Court File No. 13?20008 SUPERIOR COURT OF JUSTICE (East Region) BETWEEN: HER MAJESTY THE QUEEN - and? BRUCE CARSON SUMMARY OF THE EVIDENCE PROVIDED AT THE - PRELIMINARY HEARING Held June 2 t0 5, 2014 before Mr. Justice J. Brunet of the . Ontario Court of Justice at Ottawa, Ontario TOBE Glossary of Terms Used'in this Summary Individuals SA Shawn Atleo [former Grand Chief of the BC I Bruce Carson GB Garry Best LB Lysane Boluc PH Patrick Hill NK Nick Kaszap GM Gail Mitchell MM Michele McPherson Organizations AFN Assembly of First Nations APTN Aboriginal People?s Television Network Band For ease of convenience, the word ?Bands? will be used to denote First Nation or Aboriginal communities CSEE Canada School of Energy and Environment H20 Ottawa?area water treatment company owned and operated by Kaszap and Hill. The company was formally known as ?Water Professionals Inc.? Pros for short] and then became known as the ?Global Water Group? when Hill and Kaszap ended their business relationship in October, 2010 INAC lndian and Northern Affairs Canada [which subsequently became Aboriginal Affairs and Northern Development Canada in 2011] Other Trial Book of Exhibits Ms Between 2006 and 2008 and again brie?y in 2009 Bruce carson worked in the Prime Minister?s Of?ce in Ottawa as a-Senior Adviser to Prime Minister Stephen Harper. On March 16, 2011 Mr. V. Raymond Novak, the Principal Secretary to the Prime Minister, sent a letter to the-Commissioner of the RCMP alerting them to materials in the possession Volume 1 of the BOE. As a result of that letter, the RCMP commenced a formal criminal investigation and as a result on June 25, 2013 BC was charged with one count pursuant to s. 121 of the Criminal Code. During all material times in this matter, BC was the Executive Director of the CSEB based in Calgary, Alberta see the explanation sheets at Tab 2 of Volume 1 TBOE. He assumed that position in 2008. The evidence of the witnesses as outlined below is a summary of the evidence that they provided at the Preliminary Hearing in this matter which was held in June, 2014. II: The Evidence of Michelle McPherson [the transcript of her Preliminary Hearing evidence is contained at Tab 1 of Volume 2 of the Background Michelle McPherson ?rst met BC in February, 2010 in Ottawa, Ontario. They subsequently commenced an intimate relationship. Approximately one month after they met, BC told her that he worked at the University of Calgary and that previously he had worked in the Prime Minister?s Office. During the course of their relationship she encountered a variety of ?high pro?le? individuals such as SA of the AFN. The Introduction of BC to H20 In March 2010, MM was introduced to NK and PH via a mutual friend. NK and PH were co?owners of an Ottawa?based water company called H2O Pros. MM was looking for employment possibilities and after being hired by PH she worked at H20 for approximately two weeks doing marketing work. MM had no other sourceof income at that time. In the late Spring or early Summer of 2010, BC told that he had met with SA about water issues in Bands? communities. She then told him about H20 and that perhaps H20 could assist in addressing some of those issues. MM also knew that H20 had previously tried to engage with some Bands about water issues. MM then spoke with PH about BC. MM described PH as being ?excited? about BC. MM, BC, PH and NK then met at the H20 of?ces where BC was given a demonstration of the water treatment systems used by H20. During that meeting PH and NK indicated that they were seeking information on how to proceed in the future with respect to Bands. In response, BC stated that he would be able to assist ?nding relevant information at both the AFN and INAC. Prior Employment. Educational Experience and her Role at H20 MM had a grade nine education and no prior experience working with water treatment systems, government agencies such as INAC or Aboriginal organizations such as the AFN. MM believed that she would be working on this project and she approached PH and NK on her own about being employed. After introducing BC to PH and NK, MM subsequently went on marketing trips to Tiinrnins and New Liskeard in Northern Ontario and Tiuro, Nova Scotia. She was the person who ?brought the connection together at this point? and she felt that there ?would be ajobfor me lined up once we actually got this project on the road?. She also felt that she would have a ?significant role to play? once contracts were signed with Bands. In terms of work for H20, other than the marketing trips mentioned above, she attended less than 10 internal planning or strategy meetings With BC, PH and NK which were approximately an hour in length. Subsequently, meetings were set up with to gather information but MM did not-attend any of those meetings. From the Summer of 2010 into the Fall of 2010 MM was in the ?background? because ?there wasn ?t very much taking place?. MM attended the AFN Christmas Party in December 2010 where H20 had paid for a table. She attended on behalf of H20 and did ?a lot ofhzarketing?. A pamphlet was placed at each table explaining H20 and its products. MM also assisted her mother in developing advertising material and web