Courtroom removes Lighthouse government director Don Windels after investigation into private loans

The investigation discovered the non-profit’s monetary preparations concerned “an overarching tradition of co-mingling private pursuits with the pursuits of the Lighthouse.”

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An investigation into the funds of a longtime Saskatoon non-profit has been made public after a publication ban was lifted on the courtroom case that started final summer time.

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A Saskatoon Courtroom of Queen’s Bench choose ordered an impartial investigation after board members raised considerations over The Lighthouse Supported Residing Inc. board approving private loans for its government director, Don Windels, his household and different board members way back to 2008.

Late final 12 months, a publication ban on reporting the small print of the case was put in place. After a number of media shops — together with the Saskatoon StarPhoenix — collectively utilized to have the ban lifted, Justice David Gerecke initially eliminated the ban in December. Windels filed an attraction of that call, throughout which era the publication ban remained in place. Following a months-long course of, the ban was unanimously lifted on Monday by the Saskatchewan Courtroom of Enchantment, permitting Saskatoon media shops to report the small print of the wrestle over the Lighthouse and its administration.

In July 2021, the three board members (the candidates) requested the courtroom to order the inspection of economic data for the Lighthouse and its affiliated company, Blue Mountain Journey Park, underneath provisions of The Non-Revenue Companies Act, 1995.

Justice Gerecke appointed MNP LLP to research — particularly a $60,000 “mortgage” to Windels and a $30,000 mortgage to a different board member.

The inspection report, accomplished in October, discovered that among the loans acquired board approval, whereas others didn’t. Some had been recorded in assembly minutes or disclosed in monetary statements, and others had been left off the books. Some had been repaid, with curiosity, whereas others stay excellent.

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In lots of circumstances, inspectors decided it was unclear if the loans had been disclosed as a “associated celebration transaction” in monetary statements, elevating crimson flags over conflicts of curiosity throughout the group.

A Saskatoon judge ordered an independent investigation after concerns were raised over the Lighthouse Supported Living Inc. board approving personal loans for its executive director, Don Windels, his family and other board members as far back as 2008.
A Saskatoon choose ordered an impartial investigation after considerations had been raised over the Lighthouse Supported Residing Inc. board approving private loans for its government director, Don Windels, his household and different board members way back to 2008. Picture by Matt Smith /Saskatoon StarPhoenix

The Lighthouse is supposed to serve the group, and Windels broken that mission by co-mingling his private pursuits with these of the Lighthouse, by failing to make sure transactions had been correctly recorded and by failing to make sure full and correct audit stories, Gerecke wrote in his Dec. 6 judgment.

In his affidavit, Windels apologized for failing to separate his private pursuits from these of the Lighthouse, and for any potential hurt it has completed to the group’s essential work, however insisted he didn’t use his place “to profit myself to the detriment of the Lighthouse or its subsidiary organizations or associated events.”

Gerecke ordered Windels faraway from his positions on the Lighthouse and Blue Mountain for 2 years in an effort to rebuild belief between the Lighthouse, its stakeholders and the group.

“It’s a cheap expectation {that a} director or officer is not going to have interaction in wrongful actions that, in the event that they had been to turn out to be public, would considerably tarnish the repute of the charitable group within the eyes of most people, potential donors, funders, licensors, and regulators,” Gerecke wrote.

“With a lot of its income depending on funders, authorities companies and donors, goodwill and belief are treasured commodities for the Lighthouse.”

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THE HISTORY

The Lighthouse is a non-profit group that gives housing and help for susceptible populations in Saskatoon and North Battleford. Windels, a chartered skilled accountant, has been its government director since 2003.

In April 2021, the board fashioned an audit and finance committee. The candidates had been on the committee, and began wanting into the group’s monetary state of affairs, courtroom paperwork present.

In her affidavit, vice-chair Twila Reddekopp mentioned Windels was typically non-responsive when she requested monetary paperwork. Primarily based on their considerations, board chair Jerome Hepfner and Reddekopp basically pressured Windels to take a medical depart on Could 18, 2021, escorting him from the premises and taking away his keys and laptop entry, Gerecke decided.

