RCMP wraps up probe of Nunavut Business Credit Corp.

An RCMP commercial crime unit has finished a lengthy forensic investigation into business loans issued by the Nunavut Business Credit Corp. and will now meet with Crown prosecutors and officials with the Government of Nunavut’s Department of Finance to “determine the next course of action and-or outcome,” the RCMP said March 4.

David Simailak, the ex-MLA from Baker Lake, asked the RCMP to do the investigation in early November of 2007, when he still served as minister of finance and minister of economic development.

Simailak, whose career as a cabinet minister ended in disgrace the following year, when he resigned from cabinet and was fined $5,000 for breaching the Nunavut Integrity Act, was reeling at the time from a devastating series of revelations contained in report on the NBCC done by Sheila Fraser, the auditor general of Canada.

In December of 2007, a standing committee of MLAs unearthed documents showing the NBCC made two $1 million loans, in violation of territorial legislation, to two related Kivalliq-based property development firms, Ilagiiktut Ltd. and the Kangiqliniq Development Corp., in which Simailak held an interest.

When they received the money, the two companies claimed to be separate entities. But Fraser’s staff found one of those company’s was 100 per cent owned by the other, which amounts to a breach of a legal provision that says the NBCC may loan no more than $1 million to a single company.

MLAs also unearthed information that showed a third company in which Simailak held an interest, the Qamanittuaq Development Corp., was about to receive approval for another $1 million loan from NBCC. An NBCC official then told MLAs that Qamanittuaq’s name appeared on the list by mistake.

In their investigation, MLAs also found evidence of ethical problems not directly related to the NBCC, and turned their information over to Nunavut’s integrity commissioner, Robert Stanbury.

In September of 2008, Stanbury, found Simailak had committed four breaches of the Integrity Act for improper communications with business partners at a time when his business affairs were supposed to be managed in a blind trust, as well as improperly influencing a deputy minister to hire a friend, improperly arranging meetings between his business partners and housing corporation officials, and improperly holding a directorship in a company for many months after his appointment to cabinet.

The Simailak business associates involved in the improper communications included Warwick Wilkinson, the manager of Piruqaaijit Ltd., a management firm that helps run Ilagiiktut Ltd., the Kangiqliniq Development Corp., the Qamanittuaq Development Corp. and other property-holding firms in Nunavut that hold numerous leases with the GN for office space and staff housing.

In an appearance before MLAs in the fall of 2007, Fraser estimated that the NBCC may have given out at least $5 million in loans that can never be recovered, but she said the agency’s books were in such a serious state of disarray it was impossible to calculate the status of the NBCC’s loan portfolio.

Fraser issued a rare “denial of opinion” on the NBCC’s financial records, a designation reserved only for the worst of the worst.

Other embarrassing revelations also rocked the Government of Nunavut. One ex-CEO of the NBCC said GN officials hired him for his job even after he told them he wasn’t qualified for it.

And another employee, who served as acting CEO for a while, turned out to have been facing criminal charges for fraud and theft when the GN hired him.

After receiving the request for an investigation into the NBCC, Nunavut’s V division of the RCMP turned the matter over to the Ontario O division’s commercial crime section.

An RCMP statement issued March 4 said the Ontario investigators did a “thorough forensic accounting report… based on all of the documentation from the NBCC.”