design for H20. Bruce Carson?s Compensation from H20 MM stated that Bruce Carson was not paid for any of the work that he provided to H20. Compensation from H20 MM believed that there could be ?signi?cant pro?ts? in the event that water contracts were signed with Bands and sales of water systems commenced. In that regard, she spoke with PH and NK about compensation ?to protect herself. She approached them in August 2010 about engaging in a formal contract which was ultimately signed on August 31, 2010 see Tab 5 of Volume 1 TBOE. She stated that it was her idea. She was not sure whether BC had discussed that contract with PH and NK. That contract was drafted by a law ?rm in Ottawa and those legal services were paid for by BC. MM was not aware of any suggestion that BC would cease his work for H2O in the event that she was not compensated or if the contract was not signed. The contract was signed at the Chateau Laurier and the signatories were herself, PH, NK and BC who signed as a witness. Neither PH nor NK had any issue about signing that contract. The signing of the contract was referred to by BC in a February 2, 2011 email from himself to PH see Tab 23 of Volume 3 TBOE. Although ultimately she did not receive any compensation pursuant to that ?rst contract, she was paid $700.00 by H2O via cheque in late 2010 or early 2011i She believed that in total she received approximately $1400.00 in compensation for her work at H20. role at H20 did not change after that contract was signed. MM also signed a second contract with H2O in January 2011 entitled the ?Amended and Restated Agency Agreement? see Tab 6 of Volume 1 TBOE. It was also drafted by a law firm and she hired a lawyer for that purpose. This second contract was idea and it reduced her commission from 20% to 15% and added a non-competition clause. Although name appears on the contract he did not play a role in producing that contract. Ultimately there were no payments made under either contract. Carson?s Financial Support of MM On December 16, 2010 BC wrote MM a cheque in the amount of $2000.00 see Tab 7 of Volume 1 TB OE. She subsequently cashed that cheque and explained that BC provided this money to her because she had no source of income and was ?struggling at thatpoim to make ends meet?. BC did not tell her where he obtained that money from. Although they were living separately BC also provided her with other varied amounts of money in order to support her on a personal basis. Views of Role at H20 With respect to work with and for H20, she stated that he offered to obtain the information that H20 required. In that respect, he contacted GM at INAC as someone whom he had previously worked with. He also emailed ministers seeking information ?about how to move something like this along? and attempted to gain information from the AFN about how to sell water treatment units to Bands. Some of that information was also available on the website. At one point he met with his close ??iend SA at the Chateau Laurier. He also attended meetings with PH and NK. BC did not suggest that he was in a position to affect any decision by INAC or other government agencies. Work with Aboriginal Communities H20 was focusing on four Ontario Bands in late 2010 in the hope of beginning a pilot project. MM did not know whether the AFN had identi?ed speci?c Bands who required water treatment she believed that that information came from INAC. They also made direct contact with the Band at the Bay of Quinte. However, ultimately H20 did not sign any contracts with Bands. Carson and Mortgage At one point BC and her applied for a mortgage on a house in November 2010. BC arranged for employment papers to be issued by H20 with respect to her work there but she could not recall what her position was listed as. also knew that BC had approached PH about a loan of money for the same mortgage but she did not feel that that was a good idea given ?nancial state. Mother and H20 In December 2010 mother commenced full time work with H2O because of she had ?a lot of experience in this kind of stu?? For example, she put together proposals for Bands. She had an of?ce at the H20 of?ce and although she was the receptionist she also worked on the. water project. She was paid by PH butMM also arranged an informal understanding between herself and her mother so that her mother would be paid 5% of 15% in the latter?s contract [footnote that this meant that would only receive 10% sales commission in the event of sales] in the event that any water contracts were signed. mother worked at H20 until it went bankrupt in 201 1. 