Documents suggest communications between Simailak's office and companies in which he held intere

Robert Stanbury, Nunavut's integrity commissioner, will review a new package of documents that could create more trouble for Baker Lake MLA David Simailak, the ex-minister of finance and economic development.

Hunter Tootoo, the chair of the legislative assembly's standing committtee on government operations, told Nunatsiaq News the committtee sent the documents to Stanbury at the end of last week.

The documents, consisting of letters, emails and copies of loan applications, reveal that the Nunavut Business Credit Corp. asked David Simailak nearly three years ago to approve two $1 million loans for companies in which he held an ownership interest, and did so when Simailak still served as minister of Economic Development and Transportation.

Last November, Simailak told the legislative assembly's operations committee that he had no knowledge of the two loans until Nov. 26, 2007, when the names of the two companies appeared on a list submitted to the operations committee during a public hearing that week.

Simailak also told MLAs that Stanbury advised him that the key issue for him was that he possess no knowledge of business deals between the government and the government departments and agencies for which he is responsible.

But the new documents, made public last week, suggest that Mel Orecklin, the NBCC's former CEO, communicated with Simailak about the two loans in May of 2005.

In a letter to Simailak, who was then minister of Economic Development and Transportation, dated May 24, 2005, Orecklin recommended that Simailak approve both loans "without reservation."

Under the NBCC Act, the responsible minister must approve all NBCC loans in amounts greater than $500,000.

Orecklin went on to say in his letter that Simailak is a director of Ilagiiktut but put shares into a blind trust in 2004. Orecklin wrote that this protected Simailak from being in a conflict of interest.

"For NBCC, these are the most secure loans available and I recommend both loans to you without reservation," Orecklin said in the letter. The public copies of the letter contain two paragraphs that are blacked out.

Orecklin also wrote that Ilagiiktut and Kangiqliniq are unrelated companies, even though Kangiqliniq's own loan application states the company is 100-per cent owned by Ilagiiktut.

The two companies, Ilagiiktut Ltd. and the Kangiqliniq Development Corp., were eventually approved for the two $1 million loans in July of 2005.

Sheila Fraser, the auditor general of Canada, found those loans violate the NBCC Act, which says two related companies may not borrow more than $1 million.

But Orecklin did not, apparently, see the need to do a due diligence review on the loans.

"Due diligence" is a process under which the loans would be scrutinized for their propriety and their potential risk.

"The material in the applications is more than adequate substantiation," Orecklin wrote to Verdun Noel, a senior analyst with the Department of Economic Development and Transportation who was also responsible for vetting loan applications.

Premier Paul Okalik shuffled Simailak out of the economic development portfolio into the finance department on June 6, 2005.

The next day, Orecklin sent the same letter to the new economic development minister, Peter Kilabuk, who signed the loans soon after.

In public hearings last week, Hunter Tootoo, the chair of the operations committee, asked Rosemary Keenainak, now the deputy minister of economic development and transportation, if the letter to Simailak raised any red flags within the department at that time.

"I don't recall the timeline on that one… I don't know if the minister was travelling. I don't know. But once the ministerial portfolio was changed, revised documentation was received by the department," Keenainak told the committee.

And on June 13, 2005, Kilabuk received a letter from Keenainak, then his department's acting deputy minister, urging him to approve the loans.

Kilabuk approved the two loans a week later, despite the absence of a due diligence report.

Tootoo asked Keenainak how she could recommend the loans when Orecklin told her that no due diligence review had been done.

"I guess we can do everything in hindsight," she replied, before telling the committee she assumed NBCC had performed proper due diligence. Keenainak said the department is now looking at ways to "better challenge" information

contained in future loan applications.

"So basically you're saying the department rubber-stamped the information that was sent over from NBCC?" Tootoo asked.

After being asked the same question repeatedly, Keenainak finally said: "I do acknowledge that the level of due diligence that is going to be required [under proposed changes to the NBCC] is not the level it was then."

The committee also probed emails that Warwick Wilkinson, the general manager of Piruqsaijit Ltd., sent to Simailak, and Simailak's former executive assistant, Chris Lalande, in February and March of 2006.

Piruqsaijit is a well-known Kivalliq company that provides management services to real estate corporations such as Kangiqliniq and Ilagiiktut.

Simailak owns a declared ownership interest in Piruqsaijit, whose listed telephone and fax numbers are identical to those listed for Kangiqliniq and Ilagiiktut.

In the emails, Wilkinson suggests to Simailak that he help the company arrange a meeting with Olayuk Akesuk, who was housing minister at the time.

Simailak also forwarded emails to to Lalande that were exchanged between Wilkinson and Levinia Brown, the minister responsible for the Petroleum Products Division.

Attached to those emails is a letter signed by the presidents of two companies, Qamanittuaq Development Corp. and Ilagiiktut, both of which Simailak had an interest in, seeking reimbursement for operation and maintenance expenses from the Nunavut Housing Corp.

That letter is also signed by the president of the Arviat Development Corp.

The emails, which date as far back as March 2004, also reveal Simailak had an interest in a numbered company operating as DC Cabs, which he did not appear to include in public disclosure forms he submitted as a cabinet minister.

The Qamanittuaq Development Corp. was revealed last November to have received a $1 million loan in July of 2007, when Simailak had returned to the economic development portfolio.

But Allan McDowell, then the acting CEO of the NBCC, told MLAs that although the loan was approved by NBCC's board, it had not been approved by Simailak, and appeared on the list "by mistake."

With files from Jim Bell