Millions unaccounted for as Liard First Nation's new council looks to sort out finances

The new Chief of the Liard First Nation says it's been a "difficult transition" getting into office as the First Nation's financial records are in disarray.

George Morgan was elected chief of the Liard First Nation in June. He says the new council still doesn't know how much debt the First Nation has accumulated. 

• George Morgan elected chief of Liard First Nation

"It wasn't an easy transition because the outgoing council hasn't been forthcoming. We're having to do a lot of our own investigation. We're trying to deal with banks directly and anybody who had had any dealings with the Liard First Nation," he said. 

One example is a lawsuit which the First Nation recently lost to a bank. 

In 2013, the Whitehorse CIBC issued a $200,000 line of credit to the Liard First Nation. The bank sued, after $135,000 was never paid back. Last February, the bank won a default judgement against the First Nation after it failed to file a statement of defence.

Morgan says the new council will have to figure what happened to that money and why the line of credit was taken in the first place.

Morgan says at least $4 million unaccounted for

The Liard First Nation has been under third-party management since 2014. 

The measure diverts all federal funding provided through INAC and Health Canada to an Indigenous-owned company called Ganhada, which is tasked with administration and paying off debt.   

Other monies, such as revenues from the development corporation and rent from properties, were never taken out of the local chief and council's control.

Morgan says he has questions about that own source revenue. He says it amounts to just under $1 million a year. 

"That money is outside of Indian Affairs dollars. We're curious to see what has happened to about $4 million over three-and-a half years," he said.

We're curious to see what has happened to about $4 million over three-and-a half years.- George Morgan, Chief of Liard First Nation

Another longstanding mystery has been the status of a $500,000 lump-sum payment made by the Yukon government in 2016 for "community development," with no strings attached. 

Morgan says there's also been no sign of what happened to that money.

Former Liard First Nation chief Daniel Morris as well as the two councillors who remained on council at the time of the June elections, Cindy Porter and Louis Roy Dick, could not be reached for comment.

Public meetings promised

The Liard First Nation's new council has been meeting every Thursday since being sworn in on June 5. 

The new councillors for Watson Lake are Shirley Lutz, Alfred Chief, Dawn McDonald and Travis Stewart, who govern alongside representatives from Lower Post, B.C., who include deputy chief Fred Loots and councillors Harlan Schilling and Malcolm Groat.

Morgan says the First Nation is planning both an elders' meeting and a wider community meeting to discuss its finances. 

It's also meeting with INAC and requesting forensic audits covering many years.

Morgan says that so far, the third-party manager has not offered an estimate of how much debt the First Nation still has to pay, or how long it will take to pay back under the current management plan.

No plans yet for previous council's investigation report 

The new chief and council have also inherited a controversial file: an open letter signed by the previous chief and two councillors which alleges financial mismanagement by their predecessors.

• Controversial allegations of fraud, corruption divide Liard First Nation

Morgan says the new council has yet to decide how it will react to that document, which has provided no supporting evidence. 

The Liard First Nation is years behind on audits. In 2015, it was handed court papers by the federal government under Stephen Harper for failing to abide by the First Nations Financial Transparency Act.

The court action has since been abandoned, as the Act is no longer being enforced by the federal government. 

Indigenous and Northern Affairs Canada's Yukon office provided an email in response to this story, saying that "we can confirm that INAC Yukon regional officials have met with the new Liard First Nation Chief and Council and look forward to working with them."