10 The Evidence of Nicholas Kaszap [the transcript of his Preliminary Hearing evidence is contained at Tab 2 of Volume 2 of the Background Nicholas Kaszap had been involved in water treatment systems since 2008. In 2008 he worked for PH selling water systems in a company called Simple H20 and in 2009 this relationship ultimately developed into a conpaltnership between them in the form of the H20 Professionals inc. The company had an of?ce at 5370 Canotek Rd. in Ottawa and although most of their business was in the Ottawa area they operated across Ontario. The focus of the company?s business was residential water treatment systems. At its height it had approximately 15-20 employees. Prior to meeting BC, in early 2009 NK attempted to contact Bands with the hope of selling them water treatment systems. He stated that there were many meetings and phone calls but no sales because it was ?quite complicated? and there was ?a let ofred tape?. PH was aware of those efforts and supported the effort to sell systems to Bands. At one point they met with members of the AFN and INAC about this issue but prior to meeting BC he did not understand the dynamics between the AFN and INAC and other federal agencies. He also did not understand the funding procedures for water treatment systems and Bands. He and PH did meet with the Bay of Quinte Band in February 2010 and they made a . presentation to the Band Council but there was no follow up from that Band. NK Meeting MM Prior to working in the water industry, NK worked at a bistro in Ottawa. One of his co- workers had a friend named Reza who at the time was the boyfriend of MM. In early 2010 he met MM during some social occasions once or twice a month with her boyfriend Reza. NK considered MM an acquaintance at that point. 11 At one point Reza began to oversee the H20 of?ce while NK and PH were away? on business. NK does not recall MM working at H20 in early 2010 doing marketing work. NK Meeting BC In late February or early March 2010, Reza stated to him and PH that they had ?hit the jackpot?. Reza stated that BC was one of ?customers? and that he ?could get this whole AFN and INAC water treatment deal to go through?. He had never met or heard of BC before this time. h/[M arranged a meeting at the Chateau Laurier between herself, NK PH and BC. in the Spring of 2010. MM introduced NK as her ?brother? and the meeting lasted approximately 45 minutes. BC provided his business card from CSEE and stated that he worked for the Canada School of Energy in Calgary. After indicating to BC that they were looking to sell water treatment systems to Bands, BC told them that he ?could help us in doing that and that he was ready doing this for Michelle?. He stated that he could ?make some important calis? for them and get them ?in?ont of the right pe0ple? and ?push it through?. BC did not indicate that this was a CSEE project or initiative. NK believed that although a Band Conneil would decide Where to purchase water treatment equipment it was INAC who allocated the funding for such projects. Subsequently, BC set up a meeting with SA at the Chateau Laurier where they introduced him to H20 and its products and how they wished to help. NK recalled that SA referred them to GM and GB at INAC. NK testi?ed that BC repeatedly told them that ?he could get this done? meaning getting the water treatment systems installed. 12 The Chateau Laurier meeting on August 31., 2010 and First Contract NK testi?ed that after some discussions and emails and a visit by BC to the H20 of?ce, he and PK were asked by BC to attend meeting with MM and himself at the Chateau Laurier on August 31, 2010. Once there, BC provided them with copies of the contract which was supposed ?to protect Michelle?. Although there had been prior discussions about compensating MM, NK was not aware that the pmpose'of that meeting was to discuss a contract for MM and he had not reviewed it before that meeting. Prior to this meeting MM did no work for H20. NK viewed MM as a ?facilitator? between H20 and BC. He also did not believe that she would be able to help in the future with selling systems to Bands. After some initial reluctance and at urging, he signed the contract along with PH, MM and BC. NK did not recall MM making any comments during the meeting. NK testi?ed that he was very upset at this turn of events. At the meeting BC retrieved four copies of the contract from his briefcase and stated that he was ?doing this for Michelle? and ?in order to protect Michelle? he need them to sign this ?agreement that says that she will be compensated for the work that I?m going to be cloingfor you guys and the contracts that you ?re going to be getting?. BC also stated that if the contract was not signed then ?nothing would be done and that we would all move our separate ways?. He felt that the contract would be activated only if sales occurred. Views of Role at H20 NK did not consider MM an employee of H20 simply because the contract was signed.- Indeed, he testi?ed that MM never worked at H20 and that he was not aware of her ever 13 receiving compensation from H20. He also testi?ed that MM was not representing the company when she travelled to Timmins but instead was acting as a prostitute. The September 2010 Meeting with INAC In September 2010 BC arranged a meeting at the INAC of?ces in Gatineau. A number of people attended the meeting including BC, PH, NK and GM. The purpose of the meeting was to ?jz?gnre out how to go about getting water treatment systems installed on ?rst nations, and to know where the money was and how to have access getting that and to Show the heads what we could o?er for water treatment options?. They provided information about H20 and BC asked about how ?can we move fatward and there was talks of doing a pilot project to do on one ?rst nation?. NK testi?ed that response was ?very neutral? and nothing ?concrete? came from that meeting. Other Work by BC for H20 NK testi?ed that he believed that BC attended other meetings With was not aware of any details. Compensation for BC NK was aware that BC was paid by H20 via a cheque in the amount of $5000.00 but he was not aware of the reason for that payment. 