Forensic auditor hails Frog Lake First Nation man for his efforts to obtain financial documents from band

A First Nations band member from Alberta has won a landmark court ruling that reaffirms the right of individual band members to access financial documents regarding their community’s money. Hans McCarthy partnered with the Canadian Taxpayers Federation (CTF) to launch a court application against the Federal government “to compel Ottawa to release band council resolutions” regarding the band’s trust fund. McCarthy says he’s been trying for years to find out how millions of dollars were being allocated.  He believes the band council resolutions may shed light on whether certain projects and expenditures could be accounted for. McCarthy filed a federal access to information request, a law that allows citizens, media and businesses to obtain government records that aren’t provided online.  He says he was stymied when Indigenous Services Canada (ISC) refused his request for Frog Lake’s band council resolutions.  A judge reviewing the decision sided with McCarthy and ordered the information be released with limited redactions dealing with individual band members salaries. “The federal government and First Nations leaders have a responsibility to be transparent about what is happening with our people’s money,” McCarthy says. David Oswald, founder of Forensic Restitution, who became involved in 2021 when a member asked him to go over the posted finances that were available on the Indigenous Services Canada (ISC) website. He says what McCarthy has accomplished can’t be overstated. “I think it should be something that should be celebrated and that he should be looked at as being a hero because that’s what he is, in my eyes, that’s what he is.” In his court application, McCarthy successfully argued that Ottawa has a duty to disclose these records to band members who request them and that both the federal government and First Nation leaders must be transparent about band trust funds. The judge hearing the case says Indigenous Services Canada wasn’t authorized to “refuse his requests” under the Access to Information Act.  The Federal Court has now ordered Indigenous Services Canada to provide the full documents to McCarthy within 30 days, subject only to limited redactions regarding the exact compensation paid to individual members of chief and council. “This court victory is important because it will help my community, but it will also help all bands across the country fighting for more financial transparency.” According to a joint news release from McCarthy and the CTF, a band trust fund, which held revenues from natural resources located on band lands, totaled about $102 million in 2013, according to documents released through the First Nations Financial Transparency Act (FNFTA) Less than $9 million remained by 2024. Band members have had limited capacity to access financial records, and Oswald says they’re often forced to go to court, as McCarthy has done, and pay out of pocket. “…band members are actually fighting the band, fighting with their own money with the band,” says Oswald. “They’ve got to fund both sides of the equation because the band council-the councilors aren’t using their own money to fight these cases. They’re using the band’s money to fight these cases. “So even in this latest one where Hans won, Hans had to cover his own legal costs. He then had to cover the legal costs of the First Nation through his portion…then when he went and got costs awarded to him, the First Nation that he’s part of was paying him his costs.”  Gage Haubrich, with the CTF, who assisted McCarthy with his court case, says band members shouldn’t have to go to court every time they want to see how their community’s money is being spent. Oswald acknowledges the FNFTA itself has some flaws but that it’s a place to start. The FNFTA has been law since 2013 but there was significant pushback from First Nations leaders to the law introduced under former prime minister Stephen Harper’s Conservative government.  It was deemed racist by many with its implications that First Nations needed oversight on their spending.  While it remains on the books, former prime minister Justin Trudeau said he wouldn’t enforce the law when elected in 2015.  APTN News reached out to ISC to ask whether it would be enforcing the act under Prime Minister Mark Carney’s government.  According to a statement provided to APTN, that’s not going to happen. “The federal government “ceased enacting penalties under the First Nations Financial Transparency Act in 2015 to uphold commitments to reconciliation and respond to First Nations’ ongoing concerns,” says ISC spokesperson Eric Head. His statement says through extensive engagements with First Nations between 2017 and 2023, it “clearly heard that the First Nations Financial Transparency Act does not respect the right to self-determination, including the primary accountability of First Nations governments to their citizens, and should be repealed.” It also says “the First Nations Financial Management Board has developed a standard for financial administration laws that sets out good financial management practices for First Nation Councils and staff, that often exceed those in the First Nations Financial Transparency Act, as well as measures to ensure transparency to First Nation members.” According to ISC, more than 300 First Nations have adopted financial administration laws consistent with the Financial Management Board’s standard. But Oswald says that doesn’t mean anything, if chiefs and councils don’t adhere to that standard. “There’s no downside for the chiefs and councils in Canada at the moment… [people should] back Hans up and to show the rest of the First Nations that what he did was the right thing,” he says.  In an interview with APTN, McCarthy acknowledges he’s faced a lot of criticism in his fight for transparency but he says the tide is changing. “I was getting threats of violence towards me-and even home invasions. People were threatening me. But a majority of people in my community and across Canada and even the United States are supporting me,” McCarthy says. APTN has reached out to Frog Lake Chief Greg Desjarlais for comment but we have not heard back. In a statement posted to the community’s Facebook page, the chief and council say they “remain committed to upholding transparency, good governance and accountability, especially in financial matters.” Oswald says “the amount of bad mouthing of Hans within the First Nations is incredible. And the misinformation that has been put out there about the man is absolutely incredible.” “He has stood up to tremendous adversity, with both personal attacks and attacks on his  integrity and everything else that he’s had to endure over the past number of years. Just for trying to get the  right information through and information that belongs with the people to the people.. And that shouldn’t be that way at all. “If I could have a wish this Christmas, it would be headline news that Hans McCarthy after all the adversity- is an absolute hero,” Oswald says. Continue Reading