The federal public security minister says criminal charges could be laid in the policing scandal that has surfaced in the Mohawk territory of Kanesatake near Montreal.

Stockwell Day made the comment Tuesday as he confirmed his department had ordered a report about the territory's policing expenditures, a confidential document that was obtained by Radio-Canada/CBC News.

James Gabriel, while still Kanesatake's grand chief, alleged that the reserve police force had been corrupted by organized crime and received government money to form a second force.
(CBC)

The preliminary report alleges that Ottawa and Quebec spent about $34 million between 2003 and 2005 to provide security on the reserve, which has fewer than 1,300 residents.

The report alleges a misuse of government funds given to the band council led by then grand chief James Gabriel in January 2004 to recruit 67 officers to form a second police force.

Gabriel got backing for the force by arguing that organized crime was taking control of his community while the Kanesatake police turned a blind eye — but the federal report questioned much of the spending, on items such as year-long hotel room rentals and gun silencers.

Day acknowledged that the money would be hard to recover, but promised the government wouldn't let the matter drop.

"We're very concerned about the spending irregularities … very concerned about the amount of money that we're talking about, and we're going to follow this up. We don't believe in this kind of waste going unattended," said the public security minister.

Current Kanesatake chief chastises Ottawa

Jacques Chagnon, Quebec's minister of public security during the time in question, said the Liberal governments of Jean Chrétien and Paul Martin were at least partially to blame.

"Well, we could look at how the band council reacted and how it spent its money, but, first of all, they were surrounded by people coming from the Department of Indian Affairs," he said.

The current grand chief of Kanesatake, Steven Bonspille, also lashed out at the Liberals for allowing unfettered security spending by the band council that preceded him.

"It's incredible, the amount of money the police force spent arming itself! And the Canadian government accepted that, gave money for that?" Bonspille told Radio-Canada, the CBC's French-language network, on Tuesday.

Gabriel, who was in charge of Kanesatake's band council at the time, has rejected allegations of misspending.

He insisted that every expense documented in the report was approved by federal and provincial officials.