14 Expectations for Profit for H20 NK testi?ed that he discussed with BC the potential for contracts regarding water issues on First Nations and that it was estimated to be in the ?millions?. However, no such contracts had been signed prior to his departure in October, 2010. Departure from H20 NK testi?ed that in late October, 2010 he left H20 and that his contact with BC and MM ended at that time. PH went on to create a new company called H20 Global. Emails With respect to the emails at Tab 1 of Volume 3 of the TBOE, he stated that he believed that BC and the Prime Minister were friends. He also stated that the cabinet shuf?e at INAC which occurred shortly after this email was sent did not change anything from their perspective. With respect to Tab 5 of Volume 3 of the TBOE, NK testi?ed that this email referred to the September 2010 meeting at INAC of?ce and that BC felt that the meeting went well and that they had to keep up the pressure with respect to the water project. 15 IV: The Evidence of Patrick Hill [the transcript of his Preliminary Hearing evidence is contained at Tab 3 of Volume 2 of the Brigham Mr. Hill testi?ed that he had been involved in the water system industry for about 6 years and in 2008 he began a company called H20 Pros based in Ottawa. Approximately a year later NK joined him as a co-owner. At that time the company had approximately 35 employees. PH testi?ed that prior to NK becoming a co-owner, he had met with several Bands with respect to water treatment systems but there were no sales. He had had discussions with Mr. Lemay at TNAC about water issues on First Nations, processes and procedures but he did not feel that ?we were really getting anywhere?. He also discussed H20 selling water treatment systems to First Nations. However, he described the process as ?ffrustrating? because ?it wasn really going the way we wanted it to go, especially knowing what the problem is?. Other than Mr. Lemay, he had not discussed this issue with any other INAC of?cial prior to meeting BC. PH Meeting MM and BC PH stated that NK introduced him to MM after had been with the company for about six months. He knew that MM was dating Reza and he'was told by Reza, NK and MM that BC could ?help my company stick handle through First Nations, and maybe do something good for ?rst Nations?. He had never met BC before. He ?rst met BC at the Chateau Laurier along with MM and NK in July or August 2010 and explained his frustrations to BC. BC responded that he had ?connections? and thought that he could help him out and knew some peeple that PH could talk to. 16 After that he held further meetings with BC. BC also took him to some meetings and PH- stated that BC ?had a lot of clout in the boardroom he knew what he was doing?. PH stated that he had ?very much? of an interest in knowledge of this area. Contact with INAC and the AFN . PH also took BC and an official from on a factory tour of a water treatment plant in Manitoba. He testi?ed that he attended approximately 3 or 4 meetings with BC and INAC at various locations to discuss water treatment systems for Bands. BC would always start off the meetings. BC arranged the September 2010 meeting with GM and GB. PH stated that ?all Mr. Carson did, and all he promised you he would do, would be?nd out how to get this thing done so you could succeed in this project?. BC never indicated that he could affect any decisions being made on the part of governrhent. BC said that have friends to help push this thing along?. With respect to the meetings with INAC, PH testi?ed that GM indicated that ?there ?s policies and procedures to through, they would try to help us with who has the worst water problem and maybe we could do some sort of pilot project?. H20 also did a ?sales? presentation to INAC at that meeting explaining about H20 and ?what we could do with First Nations water problem?. PH had hoped to gather information about how ?to get a pilot project on its way?. PH learned that INAC did not do any procurement and that that was handled by the Bands but that if H20 could get approval from a Band for a ilot ro'ect ?the ending is there and we can move orward?. 