Three directors of an aboriginal housing association in Edmonton wrote cheques to themselves with public money worth nearly $700,000, court records suggest.

The directors continued to take money from the association's operating account even as tenants had their utilities cut off and were forced to cope with backed-up sewers.

Court records contain dozens of cheques for "travel" drawn from the account of the Amisk Housing Association by prominent native leader Mel Buffalo of Hobbema, along with fellow directors Lawrence Willier and Geordy Saulteaux.

Only Saulteaux was willing to talk briefly to CBC. He was asked if he thought taking the money was illegal.

"Yeah it was ill.... I don't know. That I don't know," Saulteaux told the CBC.

None of the allegations contained in the court documents has been proven in court.

The documents are part of a legal action by the Canada Mortgage and Housing Corp. aimed at forcing the Amisk Housing Association into receivership. It succeeded and the association has been run by a trustee appointed by the court since February 2010.

Gas cut off

Amisk Housing Association tenant Kelly LaRiviere told CBC he used his electric stove to heat his duplex after his gas was cut off for two days. When he phoned the association to find out what was going on, he was told there was a minor "chequing problem" and the gas would be restored shortly.

"But isn't this a public company that is supposed to be sponsored by the government?" LaRiviere remembers asking. "What is happening?"

LaRiviere said he had heard rumours money had gone missing from Amisk.

"But you wouldn't think hundreds of thousands. Maybe tens of thousands. No way would I have thought hundreds of thousands."

Amisk, founded in 1989, owns and manages nine housing projects totalling 96 units for low-income aboriginals in Edmonton. It was funded in part by a $5.2-million grant from the Canada Mortgage and Housing Corp., which continues to subsidize its operation.

The court documents suggest financial irregularities were first confirmed in 2006 when an audit showed staff and directors owed Amisk more than $86,000.

"The funds never should have been taken from the Amisk Housing Association account in the first place," directors and staff were told in an Aug. 19, 2005, letter from Jackie Idah of Alberta Aboriginal Housing.

"And we believe based on our prior discussions that the association was fully aware of that, and proceeded to do it anyway," the letter said. "This is a serious breach of the operating agreement."

Financial irregularities

Despite this, in 2007, auditors told Amisk general manager Cec Jones and treasurer Geordy Saulteaux that "certain directors" were using Amisk's bank account as an "overdraft facility."

The "certain directors" were Buffalo, Willier and Saulteaux who wrote cheques totalling more than $226,000, which were recorded as "travel expense advances." The three were the only directors who wrote cheques.

Even after they were told to stop taking money, the three directors continued to write cheques over the next 18 months totalling more than $400,000. There is no evidence in the court documents that any of this money was repaid.

At one point, the association failed to pay electric and water bills of nearly $75,000 and natural gas bills of nearly $35,000. They also failed to deal with a plugged sewer line that repeatedly backed up. Utilities to some units were cut off.

CBC News has learned that in the six months prior to the utilities crisis, the three directors cashed cheques totalling more than $140,000.

The cheques were not just issued for so-called travel expenses. Court documents indicate that in May 2008, the association paid $3,000 to an individual as a settlement for a car accident involving a director.

CMHC takes over

Finally, CMHC asked Amisk to allow a receiver to take over management of the association. The directors agreed, but then failed to provide written consent by missing several deadlines.

Meanwhile, one director asked the association's manager to transfer $11,000 from Amisk's security deposit account into its operating account to cover three cheques the three directors had written. The manager refused.

It was later revealed that the board members wrote three post-dated cheques worth $11,000 and got cash advances on them from a Money Mart.

In a Sept. 9, 2008, letter to CMHC, a defiant Willier brushed off CMHC's concerns about financial irregularities. Instead, he accused bureaucrats of creating the financial problem.

"This fiduciary responsibility is being put in our face why?" Willier wrote. "This issue is used by CMHC to control and inhibit Amisk operations by federal civil servants. They appear to have nothing to do."

In a July 28, 2009, letter to Amisk, CMHC regional manager Trevor Gloyn said the so-called travel advances taken by the three directors "were unsupported, not authorized by CMHC and constituted a clear misuse of the [money]."

In a release issued Friday, CMHC spokesman Charles Sauriol said the corporation has a strong accountability framework built into its operating agreements with housing associations.

He said that as soon as the problems at Amisk were discovered, CMHC acted quickly to take over the association and provide proper management.

"CMHC takes these matters very seriously, including the recovery of funds," Sauriol said. "That is why we have referred this to the police."

Interest-free loan

Court documents filed in a separate receivership case also indicate Buffalo, Willier and Saulteaux were involved in questionable financial dealings with another non-profit aboriginal housing association of which they were directors.

The documents say the Umisk Housing Association gave the three directors, and Amisk manager Cec Jones, a two-year, interest-free loan of nearly $116,000.

The money was supposed to buy land to build a housing complex in Willier's hometown of Kinuso, about 300 kilometres northwest of Edmonton. The complex was never built.

During receivership proceedings, Willier admitted under oath he had the money. The two housing associations are still in receivership.