Reddekopp and Hepfner then appointed themselves as performing co-executive administrators. Neither that call, nor Windels’ pressured departure, was mentioned with or accredited by the board, courtroom paperwork present.

Different board members subsequently tried to name a “particular assembly” in June 2021 to take away the candidates from the board, which Windels returned to on June 1, 2021.

“There’s a energy wrestle on the board degree that has escalated into an all-out-war,” Gerecke wrote in his determination to order the monetary investigation.

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THE INVESTIGATION

Windels acquired a $60,000 “mortgage” from the Lighthouse to buy a house for his daughter in 2017. The inspection report discovered the Lighthouse really bought the property as safety on the “mortgage,” after which offered it to Windels for $81,671.

In his affidavit, Windels mentioned he couldn’t receive full financing for the acquisition and intensive renovations that had been mandatory. He mentioned he repaid the mortgage, utilities, property taxes, insurance coverage and all relevant curiosity.

Windels and one other board member, Pierre Trudel, say the mortgage was accredited by the board; the candidates say it was completed in personal, leaving no document of the assembly for brand new members to see.

The courtroom decided the mortgage did obtain board approval, nevertheless it was not disclosed till it appeared in a draft audited monetary assertion for Dec. 31, 2020.

“Mr. Windels is a CPA. That experience, alongside together with his twin function as a Board Member and Government Director, alongside together with his direct participation within the transactions, depart little question that Mr. Windels had the power to regulate how the acquisition of the (home) was entered within the Lighthouse’s monetary data,” Gerecke wrote.

The inspectors mentioned Windels ought to have disclosed that he was basically dwelling rent-free within the property as a tenant for 4 years.

“Successfully, each events invested within the property, however solely Mr. Windels benefitted from any appreciation whereas solely the Lighthouse bore any danger of possession,” the report states.

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In 2010, the Lighthouse loaned Trudel, a longtime board member and former president, $30,000 so his enterprise, Mech El Companies Ltd., may pursue a patent for photo voltaic kits.

The board accredited the mortgage, with 15 per cent curiosity, to be “repayable upon the sale of the patent developed utilizing the proceeds of the demand mortgage,” however the firm was unable to promote the patent.

The inspection discovered that no curiosity has been paid on the mortgage, which continues to be excellent 10 years later after a number of extensions had been granted.

The Mech-El mortgage was solely recognized as a “associated celebration transaction” 9 years later, in 2019, in line with the inspection report.

No clarification was supplied for this omission, for why Trudel thought it was applicable to take the mortgage or for why he didn’t recuse himself from the newest determination to additional prolong the mortgage in 2020, Gerecke wrote in his determination to order the inspection.

He mentioned the loans to Windels and Trudel ought to by no means have occurred.

“The Lighthouse will not be within the enterprise of being a lender. If authorized recommendation had been obtained at both time, as ought to have occurred, it undoubtedly would have been that the Lighthouse shouldn’t make these loans.”

A Saskatoon court ordered an independent investigation after concerns were raised over the Lighthouse Supported Living Inc. board approving personal loans for its executive director, Don Windels, his family and other board members as far back as 2008.
A Saskatoon courtroom ordered an impartial investigation after considerations had been raised over the Lighthouse Supported Residing Inc. board approving private loans for its government director, Don Windels, his household and different board members way back to 2008. Picture by Matt Smith /Saskatoon StarPhoenix

The courtroom additionally requested the inspector to look into Kowach Basis for Advancing Schooling Inc., a non-profit group that Windels runs.

Based on courtroom paperwork, its sole function is to use for grants to rent summer time college students for Blue Mountain — an outside retreat close to North Battleford that the Lighthouse owns. Windels mentioned the board is conscious of the organizations’ relationship, and that he “acquired no monetary profit” from that relationship.

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The Blue Mountain board — comprised of Lighthouse board members — agreed to cowl the prices of hiring college students in 2018 and 2019, in line with the inspection report.