9 He also attended approximately four or five formal and informal meetings with AFN of?cials and BC the ?rst being a breakfast meeting with SA at the Chateau Laurier. SA provided the names of GM and GB at INAC as people to contact. PH also arranged and accompanied for some AFN officials and one INAC of?cial and BC to take a Water Group factory tour in Regina 17 PH described BC as being ?vezfy heip?ii? during those meetings. BC discussed water problems in general as well as H20. He also testi?ed that he did not believe that those meetings would have occurred but for BC. AFN of?cials also provided them with the names of Bands that may be in need of better water systems and provided some advice with respect to approaching those Bands. PH hoped to establish a pilot project and to deal with as many Bands as they could. He felt that there was potential of several millions of dollars at stake. He testi?ed that they approached Bands about participating in a pilot project and ?it would be ?mded by INAC and nobody believed us that it would be ?ttide with INA and we thought we might have fimding?. PH testi?ed that it was his understanding that there ?would have to be an approval through INAC and First Nations to start a pilot project? H20 ?wanted to pick two or three di?erent reserves? but PH felt that the Bands did not trust that INAC would provide the funding. Ultimately no contracts were signed with any Bands. The AFN Christmas Party PH testi?ed that he attended the party along with MM and BC and other employees from H20 where a brochure and business cards from H2O were handed out. He stated that BC had told him that it was the ?perfect place? to meet all of the various Chiefs from around Canada. At one point BC went onto the stage and discussed H20 and MM which angered some of the other H20 employees as she was being portrayed almost as if she was the president of H20. Prior to the party, BC told him that it cost $15,000.00 to sponsor a table but PH responded that he could not afford that amount. Ultimately, PH paid BC $5000.00 via cheque for the table A see Tab 4 of Volume 1 TOBE. PH believed that it went toward a donation to First Nations. 18 Compensation for BC . PH stated that BC was not paid for his work with H20. However, BC did ask him for for the purpose of securing a mortgage on a house. PH did not loan that money to him. PH was also asked to prepare employment records and business-cards for MM in order to assist her in applying for that mortgage. Views of Role With H20 PH stated that MM did not have any formal role at H20, did not attend any meetings with the AFN or INAC and only did ?ver fizzle? part-time ?marketing? at H20 for a ?very short period of time? after the Chateau Laruier meeting with BC. She ?dier do very well with it?. She also went a couple of road trips to accompany Reza but not for the purpose of selling H20 products. They ?found things for her to do, keep her happy?. Compensation for MM With respect to the August 31, 2010 contract, PH testi?ed that it was drafted by someone for MM and presented to them by BC on behalf at the Chateau Laurier. He stated that he and NK were ?nervous? of BC because they knew who he was and ?what he could do?. If they had not signed the contract PH testi?ed that ?we would go nowhere with INAC or irsiNaiions?. Although he initially signed the contract, the 20% accorded to ?didn ?ifeel right? to him. He told MM that ?there ?3 no way that 20 percent is going to happen. Iijitsi doesn make any sense. We ?re going to be doing all the grunt work and you make all the money?. He then approached a law ?rm and ultimately had the contract amended to 15% which resulted. in the ?Amended and Restated Agency Agreement? see Tab of Volume 1 TOBE. This was signed in February, 2011 by MM at the Gowlings law ?rm in Ottawa which PH had retained regarding re?drafting that contract. While they were l9 negotiating the contract PH testi?ed that MM ?would speak with Mr. Carson, and she could be quite upsetting with as and try to throw her weight around saying I can do this, ifyou don 'i do this, I can have Brace squash this whole thing?. PH was not aware of MM receiving any other compensation from H20 other than the two contracts. Mother and H20 PH testi?ed that MM and BC convinced him to hire mother and it ?turned out to be a nightmare? because she had ?various problems?. He worked approximately 3 or 4 months at H2O before she was ?red by PH. V: The Evidence of Lori Levett [the transcript of her Preliminary Hearing evidence is contained at Tab 4 of Volume 2 of the Lori Levett was hired the of?ce manager in August 2010. She stated that there were no formal employees as everyone was on a contract. Although initially she felt that ?this was a solid company? she realized very quickly [within 4 to 6 weeks of starting] that there were ?nancial and management issues. She stated that the ?whole ?nancial aspect. of this company was run very poorly?. A She recalled seeing MM and BC at the of?ce. She was not sure what role was and I she ?had no idea? 'who BC was. LL was aware that a few cheques were made out to MM, ?not major amounts, probably within the couple ofhandreds to hie-idreds?. PH asked her to make out those cheques but she had no idea why. She also recalled seeing name on a contract. 