Former finance minister must tender apology for omission

MLAs should reprimand Baker Lake MLA David Simailak for failing to disclose an ownership interest in a Rankin Inlet real estate firm in contravention of the Integrity Act, Robert Stanbury, Nunavut's Integrity Commissioner, recommended in a report issued Jan. 3.

Stanbury also recommended that Simailak make a statement in the house "apologizing to his peers, his constituents and all Nunavummiut" within 10 sitting days after the start of the next assembly session.

Levi Barnabas, the MLA for Quttiktuq and a member of the legislative assembly's operations committee, said he and other MLAs will likely wait for the report to be tabled in the house before they comment on it. The assembly is to resume Feb. 19 in Iqaluit.

"At this time I don't think I should comment on the report," Barnabas said. "There are issues in it I need to discuss with my colleagues."

In an interview, Stanbury pointed out that Simailak's breach is "procedural, not substantive" – the same kind of breach made in 2003 by South Baffin MLA Olayuk Akesuk, who failed to disclose a $10,000 back-rent debt he owed to the Municipality of Cape Dorset.

And in his report, Stanbury said he accepts that Simailak's failure to disclose was "inadvertent and not deliberate." That's because Simailak told him he listed the name of a building owned by the real estate firm, but did not the name the company.

"Nevertheless, it left incomplete and inaccurate the record on which the public is entitled to rely," Stanbury said.

Under the Integrity Act, MLAs may either accept or reject all of Stanbury's recommendations, but they may not change them or inquire further into the matter.

Stanbury found Simailak violated the disclosure section of the act four times: in 2004, 2005, 2006, and 2007, when he failed to disclose an ownership interest in Kangiqliniq Developments Ltd. of Rankin Inlet.

The Kangiqliniq firm is one of two related companies that in July of 2005 received $2 million in loans from the Nunavut Business Credit Corp., in contravention of territorial law.

Kangiqliniq is wholly owned by Ilagiiktut Ltd., another Rankin Inlet firm that started more than 20 years ago with the help of a no-bid lease issued by the Government of the Northwest Territories.

Ilagiiktut now holds five separate leases with the Government of Nunavut for office space in Rankin Inlet, Coral Harbour and Repulse Bay. Through those leases, Ilagiiktut receives nearly $800,000 a year in public money.

The Kangiqliniq firm holds two leases in Rankin Inlet with the Nunavut government: a dental office worth $58,350 a year, and an office space lease worth $79,380 per year.

These two companies hit the news last November after a chain of events that began with the release of Auditor General Sheila Fraser's report on the Nunavut Business Credit Corp.

In her report, Fraser said two related companies, which she did not name, each received a $1 million loan from the NBCC, violating a requirement of the NBCC Act that says a single company may not borrow more than $1 million.

After looking at a list of all firms that received NBCC loans, MLAs on the legislative assembly's operations committee confirmed Nov. 29 that the two companies are Ilagiiktut and Kangiqliniq.

Simailak also confirmed this on Nov. 29, at an afternoon appearance before the operations committee.

In a statement, he told MLAs he owns interests in Ilagiiktut and Kangliqliniq, as well as in a third company, Qamanittuaq Development Corp., whose name also appeared on NBCC's list as having been approved for a $1 million loan by NBCC's board in July 2007.

But he said that when he first disclosed his business interests after the 2004 election, he put them into a blind trust where they are managed by a trustee without his knowledge.

Simailak told MLAs he didn't know about any of those loans until the list became a public document on Nov. 26.

For that reason, Stanbury first found that Simailak did not violate the Integrity Act, since in 2005 he had no knowledge of the two $1 million loan applications.

But soon after, a CBC radio news report revealed that Simailak's disclosure statements did not list an interest in Kangiqliniq.

Stanbury then decided, on Dec. 19, to do his own review of Simailak's situation. Simailak had already resigned from cabinet, as of Dec. 11.

As for the overall integrity of Nunavut's government, Stanbury said that despite the procedural lapses made by Akesuk and Simailak, the people have Nunavut "have a government to be proud of."

"I don't think there has ever been any serious suggestion of a misuse of public funds," Stanbury said.

He also pointed out that the Nunavut government's ethics protection system is intended to be flexible, and contains fewer rules than those in most other jurisdictions.

For example, it allows regular MLAs to continue operating businesses even after their election to office. It also allows the immediate family members of cabinet ministers to hold territorial government jobs.

That's because, within Nunavut's tiny population, it's inevitable that most elected officials or their relatives will have prior interests in businesses or organizations that deal directly with government.

So one of the key principles is full public disclosure, so that the private affairs of elected officials are made transparent.

"It's a value-based system, not a rules-based system," ­Stanbury said.