Former councillors feel 'vindication' after Norman Wells audit, manager sued

Two former councillors in Norman Wells, N.W.T., are saying the government failed to help them get rid of former town officials who have now been accused of fraud.

They spoke to CBC after a public meeting on Wednesday was held to discuss the results of a forensic audit ordered by the town's current mayor and council, focusing on the former town manager's pay and expenses.

Mayor Frank Pope announced Wednesday that the audit results suggest that former manager Catherine Mallon made inappropriate purchases and was paid excessive overtime.

The audit, Pope said, has given the town enough material to sue Mallon — alleging she fraudulently took $1.25 million from the town — as well as Nathan Watson, who served as mayor from 2015 to 2017, for letting it happen.

The Town of Norman Wells filed a statement of claim with the Supreme Court of the Northwest Territories on May 3, according to the town's lawyer. RCMP are also aware of the situation, but no charges have been laid. The allegations have not been tested in court.

Former councillor Lise Dolen says councillors approached the territorial government with concerns about Mallon and Watson in 2016.

Soon after, the government dissolved the town council, while Mallon's contract continued. For Dolen, the results of the audit are "vindication."

"We ... asked for guidance and basically ... we got fired," Dolen said. "[Mallon] stayed on. I'm really upset about that. I'm really — I'm pissed off."

Dolen, other councillors, and the mayor were all let go when the territorial government put the town under administration in 2017, saying the council was unable to effectively govern. A territorial inspection of the town government that year found "real or perceived conflicts of interest" from councillors, "operational difficulties" and a failure from the council and mayor to follow the town's procedures.

The full inspection was not released to the public.

At that time, the town also faced other problems, including a lawsuit brought by a former worker alleging a "toxic work environment." Several staff members also lost their jobs, including Dolen's son.

Tim Melnyk, a former councillor who ran for mayor in 2018, declined an interview but noted over text message that he and the other councillors "tried to fire [Mallon] twice and that failure to finish that process haunts me to this day."

Melnyk believes that if Mallon had been removed earlier, the town's staff members might not have had those problems.

"Am I glad that Catherine and Nathan are getting sued[?] A little, but it doesn't erase time," he wrote. "I failed the employees of the town and I failed the people of Norman Wells."

Hands tied

Eleanor Young, deputy minister of the N.W.T. Department of Municipal and Community Affairs (MACA), says that territorial laws and policies allow it to dissolve council, but don't give it the power to hire or fire town employees — that is up to local governments. This put the department in a quagmire when they dissolved council.

"We did what we believed we have the authority to do," Young said, adding that in her view, the territory had cause to remove the council, pointing to the 2017 inspection.

The town's territorially-appointed administrator, Allen Stanzell, did analyze Mallon's performance and job duties.

Young said Stanzell had the authority to fire Mallon, but after the performance review, it was decided he could work with her until the end of her contract.

Young told CBC she did not see the review. Stanzell declined to comment saying that the matter is before the courts.

Mallon's successor subsequently found a tax form that suggested she was getting paid an unusually high amount, which led to the audit.

Young also alleges that after councillors and the mayor were fired — while the town was under administration — Mallon "probably" continued to make potentially inappropriate purchases and take unusual amounts of pay.

Young added that perhaps policies or laws should change so that MACA can have more tools if a town manager is suspected of causing problems for a community.

Watson has denied the allegations, and said on Wednesday that he had not been served with a lawsuit. If he is, he said he will get a lawyer. Mallon could not be reached for comment.

The case will be before the N.W.T. Supreme Court on Friday. A lawyer for the town says it's seeking an order to serve Watson via email, "because the town does not know where Mr. Watson is."