20 With respect to the $5000.00 cheque dated December 16, 201 0, she indicated that both she and PH signed that cheque. It was related to ?some kind of gala or event? and Ph made it clear that the cheques was ?extremely signi?cant? because ?Mr. Carson would be picking it up, and z'fhe did not receive it, it wortid ruin. his plans for that evening and have a very bad impact on theirplans?. She personally handed the cheque to BC. She believes that there was a second cheque for a similar amount also made out to BC. She left the company in January 2011 because in her View the company was not being run preperly. VI: The Evidence of Lvsane Bolduc [the transcript of her Preliminary Hearing evidence is contained at Tab 5 of Volume 2 of the TBOEI Background Lysane Bolduc was an expert in water and waste water treatment. She began as a senior engineer at INAC in September 2010 with GB as her supewisor. The September, 2010 Meeting On her very ?rst day of work she met with members of the AFN, BC and members of H20 at of?ce in Gatineau. Her role in the meeting was as technical expert. She felt that the purpose of the meeting was a presentation of H20?s point?of?entry water system products. She had a number of concerns about some aspects of those systems. Subsequently she prepared a report about the meeting which she supplied to her manager. She did not recall BC speaking much during the meeting but to her mind he was part of H20. 21 The December, 2010 Meeting In early December, 2010 she attended a second meeting with PH, BC and GM. The purpose of the meeting was to explain to H20 the funding process for purchasing water treatment systems. INAC made it clear that it was up to the Bands to decide whether to purchase this equipment and that INAC does not procure such equipment. She did not recall role at that meeting. Subsequent to that meeting she prepared report and sent it to MAC of?cials and of?ces as a ?heads-up, because our regional o??ices are ?'ontlz'ne working in partnerships with First Nation, so any matter that pertains to speci?c ?rst Nation they need to know, and be prepared to react?. The February 17. 2010 Call On February 17, 2011 she had a conference call with BC along with GB. The call was arranged at reqdest. They had previously explained the funding process to BC and H20 and directed them to Bands because INAC was a funding agency who provided funds to Bands. LB and GB explained the ?nding mechanism yet again and what role INAC played. LB explained to them that INAC would ?provide ftmding to bands [sic] on an ongoing basis in general under the Capital Facilities and Maintenance Program. They can manage this thelway they want. For example, they can use these funds to parchase point?of-en try equipment. When there ?s large projects, then they present proposals?. BC indicated that they had obtained a Band Council Resolution ?om the Mohawks of the Bay of Quinte and that H20 was ?making headway? with that Band. BC also invited or suggested that INAC attend a meeting with that Band. 22 Funding Procedures LB explained the difference between a pilot project and regular capital funding as follows: ?we at headquarters and at the regional office got a lot more closely involved, so there were conditions placed on participation to this initiative so we put a call for proposals from First nations first, explained what the process was going to be to First nations.? LB explained that First Nations ?are responsible for preparing proposals that capture their needs in terms of in?'astraetnre, presenting those to regional o?ices. Regional o?ices, using nationally approved prioritization tools, list projects from top to bottom. in terms of priorities, with priority given typically to health and safety projects, and again, headquarters role is to distribute nationally, so on that particular occasion we explained again what the fimding mechanism. was for those project?. LB also explained that INAC was exploring a pilot project system and then there would be a tendering process to procure items. The contract would be awarded by Bands ?who would be willing partieipants?. She explained that a pilot project wasnltimately put into place by INAC and they ultimately received 13 proposals from Bands. Four were chosen and they were told that one of the conditions of the project was that decisions would be made collaboratively i.e. with all of the project partners. Funding was provided by INAC and the contracts were awarded by the Bands to winning proponents in a public tender. LB explained that Bands could also purchase systems if they had their own funding. 23 Views of H20?s Intentions ?a With respect to H20, LB explained that after INAC indicated that they were contemplating a pilot project approach ?it was the pilot initiative that H20 Pro was interested in pursuing and accessing?. That was clear in February 2011 and it was probably clear in December 2010. LB explained that if H20 was interested in exploring water treatment systems with First Nations INAC would not be directly although they would be involved through the regular capital program or a pilot project that would involve tendering. View of BC During her three contacts with BC she believed that he was representing H20 Pros. However, he also identi?ed himself as Being with the Canada School of Energy and Environment in some of his email correspondence. 