Ken Courchene - Virginia Fontaine Memorial Treatment Centre Controversy

Virginia Fontaine Memorial Treatment Centre Controversy

After standing down as chief, Courchene became Chief Operating Officer of the Virginia Fontaine Memorial Treatment Centre in Sagkeeng. The centre was the subject of a federal audit in 1995, which uncovered nearly $1.2 million in "unsupported per diem billings", $1.3 million in "questionable expenditures" and $200,000 in "travel expenses not supported with original receipts". Courchene said that the audit was "born in a series of lies" by Indian Affairs officials trying to assert control over the band's finances.

In October 2000, the Canadian media reported allegations that centre directors, staff members and their spouses had taken a week-long Caribbean cruise with money from their professional development budget. The federal government donated $7.2 million per year to the centre at the time, and there were concerns that federal funds had been used for the vacation. Courchene said that employees raised the money privately, and that it was not of the general operating budget. He later said that the money was raised through charity bingos. Notwithstanding his comments, the federal government ordered a forsenic audit into the centre's budget in the same month as the controversy broke. Other allegations of improper spending were reported in the following weeks, and some executives at Manitoba's other aboriginal treatment centres expressed surprise at the amount of federal money received by Virginia Fontaine.

Courchene argued that the treatment centre was not required to cede its financial records to federal auditors, saying that the institution was an independent contractor in partnership with the government. He later agreed to provide the government with documents covering the period after July 1, 2000. The federal government accepted this condition in mid-November.

One month later, Health Canada announced that it was withdrawing financial support from the centre. A representative said that the federal agency had "lost confidence in the foundation's ability to manage the funds they've been receiving", adding that staff were not cooperating with the audit. The federal government subsequently sued Virginia Fontaine Addictions Foundation Inc. and its directors for the recovery of public funds, and attempted to bring the centre into receivership.

In February 2001, Courchene acknowledged that he had made several incorrect statements in a prior affidavit detailing the centre's financial activities. Among other things, he retracted his claim that the centre had never held board meetings before negotiating a $35 million deal with the federal government. He also said that he did not know the source of $491,000 deposited in the centre's account in September, and blamed a bad memory and shoddy bookkeeping for the discrepancies.

Associate Justice Jeffrey Oliphant of the Court of Queen's Bench of Manitoba issued a scathing indictment of financial practices at the centre on February 8, 2001, and gave the federal government permission to conduct an "unrestricted audit". The centre closed later in the month. It was later revealed that SJC Consulting, operated by Courchene's cousin Steve Courchene, received $1.9 million from the centre between April 1, 1992 and September 30, 1995. Steve Courchene was an executive member of the Virginia Fontaine Memorial Centre at the time of the payments.

The Fontaine Centre's executive members initially filed a joint statement of defence in response to the federal government's civil suit. This unity collapsed in 2005, when Courchene, Lana Daniels and Keith Fontaine submitted that centre director Perry Fontaine and two federal officials had conspired for the deliberate misuse of public monies. Courchene, Daniels and Keith Fontaine sued Perry Fontaine and the federal government, and were in turn sued by Perry Fontaine. In November 2005, the federal government further alleged that Ken Courchene, Steve Courchene, Keith Fontaine and Perry Fontaine were part of a conspiracy to defraud the federal government of $332,000 relating to the lease on a gym they claimed to own.

None of the charges against Courchene have been proven in court.