The Waskaganish band council is thinking about closing down its profitable construction firm Nuskan LP after questions have been raised about possible conflict-of-interest and accountability.
The surprise move stems from concerns that the band has little control over Nuskan’s operations and isn’t kept up-to-date on the company.
The band owns 51 percent of Nuskan; the rest is owned by a Montreal construction firm, Alta Limited.
There are also concerns that Nuskan president Billy Diamond, the community’s former chief, has gotten involved in another company with Alta Ltd. on the side.
This new company, Diamond-Alta, is a joint venture of Alta Ltd. and Diamond Holdings, which is owned by Billy Diamond and members of his family.
Diamond Holdings owns 51 percent of Diamond-Alta.
In June, Diamond-Alta bid for its first-ever construction project, a $7.9-million contract for an 800-metre bridge in the vicinity of Listiguj, New Brunswick.
Diamond-Alta successfully beat out the other bidders, which included the Cree Construction Company.
Diamond-Alta’s bid was announced with great fanfare by federal Public Works Minister Alfonso Gagliano. “I am delighted to announce this contract award to Diamond-Alta,” he said.
“This is the largest construction contract ever awarded under the Aboriginal Set-Aside Program in the Atlantic region,” the minister said in a statement.
Some Crees are concerned about the lost contract and also the potential for conflict-of-interest.
“There is a potential conflict-of-interest when we have a joint venture with a company and then he (Diamond) turns around and sets up another company with the same company,” said Gordon Blueboy, a Waskanish band council member.
“It was a surprise to me when I read the press release on the awarding of the contract. That’s why we have questions about Nuskan itself.”
Another band official who requested anonymity agreed: “I think it’s a potential conflict-of-interest. A lot of people are asking how this could be possible.” Community members are also concerned that Alta Ltd., the band’s outside partner, has too much control over Nuskan, Blueboy said.
“Most of the Waskaganish people don’t really know who Nuskan is. We don’t really have a say in the company. Our people are not really involved,” he said.
Blueboy said some band personnel were not aware that they were members of Nuskan’s board of directors.
The band council discussed what to do with Nuskan at its last meeting. One of the ideas was withdrawing from the joint venture, said Blueboy. No decisions have been made yet.
Diamond doesn’t receive a salary as president of Nuskan, a position he has held since before he was chief.
Diamond declined to run again for chief last summer after questions about the band’s mounting debt and financial mismanagement.
This past summer, a proposal was made for Diamond to receive a salary for being Nuskan’s president, but this was rejected at a community general assembly.
Diamond didn’t return calls to his home or cell phone. An Alta Ltd. official wouldn’t answer questions.
Harold Pohoresky, a lawyer who has worked with Diamond, also refused to comment, referring all questions to Diamond, then abruptly hanging up.
Cree Co. chairman Jack Blacksmith said he is satisfied that nothing improper was done in the Listiguj bridge contract, and that Diamond-Alta really does qualify under the Aboriginal Set-Aside Program, which is reserved for Native-owned companies.
Blacksmith acknowledged he is disappointed Cree Construction didn’t win the bid: “We’re always disappointed we don’t get those contracts we would like to get, but that’s the industry.”
Cree Construction president Steven Bearskin didn’t return a phone call.
Ironically, the idea of closing Nuskan comes at a time of business success for the company. It has finished a contract worth about $10 million to build 30 kilometres of the Waskaganish highway.
Until the current controversy, Nuskan was also a contender along with Cree Construction to get a piece of phase three of the highway project, worth about $7 million.
Last February, Nuskan declared a $400,000 dividend, half of which went to the band, said a source. In April, it declared another dividend of $250,000.