24 VII: The Evidence of Gail Mitchell [the transcript of her Preliminary Hearing evidence is contained at Tab 6 of Volume 2 of the Background Gail Mitchell was the Director General of Community Infrastructure at INAC since August, 2008. That branch was responsible for providing approximately one billion dollars in program and policy advice on a program that was focused on supporting approximately 600 First Nations across Canada and their delivery of infrastructure such as water, waste water, schools, housing, roads, etc. She reported to the Assistant Deputy Minister who in turn reported to the Minister. Prior Contact with BC A number of years before 2010 she had ?rst met BC at an Aboriginal affairs conference in Vancouver. BC was speaking for the Prime Minister?s Of?ce at the conference. BC then joined a steering committee with respect to land claims. She explained that the AFN and INAC worked together on numerous initiatives but the AFN usually acted as a conduit of information coming from First Nations? communities. INAC also funded some core operating costs at the AFN. Funding Procedures With respect to funding Band projects and iniatives, she explained that there were two streams of funding that INAC provided: 1. one related to the operation and maintenance of existing facilities on an annual basis; and 25 2. the second related to sporadic capital investments which entailed for example building new or major renovations of existing facilities. Funding for those projects was allocated based on priority and need and risk levels With respect to a Band seeking to upgrade or purchase a water treatment system, she explained the process as follows: a) if the Band wished to build an entire centralized system which may cost millions of dollars, the Band would likely present a proposal to INAC. INAC would then assess and review that proposal to determine if they would fund it especially with respect to the risk within the community. For example, if it was a high risk system at the end of its life cycle the that proposal from the Band might get into the queue for funding; or b) if the Band wished to build a smaller, decentralized system such as a well or cistern, then the Band had the option of using their operating and maintenance budget or collecting fees from their members. The Band would then make their own decision about what to purchase. In either scenario, the Band would undertake the procurement but INAC would provide the funding. Hypothetically, she stated that if a. Band had signed a contract with H20 to purchase water treatment systems, the Band would use their annual allocation from in their operation and maintenance budget to procure that product. She explained that it was ?fairly common? for private companies to approach INAC with business proposals. 26 Contact with BC She stated that her ?rst contact with BC was on August 19, 2010 Via an email from BC to herself? see Tab 2 of Volume 3; She agreed to meet with him on September 14, 2010 at the of?ce in Gatineau. She stated that BC was present along With GB, NK, PH and I John McMahon from H20. She explained the process to them while they explained their water treatment system which INAC was familiar with. She encouraged H20 to ?reach out to coma-amides and suggested that they may wanted to speak with the AF She did not think that there would be much more in the way of conversation or further meetings after the meeting ended. She stated that at that meeting BC stated that: 0 he was working with the National Chief and the Canada School of Energy and the Environment 0 he had occasion to see this product in action and was very impressed with it 0 based upon his past work on Aboriginal issues he had an understanding of the challenges that Band were facing; and 0 he wanted to support things and make a difference Other Contact with BC and H20 They met again in December 2010 with BC, PH, John McMahon and LB and herself present. She recalled that the H20 people were ?quite keen? to report that they had been talking to different Bands and that Bands were ?very interested? in the product. They asked about the next steps and INAC explained again how the process for procuring services worked and they need to enter into contracts with Band communities if they wished to sell them their products. She stated that H20 seemed to believe that INAC would provide funding if a Band passed a Band Council Resolution. She stated that they clarified the process ?several times in the course of the meeting?. 27 She stated that H20 invited members of INAC on a plant tour in Regina but INAC declined to participate. INAC did not: a endorse H20 as a service provider . suggest that H20 would receive funding from INAC for water treatment systems 0 believe that INAC was working with BC on policy or the implementation of any policy with regard to water issues on First Nations BC at no point mentioned anyother water treatment system and she felt that he was representing CSBE. She did not have a sense of what connection was with H20. Emails With respect to Tab 11 in Volume 3, and the assertion in email that H20 was the only water provider invited, she found that comment ?a bit odd? because the suggested discussion was going to be a discussion about general infrastructure challenges in First nation communities, not a trade show and not solely about water treatment issues. With respect to Tab 14 of Volume 3 and the email from BC to herself concerning INAC identifying four pilot projects, she stated that INAC did not consider them ?pilot projects?. With respect to Tab 17 of Volume 3, she stated that she did not know anything about ?a