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APTN called me up yesterday. A couple of reporters were down with the flu and I had the chance to help out with a story about Attawapiskat at my old newsroom. Essentially I was assigned to cover how the story was playing out on Parliament Hill. Well by now we all know that depending on your politics, either Attawapiskat is the master of its own misery due to bad book-keeping or it’s underfunded.

I am not going to pretend that I know a lot about Attawapiskat, I’ve never been there. I have not spoken with people who live there. But now that it’s under Third Party Management I want to share the story of another community I covered back in 2003 that was also under Third Party Management. My experience there was eye-opening and left me with the conclusion that Third Party Management rarely solves problems.

Gull Bay is a small Ojibwa community, about 200 miles North of Thunder Bay in Ontario. It looks incredibly similar to Attiwapiskat, based on what I’ve seen of that community on TV. Dirt roads, small houses some old-fashioned 2-room cabins with wood stoves and no running water. There are also newer homes, with aluminum siding, small kitchens and simple but modern bathrooms that you might find in any small town. A lot of kids and dogs.

Like Attiwapiskat , Gull Bay had both debt and a housing problem. The two are connected, and the debt issue arose from the housing issues.

Long before I arrived there was a housing shortage in Gull Bay. Some people lived in homes that probably should have been condemned. These are the old wood stove heated shacks. They are warm, well-built, two-room cabins, but as the chief pointed out to me they are a fire trap, not to mention some have no bathrooms or taps. Every year Indian Affairs allotted money to build new homes, maybe 4 or 5 a year, but it wasn’t keeping pace with the need. Plus there was a problem with the construction of homes being built.

Some of the homes were not built properly for the north – cold winters, a clay base in the ground. There was also an over-crowding issue. It wasn’t unusual to see four or five families crowded into a home. Each family chooses a bedroom, they put mattresses on the floor and they all – 2 adults and 2-4 children crowd into a bedroom. They share the kitchen and bathroom with other families. So you can have 15-20 people living in a house, most of them kids. There is the wear and tear you get on the home from so many children living in there. Worse is what the moisture from running showers and baths to serve that many people, cook for that many people, does to a home. Just the moisture that comes off all these the human bodies can be measured in buckets. It all contributes to mould. So you have two factors at play – poor construction and overcrowding.

It’s not simple to point a finger to who is at fault for the poor construction. Indian Affairs allots a budget, the chief comes up with a housing plan, Indian Affairs studies and approves it before they release the money. Contracts are tendered to construction companies, homes are built. A number of eyes saw the plan, but apparently no one had the expertise to understand that these homes would not survive a nothern winter for more than a season or two, because they were not properly insolated for a clay-based earth. By the time I arrived there in 2003, there was a new chief who had no idea what had happened in the past, and everyone seemed so exhausted from finger-pointing that they had put it behind them. Plus there were new crises to deal with.

The homes I saw in 2003 had black mould running halfway up the walls. It was so thick I was coughing and hacking after 5 minutes in the room. I would later describe to people that, if I wanted to, I could have scraped the mould off the wall and made a mould-ball much as a child scraping up snow makes a snowball. The residents had been told to wash it off with bleach, but it kept coming back.

By this time the community was also under 3rd Party Management for debt it incurred because of housing. Nine years earlier, the community tried to solve its housing crisis by trying out a new program offered though Indian Affairs. They tried to introduce private housing. Getting a private home built on reserve is tricky, because reserve land is owned collectively and is indivisible. Banks don’t like to loan money when they can’t repossess. So the new program saw Indian Affairs guarantee loans to the bank so that families could build homes. It’s a great idea for a program. It has provided a solution to many other communities. But it went terribly wrong in Gull Bay.

Around 1994, five families build five homes under the program. Then they didn’t pay the mortgages. Some said because the homes weren’t well built and started to mould. Some said they were just dead-beats. I never got to the bottom of the reason. Perhaps both stories had truth, which is often the case. At this point it was just another item everyone was tired of finger-pointing over. (All I can say is that when I saw the homes, 9 years later they were abandoned and mouldy. )

In 1994, the cost of the unpaid mortgages was $2 million, the debt went to Indian Affairs (the loan  guarantor) who demanded their money back. The whole community was held responsible, since the individuals who owned the houses couldn’t or wouldn’t pay. Gull Bay was put under Third Party Management until the debt could be paid off.