Investigators checked out Kowach’s accounting data ending March 31, 2021 “to evaluate whether or not Kowach was inappropriately profiting underneath the association with the Lighthouse.” They discovered as of that date, “Kowach has acquired a surplus of greater than $39,000 on account of its dealings with Blue Mountain.”

In his affidavit, Windels alleged that the report was incomplete and raised questions that he and the Lighthouse may reply by paperwork that might “totally deal with any considerations of impropriety on my half on account of transactions involving the Lighthouse, or any associated events, and myself.”

THE PUBLICATION BAN

Beneath The Non-Revenue Companies Act, a publication ban is routinely ordered when an utility is made with out discover.

Media organizations — together with the Saskatoon StarPhoenix — had been finally made conscious of the matter and a number of other collectively utilized to carry the ban.

Based on courtroom paperwork, each Windels and his opposing celebration argued for the ban to proceed as a result of making the investigation public would harm the Lighthouse’s Christmas fundraising marketing campaign and skill to serve the group.

“It’s not the lifting of the publication ban that may create that danger. What creates that danger is the conduct of Don Windels and others within the group, together with members of the Board of Administrators on the related instances, who enabled and accredited his conduct,” Gerecke wrote in his determination to carry the ban.

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“There isn’t any foundation to argue that, as soon as in litigation, a charitable group that has allowed funds raised by it for use in methods inconsistent with its charitable objects ought to be capable of hold {that a} secret (overcoming the open courtroom precept) merely to permit it to fundraise extra efficiently.”

Windels additionally argued that the inspector’s report is incomplete, inaccurate and deceptive, and if the inspector uncovers new data “sustaining the publication ban eliminates the danger that the inspector could be hesitant to alter these views within the public eye.”

“Because the Media argues, given the sources of funding and function of the Lighthouse, the general public curiosity in open and accessible courtroom proceedings is especially and justifiably excessive on this case,” Gerecke concluded.

On Monday, the Saskatchewan Courtroom of Enchantment unanimously dismissed Windels’ attraction, saying there should be substantial proof of a big danger to an vital public curiosity to justify any restriction on courtroom openness.

Windels could search depart to attraction to the Supreme Courtroom of Canada and apply for a keep of the choice within the interim.

THE CONCLUSION

Along with eradicating Windels, Gerecke additionally ordered that he and his relations can’t be voting members of the Lighthouse for 2 years.

He dominated that the candidates will stay on the board, though different board members allege their conduct in eradicating Windels was simply as egregious as Windels’ conduct.

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“It’s not shut. It’s Mr. Windels who repeatedly conferred advantages on himself. He’s the one who could have induced the extreme tarnishing of the Lighthouse’s repute,” Gerecke wrote, including different board members who agreed to approve the loans did so “wrongly.”

Gerecke adjourned the matter to Dec. 13, 2021 to listen to submissions concerning any additional courtroom orders. Within the interim, he ordered an instantaneous seek for a brand new government director, recommending new board members be on the search committee, in addition to non-board members who characterize Lighthouse stakeholders.

Weeks after his ruling, in January 2022, the Lighthouse board seized management of its administration, changing the chief director with two board members because the group grappled with staffing shortages, safety points and a looming deadline to repair harm to its constructing.

The administrators appointed Hepfner and Reddekopp as interim managing administrators, in line with a letter circulated to administration. Based on the letter, signed by Hepfner, government director Don Windels was on depart. There was no cause given within the letter for his absence, nor a date he’s anticipated to return.

As a result of publication ban that was in place on the time, the allegations made towards Windels couldn’t be made public.

In his ruling final 12 months, Gerecke additionally amended the non-profit’s bylaw, stopping administrators from serving greater than 10 consecutive years and eliminating the twin function of an government director additionally being a board member.

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“In no less than a few of his actions, going again a few years, Don Windels overlooked what actually issues — that the Lighthouse be capable of sustainably serve the wants of the distressed, susceptible, mentally in poor health, these affected by substance abuse, the homeless and destitute folks of our communities on a 24 hours a day/7 days per week 12 months in and 12 months out foundation,” Gerecke wrote.

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