest concerns. They said that councillors dealt with conflicts of interest by excusing themselves from meetings when they occurred. They acknowledged, though, that no formal declaration was made and that the councillors excusing themselves because of potential conflicts was not marked in the meeting minutes.

Since the province requested operational bylaws and since the conflict of interest concerns was raised, the village has worked to pass the required bylaws and has changed how it handles conflict of interest. Additional staff members have also been hired to assist Smith.

Vancise also interviewed Hande. He described him as a “longtime opponent of nuclear power as sustainable energy.”

He also said Hande explained that he and others in his group “were going to ensure a number of questions would be put forward to make a political point that there were questions not being answered.”

Vancise took issue with Hande’s approach.

 “Mr. Hande’s evidence that he, along with other individuals, engaged in a concerted effort to blitz  the village with information requests is very concerning to me, as this amounts to using the … process in a coordinated action to overwhelm a small northern community’s administration” Vancise wrote.

“While the use of the access to information provisions … cannot be condoned, the access to information requests did expose some governance deficiencies within the village.” He said the campaign amounted to inappropriate use of a provincial office to further a personal agenda.

Still, he found, Hande’s actions do not excuse the village from following the legislation.

Recently, he said, the village has taken steps to improve its processes and has been responding to the access to information requests properly.

When it comes to conflicts of interest, Vancise found that the practice of the council did not comply with the legislation, “but there was no evidence that anyone benefited as a result.” He said steps have been taken to improve the process.

He also found that the mortgages were voted on by council and administered by a third party, eliminating concerns of conflict of interest.

As for the issue of the mayor and deputy mayor taking employee salaries while sitting on council, Vancise again found it was unintentional. He said steps have been taken to bring the village into compliance.

While he disagreed with some of Robertson’s findings, he also agreed with some of his statements.

Like Vancise, Robertson acknowledged that some of the issues arise from the community’s size and remoteness and could also be present elsewhere.

“The issues revealed in this inspection may and likely do occur in other municipalities,” Robertson wrote.

“I encourage the minister to consider steps to address and prevent similar misgovernment in other municipalities. It is hoped that this inspection will have shed some light on the Northern Village of Pinehouse and may serve to help other municipalities to avoid similar problems.”

As for the NDP, they said the reports “raised more questions” than they answered, in part because Robertson and Vancise came to different conclusions.

The NDP called for “immediate action” on the recommendations.

“Today we’re calling on the Minister of Government Relations to act immediately on the five recommendations from the September 2019 inspection. In particular, a full forensic compliance review of expenses is essential, including for previous years. Of the expenses examined, only eight per cent were found to be fully compliant with the law,” the party wrote in a press release. They also filed a freedom of information request of their own.

“We are currently awaiting the results of an FOI request to the Northern Village of Pinehouse seeking records of any undeclared political donations made by the Village or its subsidiaries to political entities, including provincial constituency associations. Because of the slow pace of the response, we have asked the Freedom of Information Commissioner to review the request and would urge the Village to comply promptly.”

More reaction and follow-up to come.