When allegations of bribes forced Katie Rich to resign as chief of Davis Inlet, most Innu knew there was a Cree connection. But few people in the Cree world know what happened.
How did a Cree company find itself in the middle of a scandal that has divided Davis Inlet for the last year, forced a chief to resign and got her investigated by the Mounties?
November 13, 1996, was a big day in Davis Inlet. The big-wigs were flying in. The community was holding a great celebration.
Thirty years of waiting were at an end for the Innu community on the rocky Labrador coast. The Innu would be signing a historical agreement with the feds to relocate Davis Inlet, also known as Mushuau. The community would get $82 million to move from a remote island to the mainland where better community services were promised.
For the Innu, it was the biggest project in the history of the community, a chance to design a new home, a way to heal, to create jobs and gain valuable skills.
Outside businesses also saw it as a golden opportunity. And none more than Cree Construction. Projects were drying up in Northern Quebec and Cree Construction already had experience designing and relocating Cree communities. As a Native-owned company, it had a good chance of getting the contract.
Just to be sure, Steven Bearskin, president of Cree Construction, got on the plane to Mushuau along with Chief Billy Diamond to talk face-to-face with the Innu. With them went a high-powered team of business leaders from Quebec and Newfoundland who also wanted a piece of the action.
The group met with the Innu and presented their proposals. The Innu were invited to visit the Cree communities for themselves to see Cree Construction’s work. Everyone shook hands and went home.
It looked good for Cree Construction. Or so thought Steven Bearskin. Then, everything went wrong.
Rumours of bribe attempts started flying around the community. Katie Rich was forced to resign as chief of Mushuau. The RCMP launched a criminal investigation. The rumours about bribes even reached the ears of Indian Affairs Minister Ron Irwin.
Cree Construction never did get any contracts from Davis Inlet. Some residents still hold a grudge saying the company was too aggressive, too pushy and too greedy.
What went so horribly wrong? How could Cree Construction lose out on such a lucrative and needed contract, one that seemed tailor-made for its expertise? A contract this size doesn’t come along every day.
How could it slip through Cree Construction’s fingers? How many potential jobs did Crees lose?
It was a beautiful day when the agreement with the feds was signed last November. Everybody in this community of 550 was feeling good, and no wonder. Davis had experienced more than its share of hardship. After some kids were shown on the news sniffing gasoline, the community became a symbol for the struggle which Native people face in Canada. Now, for a change, something positive would be happening with the relocation.
Brad Morse, chief of staff to Minister Irwin, was at the ceremony in Davis Inlet.
“That’s a community that’s gone through hell,” he said. “You had the high of finally reaching an agreement, a monumental historical achievement, something the community worked on for 30 years. You have this great rush of joy. The whole community was just high as a kite. Just a wonderful day,” said Morse, who is now a professor of law at Ottawa University.
Morse adds, “Sometimes when we get that big a high you get hit and you feel like you’ve been punched in the stomach. It just knocks the wind right out of you.”
So it came to pass with Katie Rich. Hit hard by the rumours of a possible bribe, she resigned as chief just weeks after the signing ceremony. Close to a year later, Mushuau is still deeply divided over the resignation, the rumours and the trip that got the whole scandal started.
The $2,500 question
The rumours started when Rich cashed a cheque for $2,500 at the local store. The cheque was from the Waskaganish band. Rich got the cheque as an honorarium for going to Waskaganish to make a speech at the local Annual General Assembly. But many residents of Mushuau saw it as a possible bribe. Rich was accused of taking a payoff from the Crees for the contract.
The suspicions got worse when Cree Construction started going around saying it had the relocation contract in the bag. The Innu negotiators who were actually meeting with the feds say they couldn’t believe it. The $82 million wasn’t even officially announced. Also, the feds had made it clear that public tenders would be required for all the contracts. Companies would have to make a bid and the best bid would be chosen. No one was getting any favours or an inside track.
The Innu negotiators wanted to know if the chief had made any promises. “We didn’t know what was going on,” said Joseph Mark-Rich, one of the Innu negotiators. “People heard Cree Construction had won the whole contract and we as a committee never heard of that. That took us by surprise,” he said.
“We told her (Rich) to lay off, not to do anything.”
As Ron Irwin’s right-hand man, Brad Morse got drawn into the affair, too. He got a call one day from lawyer Bill Grodinsky, who has worked for the Crees. Grodinsky asked for an urgent meeting to discuss the contract in Davis Inlet.
Morse said he was “surprised” during the meeting when Grodinsky and Steven Bearskin started talking as if the contract was a sure thing for Cree Construction. They believed they wouldn’t even have to make a bid, he said. “They gave me a bit of an impression that it was all a done deal from their perspective, if you will.
“And I was clear with them that the agreement that was likely to be reached at that stage would require a bidding process, through public tender. I think that came to be a bit of a surprise to them.”
