New, disturbing details are emerging about the salaries and spending habits of two men while they were at the helm of the Innu Development Limited Partnership (IDLP).
Paul Rich was the chief executive officer and Edgar Branton was the chief financial officer of the IDLP until June 2012 when they were both relieved of their duties.
Their firings were followed by calls for an investigation into how they were able to collect salaries, bonuses and other money, apparently far in excess of what they were entitled to.
In October 2013, the IDLP hired Newfoundland and Labrador's former auditor general, John Noseworthy, to have a look. His report — completed last month — confirmed the suspicions of many Innu and the IDLP itself that there were serious financial irregularities.
So serious, that Noseworthy has since forwarded his findings to the RCMP which will decide if criminal charges are warranted.
Noseworthy found that both Rich and Branton billed expenses to the IDLP with little, if any, authorization.
"The evidence available at IDLP indicates that (they) took full advantage of the lack of board oversight by taking excessive salaries, bonuses and incentives. As is so often the case, it seems as though Rich and Branton did what they did because they could!" stated Noseworthy, adding an exclamation point for emphasis.
His review revealed that from 2008 to 2012, Rich got more than $810,000 in salary and another $670,000 in bonuses and incentives, for a total of $1.5 million during those four years with the IDLP. He received $95,000 in salary for the month of December 2011 alone.
That's despite contracts that put his annual salary at about $88,000 from 2009-2011, and $125,000 for 2012.
"Paul Rich's compensation was significant and increasing," said Noseworthy. "IDLP officials could not provide any evidence of board authorization for the excessive salary and bonuses or the incentives.
"There was no adequate supporting documentation for many of the bonuses, overtime, incentives, and claims for travel. The common modus operandi for support for many of the amounts paid to Paul Rich was for Edgar Branton to either make a note to the effect 'as per Paul Rich' or the IDLP staff to indicate 'as per Edgar.' "
Other spending highlighted by Noseworthy included a claim for $3,700 for about 3,000 litres of fuel from Ultramar. He noted many of the purchases were for fuel in excess of what Rich's vehicle could take. Rich also claimed many restaurant charges without any detail about the meeting or who was there.
Some of Rich's more frequent haunts included Hotel North ($1,664.35) Maxwell's ($1,507.03), The Keg in Montreal ($725.17), Hong Kong Restaurant ($662.74) and St. Hubert ($530.31). He also claimed expenses for cigarettes, lotto tickets, and massage therapy at a spa.
Noseworthy also pointed out a conflict of interest with a $10,000 loan advance to Rich's brother Michel.
As for Branton, the IDLP's former CFO, only one unsigned employment contract was on file for him, citing a salary of $25,000.
Yet, from 2008-2012, he received more than $720,000 in pay.
"IDLP officials could not provide any evidence of board authorization for the excessive salary and bonuses. There was no adequate supporting documentation for many of the bonuses, overtime, vacation pay and claims for travel and other expenses. (Again), the common modus operandi for support for many of the amounts paid to Edgar Branton was for Edgar Branton to either make a note to the effect "as per Paul Rich" or the IDLP staff to indicate "as per Edgar."
Branton also claimed a total of $5,766.56 for restaurant charges, the vast majority of them incurred Friday and Saturday nights at the Red Rock Bar & Grill on Topsail Road in St. John's, formerly My Brother's Place.
Noseworthy made special note of two restaurant bills on the same day, one minute apart.
That happened on Sept. 10, 2010, when Branton claimed $61.53 at the Golden Phoenix restaurant on Kenmout Road in St. John's at 2:58 p.m.
"And at basically the same time, 2:57 p.m., he claimed a charge of $43.99 for Red Rock Bar & Grill. It is difficult to determine how Edgar Branton could be in two different places at the same time."
Noseworthy also found that Branton redeemed almost 50,000 RBC reward points to buy personal gift cards.
He also noted that signed, blank cheques were routinely sent to the St. John's IDLP office where Branton filled in particulars such as the payee and amount and then issued the cheque.
Criticism for IDLP
The report also rapped the IDLP itself for "not adhering to sound financial management practices with regards to the completion, filing and organization of adequate supporting documentation and accurate accounting records.
"The IDLP should consider the weaknesses identified in controls at IDLP with a view to taking corrective action to strengthen current practices," Noseworthy concluded.
CBC first reported on the big money being made by Rich and Branton two years ago. Neither have returned messages seeking comment.
It's unclear how long it will take the RCMP to decide if criminal charges should be laid.
The Innu Development Limited Partnership was formed in April 1998 through a memorandum of understanding between the Mushuau Innu First Nation and the Sheshatshiu First Nation. It's mandate is to pursue business ventures, partnerships, joint ventures and enterprises for the benefit of all Labrador Innu.