critical irzass ofbands? agreeing to use point?of?use systems installed by H20 Pros. With respect to tab 18 of Volume 3, she stated that in 2009 INAC had established a protocol that set out what conditions Bands could use departmental funding with small point-of?use treatment systems. There had to be a certain number and Bands could then use their annual funding to pay for those types of services. Prior to that, she stated that 28 INAC did not have a clear protocol on that issue and so the protocol was put into place to clarify what could be funded. Also in Tab 18, she stated that although INAC was aware of what Bands could use point- of?use systems they had not identi?ed speci?c Bands or pilot projects. The Evidence of Garry Best [the transcript of his Preliminary Hearing evidence is contained at'Tab 7 of Volume 2 of the Background Gan?y Best was the In?'astiucture Operations Director for INAC in the Operations Branch of the Regional Operations sector along with LB. His main role was to. oversee the implementation of the capital facilities maintenance program. The September 2010 Meeting GM asked him to attend the September 14, 2010 meeting with H20 at the INAC of?ces in Gatineau. He described the meeting as an ?ice breaking with H20 about the possible involvement with INAC in small water systems for Bands. He recalled BC being present and described that as being ?a bit odd? as he could not understand why he was there as the intent of the meeting was to showcase ?what the vendor was actually doing?. He thought the meeting was ?exploratory? and may have - been a ?one-off?. He asked some pointed questions about the technical aspects of systems as. he did not think that it was ?super-hot?. 29 Other Contact with H20 and BC Subsequent to the September meeting he was involved in approximately six other meetings as well as email exchanges and phone calls with H20. At one point H20 offered a funded tour of the factory in Regina to which he responded ?absolutely not? as it was ?inappropriate? and ?awkward? because INAC was not? oing to be purchasing?. He did not know what role was at that meeting because ?it seemed a bit like a fish out of the water?. Emails With respect to Tab 13 of Volume 3 of the TBOE, he testi?ed that by that time H20?s ?aggression was starting to intensify?. He stated that they had explained role to H20 in ?explicit detail? on more than one occasion notably that they do not purchase. He felt that ?it was inappropriate to continue along that path?. Views of H20 GB also testi?ed that H20 and others wanted to know ?where we should target? and GB felt that that information would not be provided as that was ?inappropriate as wel He stated that pointed them to infrastructure investment plan on their web site as well as the AFN. Responding to Gail Mitchell?s request for ideas, he testified that he felt that a pilot project may be possible but he was not ?really sold?package plan? that he would have invested in and ?certainly the costs were suspect?. A pilot project would involve ?a small investment to test it? and did not happen often. However, he did not feel that a ?one?o?? process was appropriate. The other option was a request for proposals as it was ?transparent public [and] accountable?. 30 GB testi?ed that his involvement with H20 ?evolved? from ?that odd ?rst encounter, then to a little bit more difficult, awlmard encounter, to a troubling encounter?. He had to explain to them ?many, many times? how funding worked, role, AFN ?s role and the relationship between the two organizations. He felt that ?even. the basics were ignored? by H20 even though he had indicated to them that ?this is not appropriate? especially with respect to procurement and investment. Furthermore, occasionally he was mis-quoted and misinterpreted and that his and his staff?s views were being taken out of context which undermined their role. He stated that he urged Gail Mitchell to be ?very careful? because he was feeling ?very uncomfortable? for the first time in his 30 years in government. As an example, he referred to the November 14, 2010 email in which BC stated that four reserves had been identi?ed for pilot projects by INAC when in fact that had not occurred. He felt that H20 was trying to ?gain an. advantage? over other vendors. He stated that vendors are generally directed to websites or to speak with Bands directly but in this situation it was ?completely di?erent and over the top?. He felt that despite INAC providing appropriate and professional responses it was being ?dragged? into a support role by H20 under the wrong assumption that INAC was ?condoning all of this?. Views of BC GB felt that BC was ?orchestrating things? and he was ?taken aback? by aggressive approach in trying to sell H20?s system. He also felt that BC was trying to include INAC as part of the approvals which he was concerned with because INAC had not provided credibility to that system. Ultimately, he felt that BC was clearly selling H20 Pros because it ?wasn ?t able to sell itself?. Jason A. i001 Assistant brown Attorney Crown At omey?s Of?ce - Ottawa Ministry of the Attorney General - Ontario Signed and dated at Ottawa, Ontario this 20th day of August, 2015. 31