Mtis National Council maps disputed transfer of veterans money to Manitoba Mtis Federation

The Mtis National Council (MNC) is mapping the path of a disputed multimillion-dollar transfer of federal money for a veterans legacy program from council coffers to the Manitoba Mtis Federation (MMF) in a bid to regain control of the cash, recent court filings show.

The long-time allies turned political opponents are making key internal documentspublic for the first time, putting how money changed hands under a microscope and revealing still-simmeringstrife between them.

The national group filed a court motionin February to get oversight of $8.65 million tied to a Mtis veterans legacy program, plus repossession of a digital Mtis history database it claims is being "unlawfully detained" by the federation.

It's the MNC's first move on the legal chessboard since suing its ex-president Clem Chartier, former MNC vice-president and current MMF President David Chartrand, the MMF itself and several officials and consultants in January 2022 for alleged financial wrongdoing.

The Ottawa-based national group says it believes Chartrand and the MMF have "misused" the veterans cash for ineligible expenses, an accusation Chartrand calls "baseless," according to affidavits filed in February and March.

None of the allegations have been proven in court.

MNC President Cassidy Caron was unavailable for an interview. In a written statement, MNCsaid it seeks, at minimum, joint control over the cash and database until trial.

"MNC had to make a number of demands through counsel in order for MMF to 'voluntarily' deliver various veterans program accounting records," the statement said.

"MNC does not believe that MNC has received all of the required documentation to ensure that there has been a complete and accurate accounting."

Chartrand was not made availablefor an interview. In written statement to CBC News, the MMFsaid it's confident the court will dismiss the motion.

"There is not a single shred of evidence that any of the funds for the veterans program have been misused. All of the funds have been used for the program," the statement said.

"This motion, and the litigation as a whole, is based completely on groundless suspicions and is motivated by the political agenda of the MNC. Neither the MMF nor President Chartrand have any concerns with the records becoming public because they have nothing to hide."

Timeline of transfer

CBC News has obtained the affidavits, which include previous court filings, contracts, emails, letters, internal memos, bank statements, expense reports and similar documents.

The files show the veterans program at issue was created in June 2019 through a federal contribution agreement signed by Veterans Affairs Minister Lawrence MacAulayfor Canada and Chartrand, listed as minister of both finance and veterans affairs,for MNC.

MacAulay's office declined an interview request for this story, citing the ongoing court dispute.

Under the deal, Canada agreed to give MNC $30 million to spend on $20,000 individual recognition payments to Mtis Second World War veterans or their family members, or commemorative initiatives in their honour.

In exchange, MNC agreed to administer the program diligently, use the cash for only those two objectives, keep comprehensive records and grant Ottawa access to the books if asked.

The MNC and MMF were then in lockstep, but discord was brewing. The MMF helped found the council in 1983, but internal strife over core issues of identity and citizenship ramped up around 2018, the files show.

With that in the background, the Chartier-ChartrandMNC administrationinvested roughly $20 million of the money with asset-management firm Richardson Wealth to support the program long term, Chartrand's affidavit says. He says the investment remains under MNC's control.

While that was being arranged in June 2020, Chartrand's MNC office prepared an operational plan contemplating a cash transfer to Chartrand's other organization, MMF, to run the program.

But there was a problem. The contribution agreement blocks MNC from "assigning" the contract without MacAulay's consent, meaning the MNC can't offload its contractual responsibilities to anyone else.

MNC's then-director of finance wrote a memo, which was filed in court, expressing this concern, saying it should be addressed before money changed hands. The official outlined possible workarounds, explaining that "assignment" is banned, but "subcontracting" isn't.

Less than a month later, MNC "outsourced" the veterans program to MMF via a service delivery agreement dated Sept. 4, 2020. Chartrand signed the deal again as MNC vice-president and minister of finance, authorizing a $3.15-million cash allocation to the MMF.

The outsourcing contract says it's "not an assignment" of the contribution agreement. A month later, Chartrand was asked to approve the wire transfer. The cash landed in an MMF account at the Royal Bank in Winnipeg the same day, emails and bank statements show.

Talks led to financial disclosure

Then on April 22, 2021, amid increasing challenges to Chartier and Chartrand's MNC leadership, the outsourcing deal was amended, making it "irrevocable" for a decade with a five-year extension option. MMF also obtained the right to charge a 15 per cent management fee that wasn't in the original deal. It also added another $5.5-million transfer.

Things boiled over politically shortly after. In July 2021, a provincial judge ordered the MNC to hold an election, asChartier overstayed his term amid the fractious identity dispute.

In September, right before the election, the MMF abruptly broke from the council, accusing the other members of opening the floodgates to an "eastern invasion" of non-Mtis outsiders.

A month later, Caron's new regime was already warning of a possible lawsuit, accusing Chartrand of being in a conflict of interest while signing deals for MNC with his other association.

Chartrand's counsel rebuffed the claim. In his affidavit,Chartrand maintains the service agreement is valid, legal and that Chartier and senior MNC leaders were all aware of his MMF ties. He says there was nothing improper or irregular about the transfer.

Chartier declined an interview request sent through his lawyer.

That claim was filed in January 2022. Months of legal talks continued in the background as the national council sought access to MMF's program finances, letters show.

The MMF eventually agreed to disclose 472 pages of records consisting of general ledgers, statements of operations, lists of Mtis veteran payments, commemoration project details and associated bank statements, according to Chartrand's affidavit.

At the time, 80 individual payments had been made worth $1.6 million, says a June 2022 letter attached to the disclosure. A $1.4-million veterans book collection commemoration project was also authorized, plus a $689,211 monument and a video documentary series worth $146,130.

The MMF also contributed more than $400,000 back into the program, the letter adds.

The MNC, which hired an outside accountant to review the files, decided the disclosure was insufficient, sparking the current court request for oversight.

A hearing for the motion is scheduled for July.