Indigenous

National Métis group gave IT contracts to 2 companies linked to policy adviser

The Métis National Council (MNC), facing its second federal audit in the last seven years, paid hundreds of thousands of dollars to two companies directed by the same MNC policy adviser for IT-related work, according to records obtained by CBC News.

One company was registered as a not-for-profit created to help Chinese immigrants do business in Canada

Wei Xie, a policy adviser for the Métis National Council, was a director of two companies that did over $500,000 worth of IT-related work for the organization. (metisnation.ca)

The Métis National Council (MNC), facing its second federal audit in the last seven years, paid hundreds of thousands of dollars to two companies directed by the same MNC policy adviser for IT-related work, according to records obtained by CBC News. 

The MNC  paid one of the companies over $200,000 for three months of IT-related work to develop an online "knowledge portal" to a not-for-profit business created to help new Chinese immigrants do business in Canada, according to invoices and corporate records. 

An MNC policy adviser named Wei Xie was listed as the co-director of both firms during the time the Métis organization paid for the services, corporate records and invoices show. 

Wei told CBC News that her job went far beyond IT services into policy development, and she denied allegations that she overcharged for her services.

The MNC represents the interests of the Métis people nationally. It receives millions annually from the federal government for its operations.

The federal Crown-Indigenous Relations Department launched a compliance audit last summer to review how the MNC was spending federal dollars after meeting with investigators from the RCMP.

David Chartrand, the minister of finance for the MNC, said the audit would find nothing amiss with the organization's finances. He said the allegations were driven by former employees with an axe to grind. He denied there is an RCMP investigation.

"They can check my books all they want. I am not afraid of nothing because I am never going to be crooked as long as I live and breathe," said Chartrand, who is also president of the Manitoba Métis Federation.

The federal police had opened an investigation after interviewing three former MNC employees who made several allegations of financial improprieties against individuals and companies doing business with and employed by the MNC.

The allegations included concerns over payments for IT-related services for which no work appeared to have been done, according to a copy of the complaint given to the RCMP that was obtained by CBC News. None of the allegations has resulted in any charges or been proven in court.

David Chartrand, minister of finance for the Métis National Council, says that he would never be involved in corruption and that the organization's books are clean. (Jaison Empson/CBC)

CBC News spoke to two of the three former employees, whose names are being withheld over concerns that revealing their identities could affect their employment. 

The RCMP investigation remains open, and investigators will determine their next steps after Ernst & Young finishes its audit, according to email correspondence between investigators and the former employees provided to CBC News.

Crown-Indigenous Relations Minister Carolyn Bennett's office said it couldn't comment while the financial probe was ongoing.

None of the allegations has been proven, and there has been no finding of wrongdoing.

MNC denies allegations

In a letter sent to CBC News in response to an emailed list of questions, Chartrand wrote that the MNC issues standing offers for a "variety of professional consulting services" and that the organization follows Generally Accepted Accounting Principles (GAAP). Chartrand also says the MNC's annual audit conducted by an independent third-party accounting firm is shared with the federal government every year.

The letter said the MNC requires contractors to have a minimum of "10 years of work experience on Métis Nation-specific interests" and that the last standing offer was issued in 2016. 

A standing offer means a supplier is offering goods or services at a prearranged price. It doesn't lead to a contract until the buyer asks for the goods and services against that standing offer in a "call-up," according to the federal government's definition.

"The MNC enters into an agreement with all consultants and receives and approves all invoices for services rendered prior to payment," said the letter.

"These policies, procedures and practices are reviewed by our auditor annually, and the MNC annual audited statements are routinely posted on the MNC website and are shared with its governing members."

The MNC's funding from Ottawa has grown to nearly $8 million in 2018 from about $3 million in 2015, according to its yearly audited financial reports.

This is the second time in seven years the MNC has undergone an audit.

The company webpage for SystemWay, which lists Wei Xie as one of its two directors. It was paid hundreds of thousands of dollars by the MNC for IT-related work and other tasks. (systemway.ca)
 

In 2012, auditing firm Hallux Consulting concluded that the MNC should pay Ottawa back $1.35 million for ineligible expenditures between 2008 and 2012.

Chartrand dismissed the Hallux audit, saying all of its findings were "not correct" and that the MNC did not have to pay any money back after sorting it out with the department.

CBC News asked Crown-Indigenous Relations to confirm Chartrand's comments, but the department failed to respond to repeated questions over several days.

CBC News shared a copy of the complaint against the MNC submitted to the RCMP with David Debenham, a lawyer with McMillan LLP and an expert on financial crimes who co-chairs the Fraud Law Group. 

Debenham said allegations of the type made in the complaint would generally require a forensic-level audit to clear up. 

"Just because someone puts a statement out there that says something, that's enough to start an investigation, but it's not enough to conclude anything at all," he said.

Invoice details, service costs questioned

Some of the red flags raised by the Hallux audit are alleged again in the current complaint by the former MNC employees, including allegations of improper expense claims and the absence of a competitive process around selecting contractors for projects.

Two Ottawa-based firms named in the complaint, SystemWay and BizNest, received hundreds of thousands of dollars worth of payments from the MNC between 2015 and early 2018, according to copies of invoices obtained by CBC News. 

Wei Xie, a policy adviser for the MNC, is currently listed as one of two directors for SystemWay. She was also listed as a co-director of BizNest until April. 

The MNC paid SystemWay about $500,000 between January 2015 and February 2018 for IT-related and policy consulting work. 

