Ted Tsetta

Ted Tsetta was removed as chief of N'Dilo by the Yellowknives Dene First Nation in 2012. This week, a federal judge quashed that decision and said the allegations of corruption and mismanagement that Tsetta raised are credible and should be investigated. (CBC)

A federal court judge says allegations of corruption and mismanagement in the Yellowknives Dene First Nation in the Northwest Territories should be investigated.

Judge Yves de Montigny ruled this week that the band was wrong in firing Ted Tsetta for raising a red flag about alleged wrongdoings.

The First Nation, one of five main Dene groups in the N.W.T, includes the communities of N’Dilo and Dettah just outside of Yellowknife.

The case dates back to 2011.

That's when the band council at the time became aware that about half a million dollars that was loaned by the Yellowknives Dene to the Det’on Cho Corporation, a company set up by the band, was unaccounted for.

In testimony, the court heard that Det'on Cho's CEO Roy Erasmus Jr. told councillors they should just let it go and that it wasn't enough money to be concerned about.

Tsetta, the elected chief of N’Dilo at the time, said that was just one of the reasons he wrote a letter to the Prime Minister's office in June 2012 calling for a forensic audit.

Shortly after, the band council voted to strip Tsetta of his power to represent the band, suspend his pay and deny him access to offices, equipment, email and phones.

In his ruling, de Montigny said that Tsetta had every right to ask for an audit and to blow the whistle, noting that “allegations of mismanagement, fraud and corruption” at the First Nation date back many years and that “millions of dollars could be at stake.”  

The money stems from Impact Benefit Agreements with the territory’s diamond mines.

"There were certainly enough credible allegations of wrongdoing to raise legitimate concerns,” the judge wrote. "Tsetta's claims are not totally unsubstantiated and deserve at the very least to be investigated.”

The band itself recognized the need to review Det’on Cho’s involvement with the diamond industry. It passed  a motion in April of 2011 to spend $100,000 on a review aimed at transparency.

In May of that year, Barbara Powless-Labelle, a former band councillor, wrote to the Prime Minister alleging mismanagement. A week later, the band issued a press release attacking her, the judge writes. 

De Montigny said Tsetta’s views left him with few options. He could have either bowed to pressure and left the council quietly, or leaked the information to the press.

He says it was in the best interest of the First Nation to “clear the air and to deal with these issues in a fair and orderly manner”

The court has ordered the band to pay Tsetta just over a year of salary and benefits and to cover his legal costs.

That's expected to be in the hundreds of thousands of dollars.