When a Third Party Manager comes in they charge an average of $150,000 a year to take over the books. They still have to maintain core programs. To pay their own salaries and to try and get a surplus to pay off the debt they look for places to trim fat. If a band does not have independent income that means laying-off band employees, creating further unemployment in a community that is already under-employed. I spoke to a few of these people that went from viable income earners to welfare recipients over-night. They were mad as hell. After all none of this was their doing.Plus there are social consequences that come with an increase in unemployment –  depression, pills and hopelessness. I was told a number of people in the community had become hooked on precription drugs.  In a remote community  with a small economy, lay-offs also create a mini-recession. People who were independently employed in small micro-businesses told me they were struggling to keep ther heads above water since the lay-offs.

At this point the Chief and Council were really figure heads. Sure there is still day-to-day administration to run, but without access to the purse strings they were unable to respond to the biggest demands now coming from the community. From what I gathered the three major concerns were jobs, homes and teachers. The community very quickly turns on its chief under such circumstances. 

The Third Party Manager will also look for places they can save money in non-essentials, maybe one less teacher, cutting back on free pencils. Where ever they can find a dime. Indian Affairs ends up paying itself back, with its own money. (Which means tax payer dollars, to pay back tax payer dollars.)

Judging by what I found in Gull Bay in 2003, the Third Party Managers had not found many dimes to cut. As I said, by that time Gull Bay had been under Third Party Management for 9 years. The houses were more moldy, the school was falling apart, and the communities debt had actually doubled. They originally owed $2 million in 1994, now they owed $4.2 million. When I asked why, Indian Affairs told me it was due to interest on the debt. I never got to the bottom of just what this interest rate was. But there were clearly some other poor choices that had been made by Indian Affairs and the Third Party Manager.

For example, Indian Affairs directed the Third Party Manager to buy  6 second-hand trailers at a cost of $120,000 for some families who had to move out of their homes due to the mould problem. When the chief saw the quality of the trailers he hit the roof, saying they were in terrible condition. He called in Health Canada.  I was there when Health Canada inspectors came to look at the trailers. They were old, drafty, run down things that looked like they had once been used for logging. Health Canada declared they were “unfit for human habitation.” That accounted for an extra $120,000 out of the bands budget. I did not have access to years of books kept by the Third Party Managers (and neither did the chief and band council by the way). So I was left to wonder just how many more little mistakes like this had been made and added to the band’s debt.

The Third Party Manager would not speak to me directly. (They rarely do) But the chief shared a letter with me from the 3rd Party Manager – at the time it was Ernst and Young – asking Indian Affairs if they could forgive some of the debt, as by their reckoning it would now take 30-40 years to pay off and it would be saddling children with mistakes of the past. Indian Affairs had determined the debt was collectable and would not change their minds. Ernst and Young did not renew their contract with Indian Affairs to manage the accounts. A new Third Party manager was called in.

So I leave you with these thoughts. If outside professionals manage a community and they double that community’s debt over 9 years, perhaps underfunding is a real issue. Or perhaps we should not so easily believe that Third Party Management  is a solution to all that ails communities in trouble. 

I haven’t been back to Gull Bay since 2003. They have a new chief, according to Indian Affairs they have now moved to co-management, that should give them some control over their financial affairs. But  after seeing this video posted on YOUtube last year  little else seems to have changed in the years since I visited. I do not know what their current debt is.

Back to Attawapiskat, I don’t know what’s up with their books. I am not an accountant. I don’t pretend I have the skills to solve debt problems or properly manage a multi-million dollar budget for a small town. But I leave you with this observation: the former Auditor General, Sheila Fraser said years ago said that the Third Party Management system did not get value for money, and based on what I saw I agree with her, and I have little faith that this is a solution for the troubles in Attawapiskat.