About $300,000 of the total was paid to SystemWay through near-monthly invoices — ranging between $5,000 and $8,750 — that listed the maintenance, domain registration, monitoring and hosting of the organization's web pages and emails as its billable tasks. 

None of the invoices provided a per-task price breakdown of the services provided by SystemWay. 

Umar Ruhi, an associate professor of business analytics and information systems with the University of Ottawa's Telfer School of Management, said domain registration and hosting are simple tasks that shouldn't cost more than $1,000 to $1,500 per year for all of the MNC's domains combined.

"The price tag by the hosting provider seems exorbitant," he said.

"Even if this includes content updates, web design services, etc., it sounds expensive." 

Ruhi also said the services provided by SystemWay for most of MNC's websites do not meet industry standards. He said the websites — including one that requires a password — lack proper digital certificates and come up as "not secure" on the Chrome web browser. 

"They indicate a minimal level of trust between the site and the user," he said.

Chartrand said in the letter that the MNC has a "very robust" information management system. 

"These information management systems and platforms have developed over the last 5 years by a variety of developers and are routinely used to support internal policy development," said the letter.

The MNC's main website is updated regularly. However, its Métis Nation Gateway portal, which links to several other sites on Métis rights, health and economic development, has been updated sporadically over the past few years. 

The Métis Veterans website was last updated in 2011, according to a comparison of historical screenshots found through the Wayback Machine website. 

A screengrab of the Métis National Council's Métis Veterans webpage taken on June 11, 2019. (metisveterans.ca)
A screenshot of the Métis Veterans webpage from Nov. 12, 2011, from the Wayback Machine website. (archive.org)

Wei said in an interview with CBC News that it wasn't her job to update the websites. She also said that IT services were only part of the overall work she did with the MNC, which included a lot of policy initiatives. 

"The portal is a very small part," Wei said. 

"I work very closely to set up the knowledge portal and where to store the knowledge. It's not to update websites per se, that is not my job. 

"I have done, in the past three years, with the key consulting team and the policy team of the MNC, we've made huge work with the federal government. …You cannot just say this webpage is not updated. I have a big scope of work … I don't want to be accused because of saying you didn't do changes and you got paid for this much and you didn't do your job. My job is not only that; that is what I am trying to say."

The MNC also paid $240,000 in 2017 to BizNest in three invoices for three months' work for the "development of Métis Nation socio-economic profile and knowledge integration project." 

The project aimed to "built and infrastructure that can store information about all subjects and provide easily search, cross reference and navigate available information" [sic], according to the invoice.

BizNest was registered by Wei and another individual in 2014 as a not-for-profit corporation to "provide supports to young entrepreneurs," according to corporate records.

Ruhi said the BizNest invoices, which he reviewed, raised concerns because they provided no breakdown for each of the three phases of work billed by the company.

Ruhi said some of these issues would be spotted by someone knowledgeable in IT matters.

"It makes me wonder whether the community organization has someone with tech savvy on their advisory board," he said.

Wei said the payment was for data work related to a new online "knowledge portal" that will have 20 associated sites. It remains under wraps.

"We are hosting it on our internal portal trying to test it," she said. "We promote the portal in all kinds of meetings."

Wei said Biznest was originally created to help Chinese immigrants start businesses and develop business plans. Wei said her business partner was growing his own IT business and she felt the contract would be a good fit.

"He has a whole management team to manage all this stuff," she said. 

"I spoke to him about two years that I would let him run, because he was running the data management stuff, which was really good. He and his team was running the stuff. They are doing the MNC data portal … it's a big application running all the census data in there."

The MNC did not respond to questions from CBC News about why it chose Wei and Biznest for the work.

'Who's BizNest?'

When asked about BizNest, Chartrand initially seemed confused about the name of the company.

"Who's BizNest?" said Chartrand, during an interview at the MNC's Ottawa headquarters, where he was with several of the organization's employees and contractors.

Chartrand was then reminded by his officials that the company had done data work for the new online portal. 

Chartrand said he signs "thousands of cheques" and couldn't be expected to remember each one. 

Chartrand said the MNC has stuck with certain contractors over the years because they are patient when it comes to payments, which he said are tied to Ottawa's funding schedule.   

Wenda Watteyne, the MNC's executive director, said the new online portal was completed last year, but hasn't gone live because MNC president Clement Chartier was unhappy with it. 

Clement Chartier, president of the Métis National Council, refused to sign off on the new online portal, according to the organization's executive director. (David Vincent/The Associated Press)

Chartrand's letter to CBC News said the new "information/knowledge portals and data tools" are not yet available to the public because of "data quality issues" because "data sets collected by Statistics Canada are inherently unreliable and problematic."  

The MNC has been working with Statistics Canada's chief statisticians to "improve data collection" that would allow the publishing of more accurate data "for the first time ever," the letter said.

Statistics Canada said it is in a "collaborative relationship with the MNC" and that it has provided customized census and Aboriginal Peoples Survey data tabulations for the organization.

Statistics Canada said, in preparation for the 2021 census, it plans to update its questions around Indigenous identity in upcoming surveys to include whether respondents are part of a Métis organization or citizens of a Métis government.

MNC's publicly available websites are managed by personnel with the expertise to make changes on an as-required basis, the letter said, adding that MNC's IT system management support includes a wide array of services including cellphones, printers, scanners, internet and email as well as remote access to the organization's servers.

About the Author

Jorge Barrera is a Caracas-born, award-winning journalist who has worked across the country and internationally. He works for CBC's Indigenous unit based out of Ottawa. Follow him on Twitter @JorgeBarrera or email him jorge.barrera@cbc.ca.