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HomeBusinessLawsuit sheds light on turmoil in First Nations Health Authority

Lawsuit sheds light on turmoil in First Nations Health Authority


Bob Mackin

An indigenous leader claims he was dumped as chair of the First Nations Health Authority after accusing the chief executive officer of conflict of interest.

Grand Chief Doug Kelly (FNHA)

Grand Chief Doug Kelly, president of the Sto:lo Tribal Council, filed a B.C. Supreme Court lawsuit against the authority on Dec. 6, claiming he is owed more than $380,000 for breach of contract.

The 59-year-old alleged he had 25 months left as the $183,000-a-year chair of the West Vancouver-based authority. The authority is responsible for programs that were formerly delivered to 200 B.C. First Nations communities by Health Canada. The federal government committed $4.7 billion from 2013 to 2022 and the B.C. government agreed to chip-in $83.5 million. 

Kelly’s lawsuit said CEO Joe Gallagher recommended in 2017 that the board create a new position of vice-president of policy, planning and quality to report directly to him. He also recommended that his ex-wife, Harmony Johnson, fill the role on an acting basis. Kelly claimed that Gallagher did not follow policy because he failed to formally disclose his interest in Johnson’s appointment.

In meetings and emails last April, Kelly raised concerns with Gallagher and others in the authority about Johnson’s hiring. In May, Kelly made a presentation to the board on good governance issues, including implications of a 2016 report by the Auditor General of Canada and Gallagher’s apparent conflict of interest.

Joe Gallagher (BC Pharmacy)

“The report pointed to gaps and inadequacies in the authority’s conflict of interest policy, and found that the authority did not fully comply with its policies on investigating misconduct and on staffing positions on the basis of merit,” Kelly’s lawsuit said.

The council met to discuss the issue in mid-June and struck a working group of five members, including Kelly and deputy chair Allan Louis. Later that month, the board directed Gallagher to fire Johnson. But, according to Kelly’s statement of claim, Gallagher refused to comply.

On June 28, the board advised the authority members by email that it acted on legal advice to rescind the resolution directing Gallagher to fire Johnson. The council met July 11 and, without notice, voted to remove Kelly and Louis as chair and deputy chair.

The statement of claim said Kelly’s $15,250-a-month contract was part written, part oral and part by conduct. His most-recent three-year term as chair began in October 2018. A fourth year was contingent upon his reappointment to the Sto:lo Tribal Council, which he achieved in March.

“Grand Chief Kelly reasonably expected his appointment as chair, and thus his contract with the authority, to last the entire term, and relied on that expectation to plan his affairs,” said the lawsuit.

Gallagher was dismissed as CEO on Oct. 9, but Johnson remains in her acting vice-president role. Chief operations officer Richard Jock took over as acting CEO.

None of the allegations has been tested in court. The authority has yet to file a defence statement.

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