The Innu have another complaint about the trip by the Cree business group. The businessmen were seen by some Innu as acting too aggressively and not taking into account Innu concerns.
“They were very pushy,” said John Mark-Rich, who is also the associate project manager of the Mushuau Innu Relocation Corp. “They were trying to get the whole relocation project. We wanted to be involved in the relocation, not asking a company to come in and take over the whole thing. They wanted the whole thing.”
Mushuau Band Council member Katejun Rich agreed. “There are no bad feelings toward the Crees, but I’m not sure about Billy Diamond. There might be toward him. He was pushing very hard to get the contract. He was going full speed. He was going too fast for us. We want to make sure people from here get the benefits,” said Kajetan Rich, whose other hat is director-general of the Mushuau Innu Relocation Corp.
Family squabble
Steven Bearskin said the Cree business delegation was proposing a partnership with the Innu to do the relocation. He said nothing out of the ordinary happened during the visit, just business as usual. No one was being pushy, there was nothing inappropriate and definitely no bribes.
“I don’t feel it was aggressive at all. All we did was visit the community and we acted accordingly. We had a proposal to make to them and that’s what we did.”
Bearskin said the bribe allegations against Katie Rich were based on a “family squabble” within Mushuau.
“As chief, she didn’t hire a family member for a job and it turned out they started pointing fingers at her and basically accused her of being on the take, taking kickbacks, that type of thing,” said Bearskin.
“What it was of course is she had received a fee from one of the Cree communities as a keynote speaker at one of the general assemblies, and that’s how that rumour got started.”
One of the businessmen who went along with the Crees also denied knowing of any bribes. He said he can’t imagine how the Innu got a bad impression of the visit.
Bob Watts was in Mushuau representing Quebec engineering giant SNC-Lavalin, which also wanted a slice of the contract. Last spring, Watts was appointed Assistant Deputy Minister of Indian Affairs.
“There were certainly no bribes made to anyone in my presence,” Watts said.
“The thing I personally find kind of disturbing about the whole thing is it makes no sense why anyone would risk the idea of a trip to Waskaganish, which would have cost a couple of thousand dollars, for a pretty huge contract. If anyone was ever going to offer a bribe—I mean that’s not a bribe as far as I’m concerned. I can’t imagine how it would be in anybody’s mind.”
He also denied that anyone in his group was being pushy, saying he believed the presentation was “kind of low-key.”
Chief Diamond did not return several phone calls.
Everyone thought I was being bribed: Katie Rich
Katie Rich herself has moved on to bigger things since resigning. She was later elected as Grand Chief of the Innu Nation, the regional Innu government. In an interview, she insisted that the $2,500 was an honorarium and nothing else.
“Since the Crees gave honorariums to their special guests and of course I was given one, everyone thought I was being bribed. The same people who were talking about it are the ones who created companies and wanted a share of the contracts,” she said.
But Rich had some criticisms of the Cree visit, too: “People talk about why is everybody coming to see Davis. They didn’t bother with us a few years ago, and now that we have this money everybody wants to be our friend. Which I can understand because they’re just like vultures.”
Rich also had doubts about one of the businessmen who came with the Crees—a certain Tom Hickman. Hickman, a St. John’s construction tycoon, is well-known in Newfoundland after a marathon, seven-month trial on fraud charges which entered the history books as the longest trial ever at Newfoundland Supreme Court in the history of St. John’s. In 1993, Hickman was sentenced to 12 months in jail and fined $100,000. Another reason Rich and other Innu were concerned.
Bearskin said he knew all along that Tom Hickman had been in jail, but it didn’t bother him. Hickman had paid his debt to society. “He told me that story, of course,” said Bearskin. “Right up front, right at the very beginning.”
Did he have a problem with it? “No, not at all,” Bearskin replied. “I don’t hold anything against anybody after they’ve paid they debt to society. I told him even the Innu people go to jail on their principles.”
What really happened behind closed doors in Mushuau may never be known. RCMP Inspector Gus Macintosh, head of the St. John’s Commercial Crimes Unit, said the police investigation continues. He wouldn’t provide any details except to say that it concerns “possible irregularities.”
But what may have left a more lasting impression is the feeling of some Innu that a group of fellow Natives were too greedy, too pushy while guests in the community.
That feeling could hurt Cree Construction if it ever returns to make a bid. It didn’t get the whole contract as it had proposed. A first wave of small contracts for preliminary work has been given out and none of these went to Cree Construction either. The bigger contracts are still coming up, and Steven Bearskin said Cree Construction said he still wants to bid for some of them.
Band Councillor Kajetan Rich said Cree Construction is welcome to bid. But other Innu still have a bad taste in their mouths and say the Cree company won’t be considered. As the story and rumours spread in Indian Country and beyond, how many other contracts could be lost is uncertain.
